Mar 262017
 
 March 26, 2017  Posted by at 8:56 am Finance Tagged with: , , , , , , , , , ,  2 Responses »
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Marion Post Wolcott “Center of town. Woodstock, Vermont. Snowy night” 1940

 


Will Trump’s Victory Break Up the Democratic Party? (Michael Hudson)
Condo Flippers in Miami-Dade Face The End Of A Bubble (WS)
What Global Central Bank Normalization Would Look Like (ZH)
Populism: The Phenomenon (Dalio et al)
The Peak Of – Dirty – Cash? (ZH)
Explaining Why White Middle Aged America Is Killing Itself (Worstall)
Brexit Vote Is ‘Closed Nationalism’ That Belongs In Past, Says Italian PM (G.)
Drink and Women – It’s A Culture Thang (DA)
Portugal’s Cabral Says Dijsselbloem Resignation Is Best for EU (BBG)
Trump Marks Greek Independence Day With Ominous Message (AP)
Syrian Asylum Seekers In UK Forced Into Poverty, Fear Deportation (G.)
Ogallala: What Happens to the US Midwest When the Water’s Gone? (NatGeo)

 

 

Long analysis by Hudson. Trump as Obama’s legacy. And ousting Bernie has left America without a Democratic party, like some self-fulfilling prophecy. (Graph is from another source, but a very good fit)

Will Trump’s Victory Break Up the Democratic Party? (Michael Hudson)

Trump is sufficiently intuitive to proclaim the euro a disaster, and he recommends that Greece leave it. He supports the rising nationalist parties in Britain, France, Italy, Greece and the Netherlands, all of which urge withdrawal from the eurozone – and reconciliation with Russia instead of sanctions. In place of the ill-fated TPP and TTIP, Trump advocates country-by-country trade deals favoring the United States. Toward this end, his designated ambassador to the European Union, Ted Malloch, urges the EU’s breakup. The EU is refusing to accept him as ambassador. At the time this volume is going to press, there is no way of knowing how successful these international reversals will be. What is more clear is what Trump’s political impact will have at home. His victory – or more accurately, Hillary’s resounding loss and the way she lost – has encouraged enormous pressure for a realignment of both parties.

Regardless of what President Trump may achieve vis-à-vis Europe, his actions as celebrity chaos agent may break up U.S. politics across the political spectrum. The Democratic Party has lost its ability to pose as the party of labor and the middle class. Firmly controlled by Wall Street and California billionaires, the Democratic National Committee (DNC) strategy of identity politics encourages any identity except that of wage earners. The candidates backed by the Donor Class have been Blue Dogs pledged to promote Wall Street and neocons urging a New Cold War with Russia. They preferred to lose with Hillary than to win behind Bernie Sanders. So Trump’s electoral victory is their legacy as well as Obama’s. Instead of Trump’s victory dispelling that strategy, the Democrats are doubling down. It is as if identity politics is all they have.

Trying to ride on Barack Obama’s coattails didn’t work. Promising “hope and change,” he won by posing as a transformational president, leading the Democrats to control of the White House, Senate and Congress in 2008. Swept into office by a national reaction against the George Bush’s Oil War in Iraq and the junk-mortgage crisis that left the economy debt-ridden, they had free rein to pass whatever new laws they chose – even a Public Option in health care if they had wanted, or make Wall Street banks absorb the losses from their bad and often fraudulent loans. But it turned out that Obama’s role was to prevent the changes that voters hoped to see, and indeed that the economy needed to recover: financial reform, debt writedowns to bring junk mortgages in line with fair market prices, and throwing crooked bankers in jail.

Obama rescued the banks, not the economy, and turned over the Justice Department and regulatory agencies to his Wall Street campaign contributors. He did not even pull back from war in the Near East, but extended it to Libya and Syria, blundering into the Ukrainian coup as well. Having dashed the hopes of his followers, Obama then praised his chosen successor Hillary Clinton as his “Third Term.” Enjoying this kiss of death, Hillary promised to keep up Obama’s policies. The straw that pushed voters over the edge was when she asked voters, “Aren’t you better off today than you were eight years ago?” Who were they going to believe: their eyes, or Hillary? National income statistics showed that only the top 5% of the population were better off. All the growth in GDP during Obama’s tenure went to them – the Donor Class that had gained control of the Democratic Party leadership. Real incomes have fallen for the remaining 95%.

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Rates still no low enough?

Condo Flippers in Miami-Dade Face The End Of A Bubble (WS)

Miami-Dade’s spectacular condo flipping mania is in turmoil, with sales plunging, inventory-for-sale soaring, and new supply flooding the market. It’s not like Miami hasn’t been through this before. In February, existing home sales of all types fell 10% year-over-year, to 1,835 homes. These sales “do not include Miami’s multi-billion dollar new construction condo market,” the Miami Association of Realtors clarified in its report on March 23. And this new construction market that is not included has become distressed. Sales of single-family homes fell 10% in February, to 881 houses. The report blamed the shortage of properties “in popular price points.” Prices have been rising sharply, and at the price points where people could actually buy a house – below $250,000 – few sellers were playing ball.

Hence a stalling market. Sales of high-priced units rose, but they weren’t enough to pull out the totals. Condo sales fell 10% as well, to 954 units. This time, the report didn’t blame the lack of supply. Instead: “Existing condo sales are competing with a robust new construction market.” At the same time, inventory of existing condos for sale, not including new units, rose 10% to 15,289. At the current sales rate, supply soared 29% to 14 months. This chart by StatFunding shows the plunge in sales and the surge in condos listed for sale. I circled the last five Februaries on the sales line (red). From February 2014 to February 2017, condo sales have plunged 25%. Andrew Stearns, StatFunding’s founder and CEO, calls the resale inventory – the dark green line that has soared 90% since early 2013 – “scary”:

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When ‘normalization’ becomes the scariest idea around.

What Global Central Bank Normalization Would Look Like (ZH)

As a result of countless failures by central banks to normalize monetary policy over the past 7 years, the market – especially bonds and rates – has become openly cynical and outright skeptical regarding the possibility of a successful renormalization of policy by global central banks. After all, Japan has been trying to do that for over 30 years and has yet to succeed; the ECB hiked in 2011 resulting in near collapse of the Eurozone. Ironically, the recent Trumpflation trade – which few expected as a result of the “shocking” Trump election victory – has emerged as the most credible catalyst to prompt inflation not only in the US but around the globe, resulting in two Fed rate hikes in rapid succession.

Still, now that Obamacare repeal has failed, and questions are rising whether Trump will be able to implement his proposed Tax reform, the market has aggressively faded not only the broader Trumpflation trade, but also all of the recent dollar strength since the US election: in short, bets on a “bening” global reflation are rapidly fading, suggesting that the latest push to normalize monetary policy will once again result in failure. And yet, “what if it goes according to plan” this time? That’s the question posed by Barclays’ Christian Keller who notes that, at least for the time being, “The synchronized upswing in the global economy continues, supporting sentiment, which thus far has ignored elevated policy uncertainties. Headline inflation is increasing due to stable oil prices, while core inflation rates are mixed.”

And, assuming nothing changes, this sets the backdrop for monetary policy normalization, albeit at different speeds and modes. Taking this thought experiment one step further, what would happen if indeed this time central banks are successful to renormalize monetary policy without leading to a market crash. In that case, Barclays expects three Fed hikes in 2017 and 2018, respectively. The ECB is likely to taper further in 2018 and to start increasing depo rates in parallel (in 2018). Conveniently, Barclays has created the following chart which lays out what “coordinated global renormalization” would look like. It can serve as a benchmark to those keeping tabs on where various central banks are in the current attempt to restore monetary normalcy.

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Franklin D. Roosevelt, populist.

Populism: The Phenomenon (Dalio et al)

Populism is a political and social phenomenon that arises from the common man, typically not well- educated, being fed up with 1) wealth and opportunity gaps, 2) perceived cultural threats from those with different values in the country and from outsiders, 3) the “establishment elites” in positions of power, and 4) government not working effectively for them. These sentiments lead that constituency to put strong leaders in power. Populist leaders are typically confrontational rather than collaborative and exclusive rather than inclusive. As a result, conflicts typically occur between opposing factions (usually the economic and socially left versus the right), both within the country and between countries. These conflicts typically become progressively more forceful in self- reinforcing ways.

Within countries, conflicts often lead to disorder (e.g., strikes and protests) that prompt stronger reactions and the growing pressure to more forcefully regain order by suppressing the other side. Influencing and, in some cases, controlling the media typically becomes an important aspect of engaging in the conflicts. In some cases, these conflicts have led to civil wars. Such conflicts have led a number of democracies to become dictatorships to bring order to the disorder that results from these conflicts. Between countries, conflicts typically occur because populist leaders’ natures are more confrontational than cooperative and because conflicts with other countries help to unify support for the leadership within their countries.

In other words, populism is a rebellion of the common man against the elites and, to some extent, against the system. The rebellion and the conflict that comes with it occur in varying degrees. Sometimes the system bends with it and sometimes the system breaks. Whether it bends or breaks in response to this rebellion and conflict depends on how flexible and well established the system is. It also seems to depend on how reasonable and respectful of the system the populists who gain power are.

[..] In the period between the two great wars (i.e., the 1920s-30s), most major countries were swept away by populism, and it drove world history more than any other force. The previously mentioned sentiments by the common man put into power populist leaders in all major countries except the United States and the UK (though we’d consider Franklin D. Roosevelt to be a quasi-populist, for reasons described below). Disorder and conflict between the left and the right (e.g., strikes that shut down operations, policies meant to undermine the opposition and the press, etc.) prompted democracies in Italy, Germany, Spain, and Japan to choose dictatorships because collective/inclusive decision making was perceived as tolerance for behaviors that undermined order, so autocratic leaders were given dictatorial powers to gain control.

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The differences are huge. In lots of countries going cashless is not going to fly.

The Peak Of – Dirty – Cash? (ZH)

In several major economies it’s crunch time for the future of cash. Goldman Sachs notes that this is largely policy-driven: tangible steps are being taken to wean economies off cash (e.g. India, Europe); but adds that, at the same time consumer expectations around convenience are rising and enabling technologies have proliferated in the shape of contactless cards, mobile wallets, cryptocurrencies and more. So, they ask, does the decline in cash payments imply the demise of cash? Not necessarily. Technology has been an important catalyst for shrinking cash usage, but it is by no means a new phenomenon. As we wrote in 2012, the first technological step-change in the payments arena was the shift from cash to plastic money, i.e. credit and debit cards, which happened in the 1960s.

There are many parallels to be drawn between that period and the ongoing shift to digital money: an initial period of an increasing number of providers was followed by a consolidation stage that established a few players (Visa and MasterCard primarily) as the industry standards, eventually accelerating the adoption of plastic money. However, the availability of technology alone has not ensured the demise of cash. As the following chart shows, there are several advanced economies in which it is still the dominant mode of payment in volume terms (surprisingly quite a few European countries are in the bottom left quadrant).

Japan is a striking example of this; lots of tech and lots of cash. The US also stands out, and this could at least partly be attributed to the fact that regulators in the US have explicitly stated that the market should manage the shift to digital payments by itself. On the other hand, Scandinavian countries are on the cusp of becoming some of the first cashless societies, as a result of industry-co-ordinated steps and government initiatives. Swish, a payment app developed jointly by the major Swedish banks, has been adopted by nearly half the Swedish population, and is now used to make over nine million payments a month. About 900 of Sweden’s 1,600 bank branches no longer keep cash on hand or take cash deposits and many, especially in rural areas, no longer have ATMs.

In conjunction with that, cash transactions were just c.2% of the value and 20% of the volume of all payments made last year (down from 40% five years ago). Denmark’s move to a cashless society is a deliberate result of policy, with the government removing the obligation for some retailers to accept payment in cash. Without this legislative push, we believe cash is very difficult to disrupt and substitute. After all, it is a free and convenient mode of transacting. So far, the selling point of the most broadly used alternatives to cash (cheques and cards) is greater convenience. But that hasn’t been sufficient to meaningfully reduce the market share of cash in countries outside Scandinavia and Canada.

Read more …

Plenty of theories.

Explaining Why White Middle Aged America Is Killing Itself (Worstall)

Back 18 months the team of Anne Case and Angus Deaton (who has since gained the economics Nobel) released a famous paper pointing out that white rural Americans were killing themselves. So much so that expected lifespans were in fact falling such was the rise in middle aged morbidity. That original paper found that the effect was geographically concentrated. And as I remarked at the time that’s a bit of a problem for the causality of that rise in morbidity. For we’ve got rather a lot of migration out of those rural areas. And it’s the better educated doing the leaving. Thus it is possible (no, no one has studied this in enough detail as yet for anyone to know) that the effect found is entirely down to those migration effects.

We know very well that poorer and less educated people are more likely to die in middle age than richer and better educated. So, if all the better educated and thus, in our current society, higher income people move away we will observe a rise in the death rate among the remnant population. Case and Deaton have returned to this subject with a new paper. And they agree that there is some of this compositional effect in their earlier findings: “It is important not to focus on those with less than a high school degree, a group that has grown markedly smaller over time, and is likely to be increasingly negatively selected on health.” And: “.. we note that for age-groups younger than 45, there has been a decline in the fraction of WNHs with only a high school degree, so that selection may be playing some role for the younger groups.”

Excellent, so that intuition of mine about those compositional effects was indeed correct at least in part. However, this new paper then drives a steamroller through my explanation by showing that this rise in morbidity is country-wide among that class and age group, middle aged and less educated whites. Except, well, I’m not quite sure it does. Fortunately, as I said last time, this is such an important result coming from such a well known name that it will be fully investigated. It’s not just going to be either ignored nor accepted at face value either. People will keep picking away at this until the definitive answer is understood.

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Yeah, the idea behind the EU was good. The execution has been terrible though. Celebrate while holding your breath.

Brexit Vote Is ‘Closed Nationalism’ That Belongs In Past, Says Italian PM (G.)

Britain’s decision to leave the EU has been described by the Italian prime minister as “closed nationalism” that belongs in the past during a summit in Rome to celebrate the bloc’s 60th anniversary. In an address at the Orazi and Curiazi Hall of the Capitol in the Piazza del Campidoglio, where the EU was founded six decades ago, Paolo Gentiloni expressed his discomfort with the motives behind the referendum result. He blamed the EU for not responding adequately to the economic crisis of 2008, but said: “That triggered in part of public opinion, unfortunately the majority of public opinion in the United Kingdom, it triggered a crisis of rejection. It brought forward the closed nationalism that we thought has been closed down in the archives.”

The leaders of the 27 member states that will make up the EU after the UK’s departure assembled on Saturday to mark the day on which six nations signed what was to become the Treaty of Rome. They signed a Rome declaration, which offered ringing phrases about peace and unity, and the importance of maintaining the union. “We, the leaders of 27 member states and of EU institutions, take pride in the achievements of the European Union: the construction of European unity is a bold, far-sighted endeavour,” it says. “Sixty years ago, recovering from the tragedy of two world wars, we decided to bond together and rebuild our continent from its ashes.

“We have built a unique union with common institutions and strong values, a community of peace, freedom, democracy, human rights and the rule of law, a major economic power with unparalleled levels of social protection and welfare. “European unity started as the dream of a few, it became the hope of the many. Then Europe became one again. Today, we are united and stronger: hundreds of millions of people across Europe benefit from living in an enlarged union that has overcome the old divides.” The document stipulates that the EU will make progress on a social dimension, building on its citizens’ rights, and that some member states will enhance their cooperation, particularly in the field of defence. The text concludes: “We have united for the better. Europe is our common future.”

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Grains vs grapes. Why Southern Europeans are not big drinkers.

Drink and Women – It’s A Culture Thang (DA)

When it comes to consumables, though, blowing it on drink is not such a southern European thing. On old professor of mine, an expert in the history of booze (among other substances) often observed that Europe is divided into north and south by distinct cultures of intoxication rooted in our prehistory – the grape in the south, the grain in the north, originally the function of geography and climate which in turn determined access to different sources of plant sugar.

It is the grain-fermenting northerners who have traditionally drunk themselves to oblivion, and it is them that felt the teetotal backlash of the protestant reformation, whereas the Mediterranean world used their fermented grape juice more sparingly and even made it “taboo” by ghoulishly turning it into blood in the Christian sacrament. It is said that you can still observe this divide by walking down the main street of any Mediterranean town hosting a Club 18-30 resort in high tourist season. Some might say, therefore, that Jeroen is merely projecting his own cultural inclinations. They don’t call it Dutch courage for nothing.

No, when it comes to consumables, another famous one-line aetiology of the Greek crisis comes to mind: “We ate it together” (”Mazí ta fágame”), is what PASOK grandee Theodoros Pangalos poffered in 2010 in response to the question “where did the money go?”. A succinct description of the workings of clientelism, delivered by a true master of the art. The saying survives and thrives, in large part because it had a grotesque, evocative appeal in light of the speaker’s own well-fed physique, an apparent embodiment of gluttony openly admitting to the sin and beckoning us to join him at the trough. In the popular imagination it conjured up images of the Greek political class, bloated with greed both physical and metaphorical, sharing a well-furnished table with their clients, the ordinary voters.

And although we, too, like to accuse our elites of eating Marie Antoinette’s cake and caviar (or perhaps the Greek pre-crisis equivalent, lobster spaghetti), the most appropriate fare loading down the table would be a cholesterol feast, most likely at Baïraktaris, the legendary Athens kebab house and political hangout. Not the starched white tablecloths of Washington’s Palm Grill, London’s private clubs, or the Michelin-starred chateaux of Gallic political intrigue, but oilcloth and stacks of paper napkins, the great equaliser, where we do indeed tuck in together in large, boisterous groups. You may recall Baïraktaris as the scene of another famous apophthegm, by another regular, former Prime Minister Costas Karamanlis, to the effect that “five pimps run this country”. And that is as far as I will go with the “women” element.

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Bartender, stop serving this man.

Portugal’s Cabral Says Dijsselbloem Resignation Is Best for EU (BBG)

Portugal’s Economy Minister Manuel Caldeira Cabral said Jeroen Dijsselbloem, whose Dutch party lost elections this month, should quit as chairman of the European finance ministers’ group after his comments about the duties of nations getting aid were deemed offensive. “It would be the best thing for Europe and the best thing he could do,” Cabral said in a Bloomberg Television interview from the Boao Forum for Asia, an annual conference on the southern Chinese island of Hainan. “He just lost an election and I think he should not be trying to blame others for his own failures.” Dijsselbloem is under pressure to resign as leader of the euro area’s finance ministers after a German newspaper cited him saying, “I can’t spend all my money on women and drink and then at the end ask for your help.”

That remark inflamed tensions between stronger economies in the north and weaker nations including Greece, Ireland and Portugal. The Eurogroup chief has said he regrets causing offense, but doesn’t intend to resign. “I don’t think we can let the Eurogroup be divided in that way, and for that reason that person should be out,” Cabral said. “One of the worst things that some European responsibles have done in the past is not being leaders and trying to surpass their own difficulties at home by accusing other countries. This is a way of destroying Europe.”

On the U.K.’s withdrawal from the European Union, Cabral said the bloc must focus on getting good results from negotiations in the next two to five years and then moving on to other issues. He said broader trade pacts should be the goal rather than making Brexit the only thing on the agenda for Europe and the U.K. The EU should focus on trade talks that give serious results and make a priority “of opening to the world, of negotiating with Asia, of being part of this intuitive of One Belt-One Road with China and establishing links with Asia,” he said in the interview.

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Large military parade yesterday in Athens. Fighter jets flying so low car alarms were going off all the time.

Trump Marks Greek Independence Day With Ominous Message (AP)

President Donald Trump has marked Greek Independence Day with a rather ominous message. At a White House reception, Trump said that in the years to come “we don’t know what will be required to defend our freedom.” But he said it will take “great courage, and we will show it.” Greek Independence Day commemorates the start of the 1821 war that led to Greece’s independence after nearly 400 years as part of the Ottoman Empire. It’s celebrated annually on March 25. Trump told the crowd, “I love the Greeks.” He also introduced Greek-American members of the White House staff, including chief of staff Reince Priebus. Trump said Priebus is “really terrific and hard-working,” along with being “one of the top Greeks in the country.”

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“..they were often too scared to pick up their allowance for fear of being detained.”

Syrian Asylum Seekers In UK Forced Into Poverty, Fear Deportation (G.)

Hundreds of Syrian asylum seekers are struggling to survive in the UK, with some facing destitution and others forced into exploitative work because they are afraid of being detained and deported. The Observer has found Syrian asylum seekers working in warehouses, construction sites and garages for as little as £10 a day. Many had stopped signing in with the Home Office after being held in detention centres for months. Hundreds more are living in destitution, reliant on charities for food parcels and clothes. Mike Adamson, chief executive of the British Red Cross, said: “A two-tier system, where Syrian nationals who arrive in the UK as asylum seekers are left vulnerable to exploitation, seems completely at odds with the spirit behind the government’s commitment to offer a safe home to 20,000 Syrian refugees under its resettlement programme.

The Observer interviewed 10 Syrians, all living in limbo because of the Dublin regulation, which means asylum seekers can be sent back to the first EU country they reach. The men were fighting removal to countries including Bulgaria, where Human Rights Watch found asylum seekers being shot at, beaten with weapons by uniformed officials and sent back to Turkey. Several of the men we spoke to were being threatened with removal to Hungary, despite the fact that the Home Office told the Observer that it is not currently returning asylum seekers there. At least 50 Syrians have been removed under the regulation since the start of 2015, prompting some to drop off the radar. Eight of the men interviewed said that they had stopped signing in with immigration authorities because they were afraid of detention and removal. Most had family in the UK and were supporting themselves by working illegally.

[..] The Red Cross said it had seen 1,341 destitute Syrian asylum seekers in Britain last year, up from 1,159 the year before. In South Yorkshire, a quarter of all destitute asylum seekers seen, of all nationalities, said they experienced hunger every day. In nearly half of all the cases seen by the Red Cross, asylum seekers were facing destitution, despite receiving the full £36 a week afforded to them under government rules. The Syrians the Observer interviewed said they were often too scared to pick up their allowance for fear of being detained.

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Return to the desert. It’ll take centuries to refill the aquifer.

Ogallala: What Happens to the US Midwest When the Water’s Gone? (NatGeo)

For the past 60 years, the Ogallala has been pumped out faster than raindrops and snowmelt can seep back into the ground to replenish it, thanks largely to irrigation machinery like the one sleeping nearby. As a result, in parts of western Kansas, the aquifer has declined by more than 60% during that period. In some parts, it is already exhausted. The decline is steady now, dry years or wet. In 2015 rain was exceptionally heavy—50 to 100% above normal. Even so, water levels in the wells dropped again. Wilson’s field report will put the best face on it, noting it was the slowest decline in five years.

Tagging along with Wilson, I am nearing the end of a 5,000-mile journey along the back roads of Ogallala territory, from South Dakota to Texas. My drive has taken me through some of the most productive farmland anywhere, home to at least a $20-billion-a-year industry that grows nearly one-fifth of the United States’ wheat, corn, and beef cattle. It’s also a place facing hard choices: Farmers can reduce consumption of water to further extend the life of the aquifer. Or they can continue on their path toward an end that is already in sight. Some don’t like to frame the dilemma quite so starkly. But if they don’t reduce pumping and the aquifer is drained, food markets will be profoundly affected around the world. In the coming decades this slow-speed crisis will unfold just as the world needs to increase food production by 60%, according to the United Nations, to feed more than nine billion people by mid-century.

The draining of North America’s largest aquifer is playing out in similar ways across the world, as large groundwater basins in Asia, Africa, and the Middle East decline rapidly. Many of these aquifers, including the southern Ogallala, have little ability to recharge. Once their water is gone, they could take thousands of years to refill. “The consequences will be huge,” says Jay Famiglietti, senior water scientist at NASA Jet Propulsion Laboratory and lead researcher on a study using satellites to record changes in the world’s 37 largest aquifers. “We need to sustain groundwater to sustain food production, and we’re not doing it. Is draining the Ogallala the smartest thing for food production in the U.S. and globally? This is the question we need to answer.”

Read more …

Mar 082017
 
 March 8, 2017  Posted by at 7:04 pm Finance Tagged with: , , , , , , , , , ,  20 Responses »
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Pablo Picasso Girl Before A Mirror 1932

 

Obviously, like hopefully many people, I’ve been following the WikiLeaks CIA revelations, and closely. It’s too early for too many conclusions, if only because WikiLeaks has announced much more will flow from that same pipeline. But one thing is already clear: the CIA is -still- a club that sees enemies behind every tree, and behind every TV set too. Which is not as obvious a world view as it may seem; it’s just something we’ve become used to.

Moreover, as we see time and again, organizations like the CIA and NATO have no qualms about ‘creating’ enemies if they are in short supply. The flavor du jour has now been, for years, Russia, but don’t be surprised if another one is cultivated alongside it. ISIS, China, North Korea, plenty of options, and plenty of media more than willing to aid the cultivation process. It’s a well-oiled machine geared towards making something out of nothing, a machine very adept at making you believe anything it wants you to.

In this way, our friends can become our enemies, and our enemies our friends. What gets lost in translation is that this way in reality we become our own worst enemies. While the upper and most secretive layers of society, filled with folk of questionable psychological constitution -sociopaths and psychopaths-, get to chase their dreams of wealth and power, those who try to live normal decent lives are, for that very purpose, increasingly subjected to poverty, misery and fear. As our economies decline further, this will only get worse.

 

Who needs your -conscious- vote or voice if these can be easily manipulated? Or do you not think you’re being manipulated? How many of you, American or European, think Russia is an actual threat to you? I’m afraid by now there’s a majority on each continent who perceive Putin as an evil force. The president of a country that spends one-tenth on its military of what the US does. Trump’s announced military spending increase alone is almost as much as Russia spends in a whole year.

If Putin is really the threat he’s made out to be, to both Europe and the US, he must be extremely smart; merely devious wouldn’t do it. A man who can be an active threat to two entire continents and almost a billion people while spending a fraction on building that threat of what those he threatens do, must be a genius. Or the victim of media-politico manipulation.

But we don’t stop there. As the CIA spying and hacking files once again make abundantly clear, America increasingly seeks its enemies at home. This may be presented in the shape of Donald Trump, or terrorists on US soil, imported or not, but claiming that we can still tell a real threat from an invented one is no longer credible. We are led along on a propaganda leash 24/7, and the best thing about it is we believe we are not. That’s why it’s a good idea to pay close attention to what WikiLeaks is telling us.

The most extreme example of the political machinery turning our friends into enemies is probably right there, in the WikiLeaks and whistleblower corner of society. Earlier today I wrote:

The CIA spent a huge wad of taxpayer money on this, and then lost it all. It’s early days to say what this will mean for the agency’s abilities, and the nation’s safety, as well as that of American citizens, but it’s not good. Question is: who’s going to investigate how this could have happened? (Snowden and Kim Dotcom could)… And who’s going to repair the damage done? Anyone could be spying on your phone and your TV by now, not just the CIA -as if that wouldn’t be bad enough.

Then later I saw I wasn’t the only one who had thought of this:

 

 

Edward Snowden and Kim Dotcom and Julian Assange and Chelsea Manning are ‘the enemy’, so say our ‘leaders’. They have received this honorable label for exposing secrets these same leaders were trying to hide from us. Secrets most of us, if we think it over, would say should not be kept from us. The NSA spying on the American people, or the CIA turning your phones and TVs and cars into objects that can be used against you, these are things that don’t belong in our societies.

Still, as I’ve always said, if they can do it -from a technical point of view-, they will, damn the law. So we will have to make very sure the laws keep up with these developments, or we’re defenseless. The Obama administration hasn’t been much help with this, and the rest of Washington won’t be either, they’re not just part of the machine, they are the engine that drives the machine. Obama allegedly gave in to the CIA for fear of ending up like JFK and the rest, along with the press, is under control too.

So perhaps Trump is our best chance at putting a stop to this coup, this deep state, from taking over. If we still can. And for that we might well need Snowden and Dotcom and Assange, who are not the enemies they are made out to be, they are the smartest among us, or at least they belong right up there. And they are not only the smartest, they are the bravest too. Locking them up would be a huge disservice to our societies, it would be much better to ask them to help us figure out what game the hell is being played.

 

One thing the WikiLeaks files accomplished is they made and and all accusations of Russian hacking, and of links between Trump and Russia, utterly meaningless in one fell swoop. Because the CIA has acquired the capability, both through hacking Russian files and through coding, to leave ‘footprints’ that make it look like the Russians left them. And the only ‘proof’ there ever was for all these accusations was based on these footprints. That’s one narrative that must now be restarted from scratch -just one of many.

All we need now is for Trump to figure out who his enemies are, and who his friends. He already knows the CIA is not his friend, but has he figured out yet that the whistleblowers are not his enemy? And has his crew? Kim Dotcom is right, Trump is in real danger, he’s been watched, and being watched, 24/7. Whether Obama ordered that or not is not very relevant. There are more urgent matters at hand.

And somewhere along the way he’s going to have to figure out that chasing women and children around the country and out of it is not just ugly, it’ll cost him too much sympathy too. But so far all protests come from the Democrats and their supporters, who have all been left voiceless and shapeless by the election and now see their Russian conspiracy narratives blown to smithereens too, so why wouldn’t he please his own voters for a bit longer?

Well, for one thing, because he has to start to realize he’s going to need very broad support, and soon, be a president for all Americans so to speak, to fend off the CIA et al, and in what may be the hardest thing to do, he needs to invoke transparency, explain to people exactly what he does, and why, to drain the deep swamp.

If he fails in all this, and for now the odds point in that direction, those who protest him today will feel validated, right, and winners. They will be tragically wrong. Because if Trump loses this, the CIA wins. And then we will all live in 1984 for as far into the future as we can see.

I know there’s a lot that’s not to like about Trump and Bannon and all those guys. However, look at it this way: they are the only ones who can keep the doors of the vault from slamming shut for the rest of our lives, leaving time for y’all to wake up and find a president who doesn’t seek to turn your friends into your enemies. At least you’ll still have that choice.

With present-day Washington, Democrat or Republican, there’s no such choice. They’re CIA, as are the media. Kim Dotcom tweeted this too today:

 

 

 

Feb 192017
 
 February 19, 2017  Posted by at 10:23 am Finance Tagged with: , , , , , , , , ,  4 Responses »
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John Vachon Beer signs on truck, Little Falls, Minnesota 1940

 


Fed: From Lender Of Last Resort To Destroyer Of American Wealth (DDMB)
“There’s Something Weird Going On”: The Global Dollar Shortage (ZH)
Merkel Suggests Euro Is Too Low For Germany (R.)
Empowering “Deep State” is Prescription for Destroying Democracy (Greenwald)
Sekulow: Obama Should Be “Held Accountable” For “Soft Coup” Against Trump (ZH)
Russia Calls For ‘Post-West’ World Order – Lavrov (R.)
Lavrov on US Election Hacking Claims: ‘Give Us Some Facts’ (BBG)
Nine People Flee US Border Patrol To Seek Asylum In Canada (R.)
GMO Crops Are Driving Genocide And Ecocide – Keep Them Out Of The EU! (Paul)
‘From Bad To Worse’: Greece Hurtles Towards A Final Reckoning (O.)
Greek Banks Worry Over Sudden Bad Loan Spike In January (K.)
Greeks Turn to the Black Market as Another Bailout Showdown Looms (NYT)
Tensions Escalate In Aegean As Turkish Boat Fires Shots in Greek Waters (K.)
Defend The Sacred (Bell)

 

 

Looks like a must read: [..] a special preview excerpt from FED UP: An Insider’s Take on Why The Federal Reserve is Bad for America by Danielle DiMartino Booth.

She agrees with me: “The one true growth industry? That would be all that high cotton harvested in high finance. Since 2007, world debt has grown by about $60 trillion, enriching legions of investment bankers one bond deal at a time.”

Fed: From Lender Of Last Resort To Destroyer Of American Wealth (DDMB)

Created in 1913 after the Panic of 1907, the Federal Reserve was founded to keep the public’s faith in the buying power of the U.S. dollar. After failing miserably in the 1930s, the Fed aimed to be more responsive. This led the institution to find discipline in the rising macroeconomic models championed by top monetary theorists. During the ensuing “Quiet Period” in American banking, deposit insurance prevented panics, the Fed controlled interest rates and manipulated the money supply, and though occasional disruptions flared, like the failure of Continental Illinois National Bank and Trust Company in 1984, no systemic risk erupted for seventy years. The Fed had tamed the volatile U.S. economy.

Until September 2008, when all hell broke loose in a worldwide panic that completely blindsided and, embarrassed the Federal Reserve. The Fed had used billions of dollars in taxpayer funds to bail out Wall Street fat cats. Everyone blamed the Fed. Just before 9 a.m., the door to the chairman’s office opened. Federal Reserve Chairman Ben Bernanke took his place in an armchair at the center of a massive oval table. The members of the FOMC found their designated places around the table; aides sat in chairs or couches against the wall. With staff, the room contained fifty or sixty people, far more than normal for this momentous occasion. In front of each FOMC member was a microphone to record their words for posterity. To a casual observer, the content of their conversation would be obscured by economic jargon.

This day, their essential task was to vote on whether to take the “fed funds” rate—the interest rate at which banks lent money to each other in the overnight market—to the zero bound. The history-making low rate would ripple throughout the economy, affecting the price to borrow for businesses and consumers alike. Bernanke was calm but insistent. His lifetime of study of the Great Depression indicated this was the only way. His sheer depth of knowledge about the Fed’s mishandling of that tragic period was undoubtedly intimidating. By the end of the meeting, the vote was unanimous. The FOMC officially adopted a zero-interest-rate policy in the hopes that companies teetering on the brink of insolvency would keep the lights on, keep employees on their payrolls, and keep consumers spending. It would even pay banks interest on deposits.

Free cash. We’ll even pay you to take it! As they gathered their belongings, everyone shook hands, all very collegial despite the sometimes vigorous discussion. They journeyed back to their nice homes in the toniest neighborhoods of America’s richest cities: New York, Boston, Philadelphia, Chicago, Dallas, San Francisco, Washington, DC. They returned to their lofty perches, some at the Eccles Building, others to the executive floors of Federal Reserve District Bank buildings, safely cushioned from the decision they had just made. Most of them were wealthy or had hefty defined benefit pensions. Their investments were socked away in blind trusts. They would feel no pain in their ivory towers.

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A Eurodollar is a dollar held anywhere outside the US.

“There’s Something Weird Going On”: The Global Dollar Shortage (ZH)

While we urge readers to listen to the full interview below, here are some of the highlights, starting with “why the Dollar shortage a symptom of an inherently unstable system.” As Snider explains, “the dollar shortage isn’t so much the shortage per se, it’s the fact that it’s a symptom of what is an inherently unstable system.” He notes that “the reason banks are withdrawing from the system is that it’s just is no longer tenable” and “so there has to be some kind of – whether you want to look at it like another Bretton Woods – conference, a global monetary system, a global monetary get together where people start to analyze solutions to the problem as they are rather than keep trying to apply band aids that are not going to work. ” But, he concludes, “step one of that task is to actually recognize the problem as it is and so doing more stimulus or doing more QE isn’t going to solve anything it isn’t do anything just like prior QEs and prior stimulus haven’t done anything either because the problem is an unstable system.”

Snider focuses on the Eurodollar system, which he defines as a problem of “decay and dysfunction” and explains that “nothing ever happens in a straight line even the Eurodollar problem has not been a singular event. It’s not been a decade long straight line of decay and dysfunction.” He goes on to say that the fact that after enough time these markets have adjusted to the fact that the economy’s going to be bad for a very long time until something actually changes and so true reflation is predicated on something actually changing rather than the hope that something might change.

Looking at history, Snider observes that “what happened in July 2008 obviously was the fact that everyone decided almost all at once that wasn’t the right interpretation of what the Fed was doing nor was it the right interpretation of the dollar system overall. So, that reflation ended in reality which was the dollar system was eroding and it was eroding in a very dangerous way and that’s why oil prices essentially crashed from July till I think January 2009.” An implication of the ongoing reserve currency funding shortage is that, according to Snider, despite the occasional blip (arguably funded by massive Chinese credit creation), “reflation is going to fail and there’s nothing the Fed can do about it.” He goes on to state that “until they fix the global dollar problem we’re not going to fix the global economy and so we’re kind of stuck gyrating between various levels of really bad. We go from the lack of recovery to what looks like a global recession to the lack of recovery and back again” as a result he thinks that “reflation is going to fail.”

[..] Snider summarizes by saying that “the fact that these markets realize that there’s a problem in Eurodollar system, there’s no banking to be had, no additional marginal banking capacity being added and without it none of these stuff really matters, none of these other stuff really matters. That’s the only thing that truly matters” and concludes gloomily that “the probability scenarios for economic and financial future are much darker now than they were three years ago.”

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It’s blowing the EU apart but its de facto leader says she has “no power to address this problem”. That’s just great.

Merkel Suggests Euro Is Too Low For Germany (R.)

German Chancellor Angela Merkel suggested on Saturday that the euro was too low for Germany but made clear that Berlin had no power to address this “problem” because monetary policy was set by the independent ECB. Merkel made her remarks at the Munich Security Conference as U.S. Vice President Mike Pence looked on. They seemed aimed at addressing recent criticism from a top trade adviser to President Donald Trump, who has accused Germany of profiting from a “grossly undervalued” euro. “We have at the moment in the euro zone of course a problem with the value of the euro,” Merkel said in an unusual foray into foreign exchange rate policy.

“The ECB has a monetary policy that is not geared to Germany, rather it is tailored (to countries) from Portugal to Slovenia or Slovakia. If we still had the (German) D-Mark it would surely have a different value than the euro does at the moment. But this is an independent monetary policy over which I have no influence as German chancellor.” The euro has fallen nearly 25% against the dollar over the past three years, touching a 14-year low of $1.034 in January. But it has since risen to roughly $1.061. In late January, Peter Navarro, the head of Trump’s new National Trade Council, said the euro’s low valuation was giving Germany an edge over the United States and its European Union partners. His comments came weeks after Trump himself said the dollar’s strength against the Chinese yuan “is killing us”, deepening concerns that his administration could pursue a more confrontational, protectionist approach to trade. Merkel and other German officials pushed back forcefully at the time.

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Lots of Deep State pieces these days. Greenwald provides some balance.

Empowering “Deep State” is Prescription for Destroying Democracy (Greenwald)

The deep state, although there’s no precise or scientific definition, generally refers to the agencies in Washington that are permanent power factions. They stay and exercise power even as presidents who are elected come and go. They typically exercise their power in secret, in the dark, and so they’re barely subject to democratic accountability, if they’re subject to it at all. It’s agencies like the CIA, the NSA and the other intelligence agencies, that are essentially designed to disseminate disinformation and deceit and propaganda, and have a long history of doing not only that, but also have a long history of the world’s worst war crimes, atrocities and death squads. This is who not just people like Bill Kristol, but lots of Democrats are placing their faith in, are trying to empower, are cheering for as they exert power separate and apart from—in fact, in opposition to—the political officials to whom they’re supposed to be subordinate.

And you go—this is not just about Russia. You go all the way back to the campaign, and what you saw was that leading members of the intelligence community, including Mike Morell, who was the acting CIA chief under President Obama, and Michael Hayden, who ran both the CIA and the NSA under George W. Bush, were very outspoken supporters of Hillary Clinton. In fact, Michael Morell went to The New York Times, and Michael Hayden went to The Washington Post, during the campaign to praise Hillary Clinton and to say that Donald Trump had become a recruit of Russia. The CIA and the intelligence community were vehemently in support of Clinton and vehemently opposed to Trump, from the beginning. And the reason was, was because they liked Hillary Clinton’s policies better than they liked Donald Trump’s.

One of the main priorities of the CIA for the last five years has been a proxy war in Syria, designed to achieve regime change with the Assad regime. Hillary Clinton was not only for that, she was critical of Obama for not allowing it to go further, and wanted to impose a no-fly zone in Syria and confront the Russians. Donald Trump took exactly the opposite view. He said we shouldn’t care who rules Syria; we should allow the Russians, and even help the Russians, kill ISIS and al-Qaeda and other people in Syria. So, Trump’s agenda that he ran on was completely antithetical to what the CIA wanted. Clinton’s was exactly what the CIA wanted, and so they were behind her. And so, they’ve been trying to undermine Trump for many months throughout the election. And now that he won, they are not just undermining him with leaks, but actively subverting him. There’s claims that they’re withholding information from him, on the grounds that they don’t think he should have it and can be trusted with it. They are empowering themselves to enact policy.

Now, I happen to think that the Trump presidency is extremely dangerous. You just listed off in your news—in your newscast that led the show, many reasons. They want to dismantle the environment. They want to eliminate the safety net. They want to empower billionaires. They want to enact bigoted policies against Muslims and immigrants and so many others. And it is important to resist them. And there are lots of really great ways to resist them, such as getting courts to restrain them, citizen activism and, most important of all, having the Democratic Party engage in self-critique to ask itself how it can be a more effective political force in the United States after it has collapsed on all levels. That isn’t what this resistance is now doing.

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The timing is indeed very peculiar.

Sekulow: Obama Should Be “Held Accountable” For “Soft Coup” Against Trump (ZH)

[..] what until recently was a trickle of private data captured about US individuals by the NSA with only a handful of people having full, immersive access, suddenly became a firehose with thousands of potential witnesses across 16 other agencies, each of whom suddenly became a potential source of leaks about ideological political opponents. And with the universe of potential “leaking” culprits suddenly exploding exponentially, good luck finding the responsible party. However, the implications are far more serious than just loss of privacy rights. According to civil right expert and prominent First Amendement Supreme Court lawyer, Jay Sekulow, what the agencies did by leaking the Trump Administration information was not only illegal but “almost becomes a soft coup”, one which was spurred by the last minute rule-change by Obama, who intentionally made it far easier for leaks to propagate, and next to impossible to catch those responsible for the leaks.

This is his explanation: “There was a sea-change here at the NSA with an order that came from president Obama 17 days before he left office where he allowed the NSA who used to control the data, it now goes to 16 other agencies and that just festered this whole leaking situation, and that happened on the way out, as the president was leaving the office. Why did the Obama administration wait until it had 17 days left in their administration to put this order in place if they thought it was so important. They had 8 years, they didn’t do it, number one. Number two, it changed the exiting rule which was an executive order dating back to Ronald Reagan, that has been in place until 17 days before the Obama administration was going to end, that said the NSA gets the raw data, and they determine dissemination.

Instead, this change that the president put in place, signed off by the way by James Clapper on December 15, 2016, signed off by Loretta Lynch the Attorney General January 3, 2017, they decide that now 16 agencies can get the raw data and what that does is almost creates a shadow government. You have all these people who are not agreeing with President Trump’s position, so it just festers more leaks. If they had a justification for this, wonderful, why didn’t they do it 8 years ago, 4 years ago, 3 years ago. Yet they wait until 17 days left. One potential answer: they knew they had a “smoking gun”, and were working to make it easier to enable the information to be “leaked” despite the clearly criminal consequences of such dissemination.

As this point Hannity correctly points out, “it makes it that much more difficult by spreading out the information among 16 other agencies, if they want to target or take away the privacy rights, and illegally tap the phones, in this case General Flynn, it’s going to be much harder to find the perpetrator. Sekulow confirms, noting that back when only the NSA had access to this kind of raw data, there would be a very small amount of people who have access to this kind of data. “But this change in the Obama Administration was so significant that they allowed dissemination to 16 other agencies, and we wonder why there’s leaks.” Sekulow’s conclusion: “President Obama, James Clapper, Loretta Lynch should be held accountable for this.”

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Russia’s no big fan of -unfetterred- globalization either: “I hope that (the world) will choose a democratic world order – a post-West one – in which each country is defined by its sovereignty.”

Russia Calls For ‘Post-West’ World Order – Lavrov (R.)

Russian Foreign Minister Sergei Lavrov called Saturday for an end to a world order dominated by the West and said Moscow wanted to establish a “pragmatic” relationship with the United States. Lavrov was speaking at the Munich Security Conference shortly after US Vice President Mike Pence told the audience Washington remained “unwavering” in its commitment to the US-led NATO military alliance as it faced a more assertive Russia. Lavrov said that the time when the West called the shots was over and, dismissing NATO as a relic of the Cold War, added: “I hope that (the world) will choose a democratic world order – a post-West one – in which each country is defined by its sovereignty.”

Lavrov said Moscow wanted to build relations with Washington which would be “pragmatic with mutual respect and acknowledgement of our responsibility for global stability.” The two countries had never been in direct conflict, he said, noting that they were actually close neighbours across the Baring Straits. Russia wanted to see a “common space of good neighbour relations from Vancouver to Vladivostok,” he added. Pence was in Europe along with Secretary of State Rex Tillerson and defence chief James Mattis as part of efforts to reassure allies rattled by President Donald Trump’s “America First” stance and his calls for improved ties with Russia despite the continuing crisis in Ukraine.

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“He said Russia had “many years ago” initiated work at the United Nations to discuss information security. “Our western partners evaded that work..”

Lavrov on US Election Hacking Claims: ‘Give Us Some Facts’ (BBG)

Foreign Minister Sergei Lavrov pushed back against accusations that Russian hackers meddled in last year’s U.S. presidential election, saying no one had put forward any proof and former President Barack Obama’s administration ignored repeated overtures to discuss cyber-security norms. “Somehow when we are blamed, no one asked for facts,” Lavrov said at the Munich Security Summit on Saturday. “Give us some facts.” In his remarks, made in response to an audience question about whether Russia interferes in other countries’ elections, Lavrov portrayed Russia as a leader in efforts to focus on information security. He said Russia had “many years ago” initiated work at the United Nations to discuss information security. “Our western partners evaded that work,” he said.

After Donald Trump won the election in November, the U.S. intelligence community issued an assessment that Russia sought to sway the election in his favor through the hacking of the Democratic National Committee and Hillary Clinton’s campaign staff. In the waning days of his administration, Obama imposed new sanctions on Russia’s military intelligence agency and the successor agency to the KGB, saying the actions had been directed “at the highest level” of the government. [..] “I have seen no facts, there were just some accusations that we tried to hack some Democratic party website; that’s happening in France, Germany, Italy,” Lavrov said. He went on to point blame at the U.S. and make a reference to recent leaks that the CIA may have spied on French political parties before the 2012 election there. WikiLeaks released e-mails making that claim this week.

Lavrov said he had suggested to the Obama administration in 2015 that the two countries discuss working together on cyber-security, and repeatedly asked former Secretary of State John Kerry about the proposal. “For a year we had no reaction from them,” he said. “Then in December last year they said let’s meet, and later they said now we have transitional administration let’s postpone it.”

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Not the first time in history people flee from the US to Canada.

Nine People Flee US Border Patrol To Seek Asylum In Canada (R.)

Nine asylum-seekers, including four children, barely made it across the Canadian border on Friday as a U.S. border patrol officer tried to stop them and a Reuters photographer captured the scene. As a U.S. Customs and Border Patrol officer seized their passports and questioned a man in the front passenger seat of a taxi that had pulled up to the border in Champlain, New York, four adults and four young children fled the cab and ran to Royal Canadian Mounted Police on the other side. One by one they scrambled across the snowy gully separating the two countries. RCMP officers watching from the other side helped them up, lifting the younger children and asking a woman, who leaned on her fellow passenger as she walked, if she needed medical care. The children looked back from where they had come as the U.S. officer held the first man, saying his papers needed to be verified.

The man turned to a pile of belongings and heaved pieces of luggage two at a time into the gully – enormous wheeled suitcases, plastic shopping bags, a black backpack. “Nobody cares about us,” he told journalists. He said they were all from Sudan and had been living and working in Delaware for two years. The RCMP declined on Friday to confirm the nationalities of the people. A Reuters photo showed that at least one of their passports was Sudanese. The man then appeared to grab their passports from the U.S. officer before making a run for the border. The officer yelled and gave chase but stopped at the border marker. Canadian police took hold of the man’s arm as he crossed. The border patrol officer told his counterpart that the man was in the United States illegally and that he would have detained him. Officers on both sides momentarily eyed the luggage strewn in the snow before the U.S. officer took it, and a walker left on the road, to the border line.

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Overview of the damage done across the world by GMO.

GMO Crops Are Driving Genocide And Ecocide – Keep Them Out Of The EU! (Paul)

We currently face a desperate, almost farcical push for GM crops in the UK and Europe, characterised by hyperbolic and inaccurate claims. So rather than taking those claims on trust, let’s look at the impacts of GM crops in countries that have adopted them. That means North and South America, where GM crops were first launched in 1996. The cultivation of herbicide tolerant crops in Argentina began in 1996 with GM soya and spread swiftly through the country. As Argentina’s Grupo Reflexion Rural (GRR) wrote to the Vatican in April 2013, “The model was based on the political decision that Argentina, which had once been the grain basket of the world and a producer of healthy and high-quality foods, would be transformed into a producer of animal forage, firstly, to provide fodder for European livestock, and then for livestock in China.”

At first, herbicide tolerant crops seemed to simplify the farming process, especially for larger mechanised farms. Instead of skillful weed management, farmers applied large quantities of the herbicide glyphosate, mainly from the air. Powerful groups of investors helped drive GM soya production. Small farmers could not compete and many have left or been driven off their land, often into urban slums. People who remain in the countryside and small towns find themselves bombarded from the air with increasingly complex mixtures of chemicals intended to combat the problem of increasing weed and pest resistance. Although GM crops were promoted as a means to reduce levels of pesticides used, pesticide use in Argentina has increased massively, “from nine million gallons (34 million litres) in 1990 to more than 84 million gallons (317 million litres) today”.

[..] Europe has been wise to resist the pressure to adopt GM crops for cultivation except for a GM maize mainly grown in Spain. In the face of the evidence from countries with experience of these crops, and their associated cocktails of agrotoxics, why should Europe be forced to consider another GM crop for cultivation? But Europe should go further. The soya boom is driven by markets for animal feed, in the form of soya meal or cake, and biodiesel from soya oil. Vast quantities of both are imported into Europe, making it a major driver of South America’s unfolding GM disaster. The EU should surely stop importing GM animal feeds and oils from North and South America.

Indeed Europe should change its whole approach to livestock and crop production to address human health impacts, biodiversity loss and climate change. Far from being a “museum of world farming” as the UK’s current environment minister, Owen Paterson, likes to claim, Europe could show the way to a rich and varied GM free agriculture that provides nutritious, healthy food and jobs. It would at the same time address the profound degradation of soils and accelerating biodiversity loss, caused to a great extent by the industrial model of agriculture to which genetically engineered crops belong.

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“All I know is that we are all being pushed,” he said, searching for the right words. “Pushed in the direction of somewhere very explosive, somewhere we do not want to be.”

‘From Bad To Worse’: Greece Hurtles Towards A Final Reckoning (O.)

The assumption is that the prime minister, Alexis Tsipras, will cave in, just as he did when the country came closest yet to leaving the euro at the height of the crisis in the summer of 2015. But the 41-year-old leader, like Syriza, has been pummelled in the polls. Persuading disaffected backbenchers to support more measures, and then selling them to a populace exhausted by repeated rounds of austerity, will be extremely difficult. Disappointment has increasingly given way to the death of hope – a sentiment reinforced by the realisation that Cyprus and other bailed-out countries, by contrast, are no longer under international supervision.

In his city centre office, the former finance minister Evangelos Venizelos pondered where Greece’s predicament was now. “[We are] at the same point we were several years ago,” he joked. “The only difference is that anti-European sentiment is growing. What was once a very friendly country towards Europe is becoming increasingly less so, and with that comes a lot of danger, a lot of risk.” When historians look back they, too, may conclude that Greece has expended a great deal of energy not moving forward at all.

The arc of crisis that has swept the country – coursing like a cancer through its body politic, devastating its public health system, shattering lives – has been an exercise in the absurd. The feat of pulling off the greatest fiscal adjustment in modern times has spawned a slump longer and deeper than the Great Depression, with the Greek economy shrinking more than 25% since the crisis began. Even if the latest impasse is broken and a deal is reached with creditors soon, few believe that in a country of weak governance and institutions it will be easy to enforce. Political turbulence will almost certainly beckon; the prospect of “Grexit” will grow.

“Grexit is the last thing we want, but we may arrive at a point of serious dilemmas,” said Venizelos. “Whatever deal is reached will be very difficult to implement, but that notwithstanding, it is not the memoranda [the bailout accords] that caused the crisis. The crisis was born in Greece long before.” Like every crisis government before it, Tsipras’s administration is acutely aware that salvation will come only when Greece can return to the markets and raise funds. What happens in the weeks ahead could determine if that is likely to happen at all. Back in Syntagma, Costopoulos the good-natured farmer ponders what lies ahead. Like every Greek, he stands to be deeply affected. “All I know is that we are all being pushed,” he said, searching for the right words. “Pushed in the direction of somewhere very explosive, somewhere we do not want to be.”

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Greek banks never recovered.

Greek Banks Worry Over Sudden Bad Loan Spike In January (K.)

Nonperforming loans last month posted a major spike of almost 1 billion euros, reversing the downward course set in the last few months of 2016. This has generated major concerns among local lenders regarding the achievement of targets for reducing bad loans, as agreed with the Single Supervisory Mechanism (SSM) of the ECB for the first quarter of this year. Bank sources say that after several months of stabilization and of a negative growth rate in new nonperforming exposure,the picture deteriorated rapidly in January, as new bad loans estimated at €800 million in total were created. This increase in a period of just one month is considered particularly high, and is a trend that appears to be continuing this month as well.

Bank officials attribute the phenomenon to uncertainty from the government’s inability to complete the second bailout review, fears for a rekindling of the crisis and mainly the expectations of borrowers for extrajudicial settlements of bad loans. Senior bank officials note that a large number of borrowers will not cooperate with their lenders in reaching an agreement for the restructuring of their debts, in the hope that the introduction by the government of the extrajudicial compromise could lead to better terms and possibly even to a debt haircut

Banks further observe that the issue of the extrajudicial settlement, along with the matter of the deferred tax assets for the tackling of banks’ losses from the write-off or sale of bad loans, are of major significance to the general issue of dealing with the NPL problem, so they have to be arranged rapidly. Even more important to the banking sector is the completion of the pending bailout review, as uncertainty and the re-emergence of fears over a possible Greek exit from the eurozone have frozen the market and encouraged many people to avoid paying their dues in anticipation of negotiations. This unexpected deterioration in the quality of loan portfolios in recent weeks has banks on edge, as NPLs will have to be reduced by €2.5 billion by end-March, which will be particularly difficult to achieve given the fresh addition of another €800 million.

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Forced out of work by Troika demands.

Greeks Turn to the Black Market as Another Bailout Showdown Looms (NYT)

During seven years of a grinding economic crisis, Dimitri Tsamopoulos has lost at least half the clients from his once bustling tax consultancy. But in the past few months, business has jumped, not because the Greek economy is finally recovering but because it is falling even deeper into the abyss. With the Greek government pushing through more tax increases to comply with austerity requirements, more than 21,000 self-employed workers and small firms have shut down in the past two months, with many seeking help from accountants like Mr. Tsamopoulos to close their books. Yet many are not actually closing their businesses. “Most of these people will keep working,” Mr. Tsamopoulous said, arching an eyebrow from behind his desk as clients waited in a smoky room outside. “But now, they’ll do it on the black market. They’re saying they need a way to survive.”

Greece is the crisis that never quite goes away for the EU, and with another tense negotiation with creditors scheduled for this coming week, the country is struggling to recover from the longest downturn in the eurozone. The budget-slashing policies and reform medicine required by creditors have done little to revive growth, leaving Greece even more dependent on the three international bailouts the country has received since 2010. Few problems are more ingrained, or harder to combat, than the shadow economy, which appears to be growing again as new austerity measures compel once law-abiding Greeks to go off the books. Greece’s black market is estimated at 20 to 25% of the gross domestic product, as more people have stopped reporting their income to avoid paying taxes that, by some estimates, have risen to 70% of an individual’s gross income.

As of last month, unpaid taxes in Greece had soared to €95 billion, up from €76 billion two years ago. Most of that is considered uncollectable. “The heart of the matter for an ever-rising number of citizens and businesses is that they simply do not have the financial resources anymore to meet their rising tax obligations,” said Jens Bastian, an economist and a member of a team of European Union specialists that helped supervise the country’s earlier bailouts. Short on alternatives, he said, “many are falling back into the gray economy.”

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Again: US and EU need to be very careful about this. And act.

Tensions Escalate In Aegean As Turkish Boat Fires Shots in Greek Waters (K.)

Tension between Greece and Turkey escalated further on Friday after a Turkish coastal patrol boat fired live ammunition during a military exercise in Greek territorial waters in the eastern Aegean Sea. [..] a Greek diplomatic source described the incident in the area around the eastern Aegean island of Farmakonisi, as “a grave violation of international law.” “Turkey’s unacceptable act raises serious concerns about the potential consequences of its behavior on the stability of the wider region,” the same source said. Greek defense officials were reportedly preparing to lodge a demarche with Ankara and brief allies and international organizations on the incident.

According to the Defense Ministry, Turkish authorities issued a navigational telex, or Navtex, the day before informing of a military exercise with live ammunition within Greek territorial waters, east of Farmakonisi, on Friday [yesterday] morning between 7 and 9 a.m. The Greek Defense Ministry responded by issuing a Navtex turning down the Turkish notification, saying it covered Greek territorial waters. Turkish authorities have previously issued similar notifications without executing them. The Greek gunboat Nikiforos was sent to the area to monitor the Turkish Kusadasi vessel, which fired a volley of shots from small caliber (up to 40mm) guns between 7.40 and 7.55 a.m., until it left the area just before 8 a.m.

[..] Friday’s incident occurred in the wake of repeated Turkish violations of Greek air space and increased tensions between Athens and Ankara, which were further fueled last month when Greece’s highest court blocked the extradition of eight Turkish officers to Turkey for their alleged involvement in July’s failed coup. Reacting to the development on Friday, Greece’s conservative opposition requested a meeting of the country’s National Council of Foreign Policy. “We are deeply concerned to witness Turkey’s insistence on provoking [Athens] and maintaining a climate of tension in the Aegean,” New Democracy shadow foreign minister Giorgos Koumoutsakos said in a letter to Foreign Minister Nikos Kotzias.

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“How do you capture Spirit?”

Defend The Sacred (Bell)

Defend The Sacred: Documentary from Kyle Bell on Vimeo.

Capturing the heart of a movement that is constantly evolving is difficult. How do you capture Spirit? “Defend The Sacred” is a short documentary that attempts to capture the spirit of Indigenous people at Standing Rock.

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Jan 212017
 
 January 21, 2017  Posted by at 10:57 am Finance Tagged with: , , , , , , , ,  3 Responses »
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Bettmann/Getty Minimum Wage 1963


Trump’s Declaration of War (Paul Craig Roberts)
The Audacity of Trump (WSJ)
Trump Trade Strategy Starts With Quitting TPP – White House (R.)
Trump, in Oval Office, Signs First Order on Obamacare (R.)
Trump Reverses Obama’s Mortgage Fee Cuts on First Day (BBG)
Far-Right Leaders Meet To Discuss ‘Free Europe’ Vision (R.)
As Housing Bubble Pops, Chinese Real Estate Firms Halt Monthly Pricing Data (ZH)
The Curse of Econ 101 (Atlantic)
Economics, Society, And The Environment (EI)
Turkish Parliament Approves Constitutional Reform, Expanded Powers For Erdogan
With New Constitution, Erdogan Eyes For One-Man Rule (GP)
Greek Have Lost Wealth Worth One Year’s GDP Since 2009 (Kath.)

 

 

Who are Trump’s real enemies? There’s no easy answer. PCR concludes: “President Trump has declared a war far more dangerous to himself than if he had declared war against Russia or China.”

Trump’s Declaration of War (Paul Craig Roberts)

President Trump’s brief inaugural speech was a declaration of war against the entirety of the American Ruling Establishment. All of it. Trump made it abundantly clear that Americans’ enemies are right here at home: globalists, neoliberal economists, neoconservatives and other unilateralists accustomed to imposing the US on the world and involving us in endless and expensive wars, politicians who serve the Ruling Establishment rather than the American people, indeed, the entire canopy of private interests that have run America into the ground while getting rich in the process. If truth can be said, President Trump has declared a war far more dangerous to himself than if he had declared war against Russia or China.

The interest groups designated by Trump as The Enemy are well entrenched and accustomed to being in charge. Their powerful networks are still in place. Although there are Republican majorities in the House and Senate, most of those in Congress are answerable to the ruling interest groups that provide their campaign funds and not to the American people or to the President. The military/security complex, offshoring corporations, Wall Street and the banks are not going to roll over for Trump. And neither is the presstitute media, which is owned by the interest groups whose power Trump challenges. Trump made it clear that he stands for every American, black, brown, and white. Little doubt his declaration of inclusiveness will be ignored by the haters on the left who will continue to call him a racist just as the $50 per hour paid protesters are doing as I write.

Indeed, black leadership, for example, is enculturated into the victimization role from which it would be hard for them to escape. How do you pull together people who all their lives have been taught that whites are racists and that they are the victims of racists? Can it be done? I was just on a program briefly with Press TV in which we were supposed to provide analysis of Trump’s inaugural speech. The other commentator was a black American in Washington, DC. Trump’s inclusiveness speech made no impression on him, and the show host was only interested in showing the hired protesters as a way of discrediting America. So many people have an economic interest in speaking in behalf of victims that inclusiveness puts them out of jobs and causes.

So along with the globalists, the CIA, the offshoring corporations, the armaments industries, the NATO establishment in Europe, and foreign politicians accustomed to being well paid for supporting Washington’s interventionist foreign policy, Trump will have arrayed against him the leaders of the victimized peoples, the blacks, the hispanics, the feminists, the illegals, the homosexuals and transgendered. This long list, of course, includes the white liberals as well, as they are convinced that flyover America is the habitat of white racists, misogynists, homophobes, and gun nuts. As far as they are concerned, this 84% of geographical US should be quarantined or interred.

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WSJ licking up to power?

The Audacity of Trump (WSJ)

Donald J. Trump takes the oath of office on Friday facing unprecedented opposition but also an extraordinary opportunity. He confronts the paradox of a country skeptical that he has the personal traits for the Presidency but still hopeful he can fulfill his promise to shake up a government that is increasingly powerful even as it fails to work. In this respect he is the opposite of President Obama, whom Americans admire personally but see as a failure in delivering on his promises. Mr. Trump begins his Presidency without a reservoir of personal goodwill, so more than most Commanders in Chief he will have to win over Americans with results. He will have to do this, moreover, against a political opposition that is blunt and relentless in wanting him to fail. Inaugurations are typically moments of political unity and appeals to larger national purpose, but Mr. Trump will get no honeymoon.

Democratic leaders are calling his election illegitimate, and most of the media wants Mr. Trump to implode—for reasons of partisanship, ideology or simply to vindicate their view during the campaign that he couldn’t and shouldn’t win. No President since Nixon will face a more hostile resistance in the press and permanent bureaucracy. Yet rather than rage against this hostility, Mr. Trump should view it as an opportunity. So many elites expect him to fail that even small early successes will confound them. So many on the left are predicting the rise of fascism that he can make them look foolish by working well with Congress. So many in the media will portray him as the leader of a gang of billionaires that he can turn the tables with an up-from-poverty and education choice campaign.

Mr. Trump owes his narrow election victory to center-right and independent voters who decided he was a risk worth taking. Notably, they seem to be reserving judgment. In the new Wall Street Journal/NBC News poll, Mr. Trump’s personal popularity rating is 10 points underwater, 38% positive, 48% negative—the lowest of any modern President at inauguration. But as notably, the public is better disposed to Mr. Trump’s agenda than to his character and temperament. Tax reform, a faster campaign against Islamic State, improving roads and bridges, and fixing health care enjoy widespread support. If voters are ambivalent about Mr. Trump personally, he has a policy opening to earn their support.

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Hard not to be happy about this.

Trump Trade Strategy Starts With Quitting TPP – White House (R.)

The new U.S. administration of President Donald Trump said on Friday its trade strategy to protect American jobs would start with withdrawal from the 12-nation Trans-Pacific Partnership (TPP) trade pact. A White House statement issued soon after Trump’s inauguration said the United States would also “crack down on those nations that violate trade agreements and harm American workers in the process.” The statement said Trump was committed to renegotiating another trade deal, NAFTA, which was signed in 1994 by the United States, Canada and Mexico. “For too long, Americans have been forced to accept trade deals that put the interests of insiders and the Washington elite over the hard-working men and women of this country,” it said.

“As a result, blue-collar towns and cities have watched their factories close and good-paying jobs move overseas, while Americans face a mounting trade deficit and a devastated manufacturing base.” The statement said “tough and fair agreements” on trade could be used to grow the U.S. economy and return millions of jobs to America. “This strategy starts by withdrawing from the Trans-Pacific Partnership and making certain that any new trade deals are in the interests of American workers.” If NAFTA partners refused to give American workers a fair deal in a renegotiated agreement, “the President will give notice of the United States’ intent to withdraw from NAFTA,” the statement added.

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Better get a replacement fast. You don’t want stories of people dying due to lack of access to health care, in your first weeks or months.

Trump, in Oval Office, Signs First Order on Obamacare (R.)

President Donald Trump directed government agencies on Friday to freeze regulations and take steps to weaken Obamacare, using his first hours in the White House to make good on a campaign promise to start dismantling his predecessor’s healthcare law. Heading into the Oval Office shortly after the conclusion of his inaugural parade, Trump signed an order on the Affordable Care Act that urged government departments to “waive, defer, grant exemptions from, or delay the implementation” of provisions that imposed fiscal burdens on states, companies or individuals. It also called for efforts to give states greater flexibility in implementing healthcare programs while developing “a free and open market in interstate commerce for the offering of healthcare services and health insurance.”

Health experts had speculated that Trump could expand exemptions from the so-called individual mandate, which requires Americans to carry insurance or face a penalty, or the requirement that employers offer coverage. Experts also believe the administration could try to reduce the “essential benefits,” such as maternity care and mental health services, that insurance plans must cover. The White House did not provide further details about the executive order. Trump’s spokesman Sean Spicer said the White House also directed an immediate regulatory freeze for all government agencies in a memo from Trump’s chief of staff, Reince Priebus. He did not offer details. Repealing and replacing the Affordable Care Act, one of former President Barack Obama’s signature laws, was a central pledge for Trump during the presidential election campaign.

Republicans in the U.S. Congress have not yet laid out a plan to recast the insurance program. In a hastily arranged ceremony, surrounded by some of his aides, Trump sat behind the presidential Resolute Desk and signed the order. He also signed commissions for his newly confirmed defense secretary, James Mattis, and his homeland security secretary, John Kelly. Trump spoke briefly about his day with reporters. “It was busy, but good. It was a beautiful day,” he said. Vice President Mike Pence then swore in Mattis and Kelly in a separate ceremony. There were other signs of change in the Oval Office, which Obama vacated on Friday morning. Golden drapes hung where crimson ones had earlier in the day and new furniture dotted the room.

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The entire US housing system is such a mess it’s hard to know where to begin. Whatever happens, it will be painful.

Trump Reverses Obama’s Mortgage Fee Cuts on First Day (BBG)

Soon after Donald Trump was sworn in as president, his administration undid one of Barack Obama’s last-minute economic-policy actions: a mortgage-fee cut under a government program that’s popular with first-time home buyers and low-income borrowers. The new administration on Friday said it’s canceling a reduction in the Federal Housing Administration’s annual fee for most borrowers. The cut would have reduced the annual premium for someone borrowing $200,000 by $500 in the first year. The reversal comes after Trump’s team criticized the Obama administration for adopting new policies as it prepared to leave office. In the waning days of the administration, the White House announced new Russia sanctions, a ban on drilling in parts of the Arctic and many other regulations.

Last week, Obama’s Housing and Urban Development secretary, Julian Castro, said the FHA would cut its fees. The administration didn’t consult Trump’s team before the announcement. Republicans have argued in the past that reductions put taxpayers at risk by lowering the funds the FHA has to deal with mortgage defaults. [..] A letter Friday from HUD to lenders and others in the real-estate industry said, “more analysis and research are deemed necessary to assess future adjustments while also considering potential market conditions in an ever-changing global economy that could impact our efforts.” Senate Democratic leader Chuck Schumer of New York took to the chamber’s floor to denounce the reversal. “It took only an hour after his positive words on the inaugural platform for his actions to ring hollow,” Schumer said. “One hour after talking about helping working people and ending the cabal in Washington that hurts people, he signs a regulation that makes it more expensive for new homeowners to buy mortgages.”

Mark Calabria, director of financial regulation studies for the libertarian Cato Institute, said it was appropriate for the administration to examine last-minute decisions by its predecessor, “especially when those decisions appear to be purely motivated by politics.” Ben Carson, Trump’s nominee to lead HUD, FHA’s parent agency, said at his confirmation hearing last week that he was disappointed the cut was announced in Obama’s final days in office. The FHA sells insurance to protect against defaults and doesn’t issue mortgages. It is a popular program among first-time home buyers because it allows borrowers to make a down payment of as low as 3.5% with a credit score of 580, on a scale of 300 to 850. The Obama administration announced last week it would cut the insurance premium by a quarter of a %age point to 0.60%, effective on Jan. 27.

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The products of a failed consensus system. Or in other words: “While you were sleeping”. Obama’s last phone call from the White House was to Merkel, not a coincidence.

Far-Right Leaders Meet To Discuss ‘Free Europe’ Vision (R.)

Far-right populist leaders from Germany, France, Italy and the Netherlands meet in the German city of Koblenz on Saturday to present their vision for “a free Europe” that would dismantle the European Union. Marine Le Pen, who is expected to make it into a May 7 second-round run-off for the French presidency, is due to speak at the meeting, along with Frauke Petry of the anti-immigration Alternative for Germany (AfD). They will be joined by Geert Wilders, leader of the Dutch far-right Freedom Party (PVV) who was last month convicted of discrimination against Moroccans, and Matteo Salvini of the Northern League who wants to take Italy out of the euro. Emboldened by Britons’ vote last year to leave the European Union, the leaders are meeting under the slogan “Freedom for Europe” and aim to strengthen ties between their like-minded parties, whose nationalist tendencies have hampered close collaboration in the past.

“This gives us an opportunity to see how we stand with other European parties,” a spokeswoman for Salvini said. Le Pen told France’s Radio Classique that the meeting was proof that her party was not isolated. “It is therefore the revolution of the people that we are taking part in. It is obviously very important to show that the cooperative Europe we want to achieve (is reflected) in our cooperation,” she said. Several leading German media have been barred from the meeting, which is being organized by the Europe of Nations and Freedom (ENF), the smallest group in the European Parliament, in a year when the parties are hoping for electoral breakthroughs. Populist anti-immigration parties are on the rise across Europe as high unemployment and austerity, the arrival of record numbers of refugees and militant attacks in France, Belgium and Germany feed voter disillusionment with traditional parties.

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“Judged by current conditions, we won’t publish it in the future..”

As Housing Bubble Pops, Chinese Real Estate Firms Halt Monthly Pricing Data (ZH)

That didn’t take long. Earlier this week we reported that after 19 straight months of continued acceleration in home prices, China’s latest housing bubble may have finally burst (again) after December prices in the 70 cities tracked by the NBS, rose by 12.7%, below the 12.9% annual growth rate in the previous month – the first annual decline in nearly 2 years. Fast forward to Friday, when at least two major Chinese private providers of home price data stopped publishing the figures, just as the housing market is stating to cool off at a dramatic pace across all Tier cities. According to Reuters, the China Index Academy, a unit of U.S.-listed Fang Holdings, has stopped distributing monthly housing price index data for 100 cities that it usually issued at the start of the month. The academy said it had suspended distribution indefinitely, without giving a reason for the suspension.

“I don’t know who exactly is making the order, and it’s not mandatory,” said a source with knowledge of the matter, who declined to be identified as the topic is a sensitive one. Home price data from private providers tends to show sharper increases than official data from the National Bureau of Statistics (NBS), which publishes monthly and annual %age changes in 70 major cities. It also overextends on the downside, which according to official data, has now begun, and may explain the self-imposed censorship. Since last summer, in an attempt to cool the overheating housing market, China’s government had levied curbs on buying and ownership to rein in soaring prices and limit asset bubble risks. E-house China, another influential private real estate consultancy also indefinitely suspended its monthly housing price index for 288 cities.

“Judged by current conditions, we won’t publish it in the future,” said Cherilyn Tsui, a public relations officer at CRIC, the consultancy’s real estate research branch. “We stopped distributing prices data a few months ago. At first it was just no external distribution, but now even internally we don’t distribute any more,” she told Reuters. While Tsui said she did not know the reason for the halt, she added that data on sales volumes and inventories would still be published. “Housing prices are an extremely sensitive matter right now,” a second source with knowledge of the matter told Reuters. Perhaps the reason is that having created a massive bubble to the upside, Beijing is hoping to delay the descent in prices in order to attain a smooth landing at a time when China is already faced with record capital outflows, a plunging currency and all time high levels of debt.

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Treating people like tradable resources is always a bad idea.

The Curse of Econ 101 (Atlantic)

In a rich, post-industrial society, where most people walk around with supercomputers in their pockets and a person can have virtually anything delivered to his or her doorstep overnight, it seems wrong that people who work should have to live in poverty. Yet in America, there are more than ten million members of the working poor: people in the workforce whose household income is below the poverty line. Looking around, it isn’t hard to understand why. The two most common occupations in the United States are retail salesperson and cashier. Eight million people have one of those two jobs, which typically pay about $9–$10 per hour. It’s hard to make ends meet on such meager wages. A few years ago, McDonald’s was embarrassed by the revelation that its internal help line was recommending that even a full-time restaurant employee apply for various forms of public assistance.

Poverty in the midst of plenty exists because many working people simply don’t make very much money. This is possible because the minimum wage that businesses must pay is low: only $7.25 per hour in the United States in 2016 (although it is higher in some states and cities). At that rate, a person working full-time for a whole year, with no vacations or holidays, earns about $15,000—which is below the poverty line for a family of two, let alone a family of four. A minimum-wage employee is poor enough to qualify for food stamps and, in most states, Medicaid. Adjusted for inflation, the federal minimum is roughly the same as in the 1960s and 1970s, despite significant increases in average living standards over that period. The United States currently has the lowest minimum wage, as a proportion of its average wage, of any advanced economy, contributing to today’s soaring levels of inequality. At first glance, it seems that raising the minimum wage would be a good way to combat poverty.

The argument against increasing the minimum wage often relies on what I call “economism”—the misleading application of basic lessons from Economics 101 to real-world problems, creating the illusion of consensus and reducing a complex topic to a simple, open-and-shut case. According to economism, a pair of supply and demand curves proves that a minimum wage increases unemployment and hurts exactly the low-wage workers it is supposed to help. The argument goes like this: Low-skilled labor is bought and sold in a market, just like any good or service, and its price should be set by supply and demand. A minimum wage, however, upsets this happy equilibrium because it sets a price floor in the market for labor. If it is below the natural wage rate, then nothing changes. But if the minimum (say, $7.25 an hour) is above the natural wage (say, $6 per hour), it distorts the market. More people want jobs at $7.25 than at $6, but companies want to hire fewer employees. The result: more unemployment.

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I could write a lot about this. For now let’s just say that the lack of virtually any discussion of energy shows just how poor a field economics is. One other thing: one must at least bring to the table that the 2nd law of thermodynamics contradicts the very term ‘sustainable’.

Economics, Society, And The Environment (EI)

A common view of some is that the relationship between economics and the environment is that environmental considerations are “externalities” for economic systems. In other words, effects produced by economic activity in the environment result from a limited overlap between the economic “system” and the environment, such as the diagram shown (from Giddings, Hopewood and O’Brien): The diagram above is adopted by some to describe the fields of enivonmental economics and environmental science. EnviromentalScience.org describes their discipline: “Environmental economics is an area of economics dealing with the relationship between the economy and the environment. Environmental economists study the economics of natural resources from both sides – their extraction and use, and the waste products returned to the environment. They also study how economic incentives hurt or help the environment, and how they can be used to create sustainable policies and environmental solutions.”

This seems a resonable description. But the accompanying diagram indicates a lack of understanding of the scope of the field. Giddings, Hopewood and O’Brien point out the logical shortcomings of the traditional concept above, and suggest a more correct way of conceptualizing the relationships: “A more accurate presentation of the relationship between society, economy and environment than the usual three rings is of the economy nested within society, which in turn is nested within the environment (Figure 2). Placing the economy in the centre does not mean that it should be seen as the hub around which the other sectors and activities revolve. Rather it is a subset of the others and is dependent upon them. Human society depends on environment although in contrast the environment would continue without society (Lovelock, 1988). The economy depends on society and the environment although society for many people did and still does (although under siege) exist without the economy.”

The importance of recognizing that all of society is a subset of functions within the environment is that society cannot violate the proven physical laws of the physical world (actually universe, but we will return to that thought later). Likewise, the economy exists totally within society so economics must also obey the same physical laws. Steve Keen has argued that the forgotten parameter in economics is energy. Whereas economists develop models and theories based on labor and capital as the components of production, energy should also be explicitly defined as separate and co-variant with labor and capital. Keen argues that failure to do so has led economists to propose models and theories which violate the fundamental laws of our environment, the Laws of Thermodynamics.

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This will not end well.

Turkish Parliament Approves Constitutional Reform, Expanded Powers For Erdogan

In a night-long session, lawmakers voted in favor of a set of amendments presented by the ruling Justice and Development Party (AKP), which was founded by current President Recep Tayyip Erdogan in 2003. The reform bill is designed to widen Erdogan’s powers, who presently only occupies a largely ceremonial role. The bill cleared the minimum parliamentary threshold necessary to put the measures to a national referendum for final approval, which could be held as early as in the spring. The vote took place with 488 lawmakers out of the 550-seat assembly in attendance. A total of 339 parliamentarians voted in favor of the motion and 142 against it, while five cast empty ballots and two of the votes were ruled out as invalid.

The measure required at least 330 votes to be approved and be put forward to a plebiscite. Some of the lawmakers not attending the vote were absent on account of remaining in detention; as part of a wide-ranging purge on dissidents Turkey has detained opposition HDP politicians, whom it accuses of having ties to the outlawed Kurdistan Workers’ Party (PKK). Turkish Prime Minister Binali Yildirim celebrated the result saying “we are now entrusting this to the people, its actual owners. Now it’s the people’s word. It is the people’s decision.” Critics, however, say the amendments will weaken checks and balances in Turkey’s democracy, leading to too much power being consolidated in the office of the president.

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More detail; looks Google translated, but may just be poorly written.

With New Constitution, Erdogan Eyes For One-Man Rule (GP)

The Turkish Republic is on the throes of a radical transformation, even regime change, as Parliament completed 2nd round of voting 18-article constitutional reform bill, which gives expanded powers to President Recep Tayyip Erdogan in a way that removes last vestiges of separation of powers. While the world watch inauguration ceremony of U.S. President Donald J. Trump, Turkish Parliament paved way for a referendum to significantly expand powers of Mr. Erdogan, the president’s long-held political ambition. The breathtaking speed of the first round vote was a clear-cut indication of a strong will on behalf of government and its ardent backer, opposition Nationalist Movement Party (MHP) to quickly push through the controversial package.

The vote reflected the emergence of a new alignment in the Turkish political landscape, formation of an Islamist-nationalist front that harbor similar views on a number of political issues concerning the fate of the country. While the first round of voting was a scene of brawls among men, the 2nd round was women’s turn. The fighting among differing factions in Parliament reflected the deep divide the voting created in the society, with critics blasting the government for transforming the country’s regime from a parliamentary democracy into a the rule of a strongman. Aylin Nazliaka, an independent lawmaker, handcuffed herself to the rostrum to protest the voting, prompting a scuffle that hospitalized several female lawmakers. What constitutional bill brings to Turkey is at the core of ensuing debates amid ongoing emergency rule that rendered free discussion of the proposed changes in public sphere near impossible.

While dozens of national TV channels live aired Mr. Erdogan’s address to village administrators in the presidential palace a few days ago, almost no TV station broadcasted the parliamentary session where lawmakers squabbling over momentous decisions that have the power of shattering roots of the republic’s established system. A CHP lawmaker set his own “studio” in Parliament to bypass the censorship. For supporters of the bill, the shift to executive presidency long sought by President Erdogan will provide a bulwark against return to fragile coalition governments of the past. But for the critics of the proposal, it will cement Erdogan’s power and turn Turkey into a dictatorship with scrapping checks and balances, regarded as central pillars of any democratic system. Main opposition CHP says the new scheme will create one-man dictatorship.

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Not sure that reporting “data show that the net wealth per adult Greek inhabitant amounted to €114,000 in 2009” helps. Let alone that it’s correct.

Greek Have Lost Wealth Worth One Year’s GDP Since 2009 (Kath.)

The wealth of Greeks shrank by €167 billion during the years of the financial crisis – i.e. almost one year’s GDP – according to a survey by Credit Suisse included in the weekly bulletin of the Hellenic Federation of Enterprises (SEV). The Swiss bank estimates the net wealth of Greeks – that is with their loans deducted – at €856 billion, against €1,023 billion in 2009, just before the country entered the bailout process.The data show that the net wealth per adult Greek inhabitant amounted to €114,000 in 2009, while in the rest of Europe it came to €93,000 per adult inhabitant. According to SEV, what puts Greece in a different category to the rest of Europe is the excessive borrowing.

SEV stresses that what is not obvious in the data on the fortune of Greek people and is not sufficiently presented is the huge deficits of the local social security system that will continue to absorb considerable resources in the future, putting a lid on the country’s growth unless tackled sufficiently. In practice, the older generations have not just borrowed from the savings of fellow Europeans, but also from the future savings of their children.

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Jan 182017
 
 January 18, 2017  Posted by at 3:31 pm Finance Tagged with: , , , , , , , , ,  13 Responses »
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René Magritte The Art of Conversation 1963

Sometimes you best fight fire with fire. This knowledge goes back to the advent of agriculture. Australian aboriginees have used it since as long as their stories of dream time can remember. For Native Americans it was an essential part of their lives. These days, we need Trump to fight the fire of an elite class world power that is a threat to all of us.

Be stirring as the time; be fire with fire;
Threaten the threatener and outface the brow
Of bragging horror

Shapespeare: King John, 1595

Been greatly enjoying Donald Trump’s pair of interviews with the European press this weekend, in the shape of German scandal paper Bild’s chief, very-right Kai Diekmann, and disgraced Brexiteer Michael Gove for the Sunday Times. What a pair of choices, by the way, what’s next, a Russian interview conducted by Zhirinovsky?. Who picked those clowns? Let’s just hope it was the Trump campaign.

Enjoying it not in the least because Trump is right in just about everything he says. At least, as per what we at the Automatic Earth have been saying about some of the topics involved all along. And we’re not Trump fans, we just think the others are more wrong than he is, and that it’s high time to abolish the EU, and NATO, and sure, the CIA too.

Speaking of which: Chuck Shumer has made it all the way to Senate leader for the Democrats, right? And then he says about Trump’s criticism of US intel and the Steele ‘report’:

“Let me tell you: You take on the intelligence community, they have six ways from Sunday at getting back at you. For a practical, supposedly hard-nosed businessman, he’s being really dumb to do this.”

Want to take any of that back, Chuck? While you still can? Because, you know, threatening the president-elect with the might of the CIA, what does that say about your view of who actually rules the country, Charlie? That’s not a gaffe, that’s what would in America’s better days have been a career buster, buster. But your own rudderless party won’t call you on it, and Trump would love for you to keep your seat; one less worry. Still, c’mon, you just can’t say sh*t like that. It’s beyond any pale. Or, you know, it once was.

What did Trump get right? Here’s what. First, NATO should not exist anymore, since as we’ve said 1000 times, and Ron Paul said 10 times more, it’s merely a hammer looking for a nail, having turned for the purpose, since the dissolution of the Soviet Union, from a defensive collaboration into the planet’s worst aggressor. The 1000s of additional US troops gathered at or close to the Russian border recently are more than plenty evidence of that.

Trump wants far fewer nukes on the planet, and proposes to negotiate a deal with Russia to achieve that goal. Ergo, 30 years after Reagan met Gorbachev in Reykjavik to accomplish just that, Trump must meet Putin in that same spot to do it all over again?! That’s the legacy of NATO. It would be mighty symbolic, though we might want to remember the 1972 Spasski-Bobby Fisher chess ‘world cup’ there, and the American’s paranoia at the time. Not a good example. But they’ll meet someplace, for sure.

Second, Trump likes Brexit. So do we. Beautiful Brexit. Because it is a preliminary step towards the dissolution of the EU, which, as Trump very correctly remarks, has degenerated into a “vehicle for Germany” to compete with the US as a global trading force.

And of course Germany would deny this. After all, didn’t the notorious FinMin Schäuble say -again- just a few days ago that Europe’s problem is not Germany’s surplus, but the weakness of other nations? This week, German foreign ministry spokesman Martin Schäfer added:“For the German government, Europe has never been a means to an end, but a community of fate which, in times of collapsing old orders, is more important than ever.” A community of ‘fate’? An ‘old order’ vs a ‘new order’? Are we taking notes?

Anyway, this is cheap quatsch as long as a huge part of Germany’s surplus comes from its trade with co-EU nations. Because in that scenario, there’s only so much surplus to go around, and the rest will all of necessity run deficits. If that is hard to understand, let’s dive up these stats again, and close that discussion once and for all:

 

 

The EU very much IS a vehicle for Germany, and it eats people alive. That has nothing to do with Germany taking in immigrants, it has to do with economic and power policies, with the destruction of Greece and Italy. The structure of the EU makes it possible, inevitable even, that the strongest partner forces all the others to do its will. That really is all you need to know about why the EU is doomed to failure. All the rest is just about describing the process of how that failure unfolds.

Setting and keeping the euro at a rate that is beneficial to Germany condemns poorer EU nations to ever deeper poverty. That’s what those numbers say. And if anyone thinks Schäuble is not aware of either the numbers or the principle itself, get help. Merkel and Schäuble have been elected to represent Germans, but then they wind up making decisions for 400 million other people, who are the victims of the very policies that benefit Germany. There’s nothing difficult about it.

‘Community of Fate’.. Let’s just hope something was lost in translation there. Point is, Trump is right on the money, and he’s about the first person to put it as simply and poignantly as that. The EU is a vehicle for trade domination. It’s a means for Germany and Holland to acquire access to a huge market for their products, free of just about any trade restrictions. Promoted with the flogged dead horse of the ‘tide that lifts all boats’. It does no such thing.

Other than times of open warfare, for countries like Greece and Italy the EU is the worst thing that ever happened to them in a long time. Brussels stands for economic warfare labeled as a unifying force for peace. It’s a blatant lie wrapped in sheep’s clothing. And of course more nations will want to get out, they’d be crazy not to.

Which is what’s so painfully missing from all the Brexit talk in the UK: everyone goes with the idea that the EU will continue to exist as is, just without Britain. The chance of others leaving, and the effect that will have on the ‘Union’, is never discussed. Though it might put the exit from it in a whole different light, politically and especially economically.

German Vice-Chancellor en Economy Minister Sigmar Gabriel puts his foot in his mouth in much the same way Schumer does, in a reaction to Trump’s interviews. As Tyler Durden describes Gabriel’s ‘Trump shock’:

Responding to Trump’s comments that Merkel had made an “utterly catastrophic mistake by letting all these illegals into the country”, Gabriel said the increase in the number of people fleeing the Middle East to seek asylum in Europe had partially been a result of US-led wars destabilising the region.

Slamming US foreign policy – and thus the Obama regime, not to mention Angela Merkel’s close friend Hillary Clinton – as a culprit for the European refugee crisis, Gabriel said that “there is a link between America’s flawed interventionist policy, especially the Iraq war, and the refugee crisis, that’s why my advice would be that we shouldn’t tell each other what we have done right or wrong, but that we look into establishing peace in that region and do everything to make sure people can find a home there again,” Gabriel said.

First, if you are against America’s deeply flawed and ‘deeply deadly’ regime change policies of the last few decades, as Gabriel pretends to be, you should be pro-Trump, because the man who will be the next US president a little over 50 hours from now is not only of the same opinion, he will be in a position to do something about it. And while you’re at it, why not tell us of all the heroics Merkel has performed over the past decade of her reign, to make it stop?

And do yourself one better: describe in detail the role your EU partners France and Britain have played in these failures. In which untold trillions were spent and untold millions of lives lost, but in which the arms industries of these nations, and certainly Germany’s too, have made mind-boggling profits. Once you’ve done all that, Mr. Gabriel, feel free to criticize the 45th president of the United States.

“In that area Germany and Europe are already making enormous achievements – and that’s why I also thought it wasn’t right to talk about defence spending, where Mr Trump says we are spending too little to finance Nato. We are making gigantic financial contributions to refugee shelters in the region, and these are also the results of US interventionist policy.” Gabriel, who will likely run as the centre-left candidate against Merkel in Germany’s federal elections in September, said Trump’s election should encourage Europeans to stand up for themselves.

Here is where Gabriel’s foot enters his mouth:

“On the one hand, Trump is an elected president. When he is in office, we will have to work with him and his government – respect for a democratic election alone demands that,” Gabriel said. “On the other hand, you need to have enough self-confidence. This isn’t about making ourselves submissive.

What he says about trade issues, how he might treat German carmakers, the question about Nato, his view on the European Union – all these require a self-confident position, not just on behalf of us Germans but all Europeans. We are not inferior to him, we have something to bring to the table too. “Especially in this phase in which Europe is rather weak, we will have to pull ourselves together and act with self-confidence and stand up for our own interests.”

If that is your idea of exuding confidence, of being and/or appearing strong, Trump will have you for breakfast. “in this phase in which Europe is rather weak, we will have to pull ourselves together” , “you need to have enough self-confidence. This isn’t about making ourselves submissive.” Or how about some genuine pouting: “We are not inferior to him, we have something to bring to the table too.”

No, Mr. Gabriel is not the horse you want to place your bets on. He’s a left wing leader sitting in a government with right wing Merkel, in the kind of flawed consensus model that haunts both the EU and its member states, leaving large groups of people without anyone addressing their issues. This is where ‘populists’ are born. In the US, it gave us Trump.

Gabriel is just one of many who are all wedded to the broken Obama/Merkel/Hillary ideal, financed by a deep state class that profits greatly from the fake notion that what is good for the rich is also good for the poor. Should have given them bread and circuses, guys.

Jan 132017
 
 January 13, 2017  Posted by at 4:45 pm Finance Tagged with: , , , , , , ,  12 Responses »
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Rene Burri Alexandria Egypt 1962

2016 brought a lot of changes, or rather, brought them to light. In reality, the world has been changing for many years, but many prominent actors benefitted from the changes remaining hidden. Simply because their wealth and power and worldviews are better served that way.

It’s entirely unclear whether we will ever get a chance to see to what extent the efforts to hide developments have been successful, or even been perpetrated at all, because we don’t know to what extent truth and reality will be accessible in the future.

What we can say at this point in time is that the changes 2016 delivered were urgently needed. There are many people out there who just want to turn back the clock, and change everything back to how it was, but they can’t, and that’s a good thing, because the way things were was hurting too many people.

2016 will go down in history as the year when a big divide between groups of people in the western world became visible, a divide that had until then been papered over by real or imaginary wealth, as well as by ignorance and denial.

When politics and media conspire to paint for the public a picture of their choosing, they can be very successful, especially if that picture is what people very much wish to see, true or not. But as we’ve seen recently, our traditional media have become completely useless when it comes to reporting news; the vast majority have switched to reporting their own opinions and pretending that is news.

On the one hand, there is a segment of society that either has noticed no changes, or is so desperate to hold on to what they have left, that they resist seeing them. On the other hand, there are those who feel left behind by that first group, and by the idea that the world that is still functioning and even doing well.

The first group has been captivated by, and believed in, the incessantly promoted message of recovery from an economic, financial and gradually also political crisis. The second see in their lives and that of their friends and neighbors that this recovery is an illusion.

It’s like the old saying goes: you can’t fool all of the people all of the time. And that’s why you have Brexit and Trump and why you’re going to have much more of that, certainly across Europe. Things are not going well, and there is no recovery, for a large enough percentage of people that their votes and voices now swing the debates and elections.

It’s not even complicated. This week there was a report from Elevate’s Center for the New Middle Class that concluded that half of Americans, 160 million people, can’t afford to have a broken arm treated (at $1,400). And sure, you can say that perhaps that number is a bit too high, but there have been many such reports, that for instance say the majority of Americans have less than $1000 in savings, and can’t even afford a car repair.

In Britain numbers are not much different. Over the past decade, the country has been very busy creating an entire new underclass. If your economy is not doing well, and your answer to that is budget cuts and austerity, it’s inevitable that this happens, that you create some kind of two-tier or three-tier society. And then come election time, you run the risk of losing.

Both Britain and the US boast low unemployment numbers, but as soon as you lift the veil, what you see is low participation rates, low wages and huge numbers of part-time jobs stripped of all the benefits a job used to guarantee. It allows those who still sit pretty to continue doing that, but it’ll come right back to haunt you if you don’t turn it around, and fast enough.

For many people, Obama, Merkel, Cameron and the EU cabal have been disasters. For too many, as we now know. That doesn’t mean that Trump will fix the economic problems, but that’s not the issue. People have voted for anything but more of the same. Which in Britain they’re not even getting either, so expect more mayhem there.

In most places, some variety of right wing alternative is the only option available that is far enough removed from ‘more of the same’. Moreover, many if not most incumbent parties are in a deep identity crisis. Trump did away with the Republicans AND the Democrats, and they had better understand why that is, or they’ll be wholly irrelevant soon.

In Britain, the most important votes in many decades was lost by the Tories, who subsequently performed a musical chairs act and stayed in power. You lost! Losers are not supposed to stay in power! But the other guys are all too busy infighting to notice.

That identity crisis, by the way, is not a new thing. If you look across the western political spectrum, there are all these left wing and right wing parties happily working together, either in coalition governments or through other ‘productive’ forms of cooperation. So who are people going to vote for when they’re unhappy with what they’ve got? Where is that ‘change’ that they want? Not on the traditional left or right.

So you get Podemos and M5S and Trump and UKIP and Le Pen. It’s not their fault, or the voters’ fault, it’s the political establishment that has tricked itself into believing in the same illusion it’s been promoting to voters.

And yes, they have now proven that it’s possible to stave off, for a number of years, a deeper crisis, depression, by borrowing and printing ‘money’. Especially if you can at the same time hit the poorest in your society with impunity.

But in the end no amount of fake or false news on the economic front will allow you to continue the facade for too long, because people know when they can’t afford things anymore. The evidence here is somewhat more direct than with regards to political fake news, though they may well both follow the same pattern of ‘discovery’.

Our societies are still run as if there is no real crisis, as if it’s all just a temporary glitch, as if the incumbent models function just fine, and as if recovery is just around the corner. And we can make it look as if that is true, but only for an ever smaller amount of time, and for an ever smaller amount of people.

The basic issue here is not a political one. It’s economic. Our economic systems have failed, and they can’t be repaired. We should always have realized that no growth is forever, but at least we now know. Or could know, it’ll take a while to sink in.

Next up is a redo and revamp of those economic systems, but that is not going to be easy, and may not get done at all. The resistance may be too strong, warfare -economic or physical- may seem like a way out, there are many unknowns. We could, ironically, get quite far in that redo if we simply cut all the waste for our economic processes, but then again, that would have us find out that much of the system runs entirely on wasting stuff, and wasting less kills the system.

However that may be, and however it may turn out, this is where we find ourselves. Protesting Trump and Brexit is inevitable, but it doesn’t address any core issues. From a purely economic point of view, Obama failed spectacularly, as did David Cameron, as does Angela Merkel. And as do, we will find out in 2017, many other incumbent ‘leaders’.

Their successors, whatever political colors they may come from, will all come to power promising, and subsequently attempting, to restart growth. Which is no longer feasible across an entire country, or even if it were, it would mean squeezing other countries. With corresponding risks.

Trump and Brexit are necessary, perhaps even long overdue, in order to break the illusion that things could go on as they were. But they are not solutions. America needs a big wake-up. Trump looks likely to deliver one. That is needed for the rest of the country to wake from its slumber. Ask yourself: are you going to get weaker from dealing with a Trump presidency? Maybe not the best question, or at least not before having asked: do you know how weak you are right now?

For Britain to leave the EU is a great first step. As I’ve said many times, centralization is not an option without growth. And Brussels has shown us quite a few of the worst consequences of centralization. Nobody should want to be a part of that.

Summarized: for most people, 2017 will be the year of the inability to understand where their favorite worldview flew off the rails. Change can be a bitch. But change is needed to keep life alive.

Jan 132017
 
 January 13, 2017  Posted by at 10:28 am Finance Tagged with: , , , , , , , , , , ,  4 Responses »
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Edgar Degas Dancers in Blue 1895


Assange Agrees To Extradition If US Releases Chelsea Manning (AFP)
China Posts Worst Export Fall Since 2009 As Fears Of US Trade War Loom (R.)
Fiat Chrysler Shares Plunge 13% After EPA Cheat Software Accusation (CNBC)
Wages For Lowest-Paid UK Men Have Been Stagnant For Two Decades (Ind.)
Abolish Central Banks And Slay The Zombies (Planet Ponzi)
WHO Warns Of Outbreak Of Virulent New ‘Economic Reality’ Virus (Steve Keen)
The Utter Stupidity Of The New Cold War (SCF)
Obama’s “Farewell To Arms” As War Presidency Ends (SCF)
Massive Security Preparations Under Way For Inauguration (Fox)
Germany’s Schaeuble Urges ECB To Start Unwinding Stimulus This Year (CNBC)
Germany To Return New Asylum Seekers To Greece From March (AFP)
Greece’s Healthcare System: Train Wreck In Slow Motion (Occupy)
Weitergeleiteter Spendenaufruf für Griechenland (Das Gelbe Forum)

 

 

What does it say about us if our best and brightest feel compelled to sacrifice themselves? Where is this going to leave us? Where would we be without Assange, Snowden and Manning? Certainly not in a better place.

Assange Agrees To Extradition If US Releases Chelsea Manning (AFP)

WikiLeaks founder Julian Assange will agree to be extradited to the United States if President Barack Obama grants clemency to the former US soldier Chelsea Manning, jailed for leaking documents, the company said on Thursday. “If Obama grants Manning clemency Assange will agree to US extradition despite clear unconstitutionality of DoJ (US Department of Justice) case,” WikiLeaks wrote on Twitter. Assange has been living in the Ecuadoran embassy in London since June 2012 to avoid extradition to Sweden to face sexual assault allegations. The Australian former computer hacker said he fears Stockholm will in turn extradite him to the US, where he angered Washington over WikiLeaks’ publication of thousands of US military and diplomatic documents leaked by former US soldier Manning.

Manning is currently serving a 35-year sentence in solitary confinement for handing over the 700,000 sensitive documents from the US State Department. Supporters of the transgender soldier are putting their hopes in a pardon by Obama before he leaves office later this month, although the White House has said the president will not be granting her clemency. Manning has already made two suicide attempts and currently has an appeal pending before a military court. Washington has maintained the threat of prosecuting Assange over the 2010 leak, though no charges have been filed. WikiLeaks’ post on Twitter was accompanied by a letter addressed to US Attorney General Loretta Lynch, in which Assange’s lawyer Barry Pollack argues there is no legitimate basis for continuing the investigation into the WikiLeaks founder.

Read more …

“The trend of anti-globalization is becoming increasingly evident, and China is the biggest victim of this trend..”

China Posts Worst Export Fall Since 2009 As Fears Of US Trade War Loom (R.)

China’s massive export engine sputtered for the second year in a row in 2016, with shipments falling in the face of persistently weak global demand and officials voicing fears of a trade war with the United States that is clouding the outlook for 2017. In one week, China’s leaders will see if President-elect Donald Trump makes good on a campaign pledge to brand Beijing a currency manipulator on his first day in office, and starts to follow up on a threat to slap high tariffs on Chinese goods. Even if the Trump administration takes no concrete action immediately, analysts say the specter of deteriorating U.S.-China trade and political ties is likely to weigh on the confidence of exporters and investors worldwide.

The world’s largest trading nation posted gloomy data on Friday, with 2016 exports falling 7.7% and imports down 5.5%. The export drop was the second annual decline in a row and the worst since the depths of the global crisis in 2009. It will be tough for foreign trade to improve this year, especially if the inauguration of Trump and other major political changes limit the growth of China’s exports due to greater protectionist measures, the country’s customs agency said on Friday. “The trend of anti-globalization is becoming increasingly evident, and China is the biggest victim of this trend,” customs spokesman Huang Songping told reporters. “We will pay close attention to foreign trade policy after Trump is inaugurated president,” Huang said.

China’s trade surplus with the United States was $366 billion in 2015, according to U.S. customs data, which Trump could seize on in a bid to bring Beijing to the negotiating table to press for concessions, economists at Bank of America Merrill Lynch said in a recent research note. A sustained trade surplus of more than $20 billion against the United States is one of three criteria used by the U.S. Treasury to designate another country as a currency manipulator. China is likely to point out that its own data showed the surplus fell to $250.79 billion in 2016 from $260.91 billion in 2015, but that may get short shrift in Washington. “Our worry is that Trump’s stance towards China’s trade could bring about long-term structural weakness in China’s exports,” economists at ANZ said in a note.

Read more …

And now for the rest…

Fiat Chrysler Shares Plunge 13% After EPA Cheat Software Accusation (CNBC)

Shares of Fiat Chrysler fell Thursday after the U.S. Environmental Protection Agency accused the automaker of using software that allowed excess diesel emissions in about 104,000 vehicles. The U.S.-listed shares of Fiat Chrysler plunged as much as 19% Thursday after Reuters first reported the news. The automaker’s stock was briefly halted after the EPA made the announcement. The stock later recovered some of those losses and ended the day about 10% lower. The agency alleged Fiat Chrysler violated the Clean Air Act by installing and failing to disclose “engine management software in light-duty model year 2014, 2015 and 2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks with 3.0 liter diesel engines sold in the United States.”

The undisclosed software results increased nitrogen oxide emissions from the vehicles, the EPA said. The Justice Department is reportedly working with the EPA on this issue. The company could be liable for civil penalties and injunctive relief for the alleged violations, the EPA said. It said it is also investigating whether the auxiliary emission control devices constitute “defeat devices,” which are illegal. On Thursday, Attorney General Eric Schneiderman said in a statement he was deeply troubled by the evidence the EPA presented. “My office was proud to take a leading role in the multi-state investigation of Volkswagen that uncovered flagrant abuses of New York’s environmental laws and, in the case of VW, a culture of corruption that enabled blatantly illegal conduct to persist over many years,” he said.

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Huge move towards part-time work.

Wages For Lowest-Paid UK Men Have Been Stagnant For Two Decades (Ind.)

Pay for the poorest fifth of men has been flat for twenty years, according to a new report for the Institute for Fiscal Studies. At the same time the proportion of this low-paid group working part time, rather than full time, has shot up from 10% to 25% over the same period. The research helps explain what has become something of an inequality puzzle in the UK, in which official headline gauges have shown flat-lining income inequality since the early 1990s and yet there is simultaneously a widespread impression that inequality has been rising strongly.

The IFS research shows that average inflation-adjusted annualised weekly pay growth for the lowest fifth of the male income distribution was zero or less between 1994-95 and 2014-15, while for men further up the income distribution real weekly pay has grown. And while part-time work among the lowest paid men has ballooned, rates have not changed for better paid men. This all means that among working men wage inequality has increased over the past two decades. “The rise in household earnings inequality has been the product of a complex set of interactions between trends in hours and wages for men and women, but it is largely due to a rise in male earnings inequality,” said the IFS report.

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Mitch with the obvious.

Abolish Central Banks And Slay The Zombies (Planet Ponzi)

Have the [BOE]-enabled grotesque bubbles in the bond, stock and property markets or the eight years of “temporary emergency measures” and zero-interest-rate policies created infrastructure investment? Job creation? Savings? No, no and no. It has killed savers, students and seniors while generating record bonuses for chief executives. While earnings may have peaked almost 18 months ago, stock prices keep bubbling and wealth inequality continues to surge to record highs — along with homelessness and underemployment. Will Carney blame Brexit, Putin or Trump for the upcoming problems? Why not? Certainly, extreme valuations enabled by the Bank recklessly allowing debt, credit and leverage to skyrocket out of this universe had nothing to do with the coming collapse — nothing to see here, look away.

It is not only the UK but also global central bank policies that have broken our financial system beyond repair. The world’s oldest bank, Banca Monte dei Paschi di Siena, founded in 1472, is now an insolvent zombie bank thanks to the handiwork of JPMorgan, Deutsche Bank and Nomura. They sold Monte billions of dollars of derivative trades it did not understand. These predictably exploded, leaving the bank bust. JPMorgan, Deutsche and Nomura made a fortune — and Monte’s shareholders and depositors, and EU taxpayers, will get slammed with the massive bailout tab. The new normal is apparently a world of financial fraud where the only rules which apply are too big to fail, bail or jail and too connected to prosecute —steal all you can, while you can, with impunity.

After the financial crisis, I wrote extensively exposing the toxic “culture of fraud” at Deutsche, JPMorgan, Goldman Sachs, RBS, Lloyds and Barclays. So what was done? Can you guess the number of staff at these banks jailed for the numerous frauds committed during the Great Financial Crises? Zero. That’s not capitalism! Capitalism doesn’t have zero accountability or zero transparency. This is ethically, financially and socially wrong. Much of it is also, in my opinion, illegal and should be punished by long jail terms. No need for new regulation — we need to enforce existing rules rather than repeatedly turning a blind eye.

Market manipulation by central banks has destroyed price discovery in every asset class and market. This has crushed the basic concept of capitalism. Central banks now pick winners and losers rather than letting free markets decide. The Swiss National Bank holds $140 billion in stocks, including shares in Apple, Google and Amazon. Valuations, growth projections and normal business cycles are all unnecessary. The central banking bubble factory forces investors to chase yields resulting in zombie corporations and zombie banks that inhibit growth, infrastructure spending and the creation of productive assets.

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‘The WHO therefore recommends complete avoidance of “Reality” as the only effective strategy for those wishing to remain as Mainstream Economists’.

WHO Warns Of Outbreak Of Virulent New ‘Economic Reality’ Virus (Steve Keen)

The WHO today warned of a virulent new virus affecting vulnerable groups in the Mid-West and Eastern USA. The outbreak, which began in the Mid-West’s extensive Great Lakes ‘Freshwater’ river system, has recently jumped the ‘Saltwater’ barrier, meaning that the entire population of its target species – ‘Mainstream’ economists – is now at risk. Speaking on behalf of the WHO, Dr Cahuc explained that the virus works by turning off the one genetic marker that distinguishes this species from the rest of its genus, the Human Race. This is the so-called ‘Milton’ gene (Friedman 1953), which goes dormant in other Humans as they pass through puberty. Its inactivity reduces their imaginative capacity, making it impossible for them to continue believing in such endearing infantile fantasies as the Tooth Fairy and Santa Claus. While regrettable, this drop in imagination is necessary to prepare Humans for the adult phase of their existence.

‘Professor Milton Friedman found a way to re-activate this gene during PhD training, using his “as if” gene splicing technique’, Dr Zylberberg elaborated. ‘This enabled a wonderful outpouring of imaginative beliefs by Mainstream Economists, which gave birth to concepts like NAIRU, Money Neutrality, Rational Expectations, and eventually even DSGE models. This wealth of imagination was regarded by Mainstream Economists as a more than sufficient compensation for returning to the child-like phase of the Human species.’ The Milton gene conferred other advantages on Mainstream Economists, which have been highly important to their success in competition against their rival species, the Heterodox Economists. ‘Being endowed with a child-like nature, the arguments of Mainstream Economists were treated with the low level of critical evaluation that adult humans normally reserve for conversations with their infant stage’, said Dr Cahuc.

‘This made their policy recommendations much more likely to be adopted, instead of the more complicated proposals put forward by their niche rivals’, he said. The new virus – named ‘Reality’ – de-activates the Milton gene once more. ‘Consequently’, Dr Cahuc warned, ‘the very beliefs that define this unique species are at risk. Unless we are very careful, it may become extinct!’. Unfortunately, there is as yet no known cure to this virus. ‘The WHO therefore recommends complete avoidance of “Reality” as the only effective strategy for those wishing to remain as Mainstream Economists’, Dr Cahuc concluded. However, this strategy is made extremely difficult by one cunning characteristic of the Reality virus: after an initial phase of disorientation and distress, its sufferers begin to experience pleasure, and actually want to pass the virus on to others. ‘Its transmission mechanism is a particularly insidious aspect of this disease’, Dr Cahuc lamented.

Read more …

Amen.

The Utter Stupidity Of The New Cold War (SCF)

It seems so strange, twenty-seven years after the fall of the Berlin Wall, to be living through a new Cold War with (as it happens, capitalist) Russia. The Russian president is attacked by the U.S. political class and media as they never attacked Soviet leaders; he is personally vilified as a corrupt, venal dictator, who arrests or assassinates political opponents and dissident journalists, and is hell-bent on the restoration of the USSR. (The latter claim rests largely on Vladimir Putin’s comment that the dissolution of the Soviet Union was a “catastrophe” and “tragedy” – which in many respects it was. The press chooses to ignore his comment that “Anyone who does not miss the Soviet Union has no heart, while anyone who wants to restore it has no brain.” It conflicts with the simple talking-point that Putin misses the imperial Russia of the tsars if not the commissars and, burning with resentment over the west’s triumph in the Cold War, plans to exact revenge through wars of aggression and territorial expansion.)

The U.S. media following its State Department script depicts Russia as an expansionist power. That it can do so, so successfully, such that even rather progressive people—such as those appalled by Trump’s victory who feel inclined to blame it on an external force—believe it, is testimony to the lingering power and utility of the Cold War mindset. The military brass keep reminding us: We are up against an existential threat! One wants to say that this — obviously — makes no sense! Russia is twice the size of the U.S. with half its population. Its foreign bases can be counted on two hands. The U.S. has 800 or so bases abroad. Russia’s military budget is 14% of the U.S. figure. It does not claim to be the exceptional nation appointed by God to preserve “security” on its terms anywhere on the globe.

Since the dissolution of the USSR in 1991, the U.S. has waged war (sometimes creating new client-states) in Bosnia (1994-5), Serbia (1999), Afghanistan (2001- ), Iraq (2003- ), Libya (2011), and Syria (2014- ), while raining down drone strikes from Pakistan to Yemen to North Africa. These wars-based-on-lies have produced hundreds of thousands of civilian deaths, millions of refugees, and general ongoing catastrophe throughout the “Greater Middle East.” There is no understating their evil. The U.S. heads an expanding military alliance formed in 1949 to confront the Soviet Union and global communism in general. Its raison d’être has been dead for many years. Yet it has expanded from 16 to 28 members since 1999, and new members Estonia and Latvia share borders with Russia. (Imagine the Warsaw Pact expanding to include Mexico. But no, the Warsaw Pact of the USSR and six European allies was dissolved 26 years ago in the idealistic expectation that NATO would follow in a new era of cooperation and peace.)

And this NATO alliance, in theory designed to defend the North Atlantic, was only first deployed after the long (and peaceful) first Cold War, in what had been neutral Yugoslavia (never a member of either the Warsaw Pact nor NATO), Afghanistan (over 3000 miles from the North Atlantic), and the North African country of Libya. Last summer NATO held its most massive military drills since the collapse of the Soviet Union, involving 31,000 troops in Poland, rehearsing war with Russia. (The German foreign minister Frank-Walter Steinmeier actually criticized this exercise as “warmongering.”)

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it’s time to let this sink in. Tearful goodbyes or not.

Obama’s “Farewell To Arms” As War Presidency Ends (SCF)

Eight straight years of warmongering come to an end as US President Barack Obama bows out with his «farewell to the nation» speech this week, as fawning American media dubbed his valediction. In reality, Obama’s outgoing address should have been billed as a «farewell to arms» made by arguably one of the most belligerent presidents to ever have occupied the White House. Only in exceptionally delusional America could such a pernicious paradox be presented as something honorable and sentimental. Obama, the 44th US president, may have been the first black president and winner of a Nobel peace prize during his first year in office in 2009. But apart from those dubious accolades – championed by supposedly liberal Hollywood celebrities and media pundits – his actual record in office is one of blood-soaked disgrace.

Instead of ending American overseas wars as he had promised back in 2008, Obama expanded on his predecessor George W Bush’s criminal foreign interventions. At least seven countries – Iraq, Afghanistan, Pakistan, Libya, Syria, Yemen and Somalia – have been routinely bombed under Obama’s watch as the US Commander-in-Chief. That’s one repugnant record. Last year alone, the US military reportedly dropped over 26,000 bombs around the world killing countless thousands of people, the exact number buried under official secrecy and American mainstream media indifference. At that rate, American anti-war campaigner Medea Benjamin estimates that US forces deployed three bombs every hour of every day for the whole of 2016. This death from the skies included Obama’s personal ordering of drone assassinations during his weekly Terror Tuesday briefings from Pentagon chiefs, the use of which increased 10-fold under his command, killing thousands of innocent civilians as «collateral damage».

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Could be quite the party.

Massive Security Preparations Under Way For Inauguration (Fox)

The stage is set for President-elect Donald Trump’s inauguration – not just the traditional swearing-in platform on Capitol Hill, but a massive security presence amid protest plans to “shut down” the nation’s capital. Most crowd estimates for the Jan. 20 festivities are far short of the record-setting 1.8 million visitors for President Obama’s historic 2009 inauguration. But the throngs of spectators and protesters alike are enough to create transit, security and hospitality challenges. “Security is my greatest concern,” Missouri GOP Sen. Roy Blunt, chairman of the Joint Congressional Committee on Inaugural Ceremonies, recently said. “No question that on inaugural day, this would be the most appealing target in the world.” He suggested the city could have as many as 750,000 demonstrators alone.

More than three-dozen law enforcement agencies are working together on security and safety plans in anticipation, including the Capitol Police, FBI, Secret Service and National Guard. Roughly 7,500 Guardsmen from across the country will come to Washington, along with about 3,000 police officers from various states, with the Secret Service taking the lead on security. Essentially everybody involved already is rehearsing for the big weekend, which kicks off next Friday morning with the swearings-in on the Capitol’s West Front, followed by official events including the traditional parade on Pennsylvania Avenue to the White House and the inaugural balls. The Joint Task Force – National Capital Region – 58th Presidential Inauguration has held several “table top” sessions in which agencies plot strategy over a large-scale, three-dimensional map.

“It’s a rehearsal, but in the military we call it a drill,” Navy Cmdr. Jonathan Blyth, the group’s spokesman, told FoxNews.com on Wednesday. “We’ve been preparing for this since the last inauguration. We’re focused to protecting and honoring a new commander in chief.” The task force and its Capitol Hill counterpart are holding a “dress rehearsal” this weekend for the swearings-in, the Presidential Review of troops and the parade along the roughly 2.5-mile stretch of Pennsylvania Avenue. Several protest groups planning large-scale demonstrations have permits in place and have already held organizational meetings, among them the collaborative DisruptJ20. “We’re planning a series of massive, direct actions that will shut down the inauguration ceremonies and any related celebrations,” the group says. “We’re also planning to paralyze the city.”

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“Schaeuble and other German lawmakers have warned the ECB risks fuelling support for eurosceptic parties..” No, it’s Schaeuble who fuels that support.

Germany’s Schaeuble Urges ECB To Start Unwinding Stimulus This Year (CNBC)

The ECB should start unwinding its ultra-loose monetary policy this year, German Finance Minister Wolfgang Schaeuble said in an interview to be published on Friday, adding that it would not be easy. “The ECB will have the tough task of getting out of the ultra-expansionary monetary policy,” Schaeuble told the Sueddeutsche Zeitung newspaper. “It would presumably be right if the ECB dared to exit this year”. Schaeuble added it was “possible and necessary” for the next government to lower taxes after Germany’s general election in September. He said forecasts that inflation could reach 3% in Germany this year would exacerbate concerns about current low interest rates. While admitting he was no fan of the ECB’s monetary policy, he added, “The ECB has a mandate for the eurozone, and it carries it out well.”

Schaeuble said the core issue was that a number of eurozone countries had not been able to boost competitiveness as required. “The problem is the weakness of the other countries, not Germany’s strength,” he said. The conservative minister said it would take a great effort to convince German citizens that the common currency provided more employment, social and business benefits than risks and negative consequences. To help Germany make the argument, he said it was essential that Italy and other countries stuck to the agreed rules. Schaeuble’s deputy Jens Spahn told Reuters last week that a “prudent start to the exit” of the ECB’s expansive monetary policy was desirable. The ECB aims for inflation of just under 2%, but it has undershot its target for years. To fight off deflation, the central bank has cut interest rates to zero and launched a massive but controversial bond-buying programme. Schaeuble and other German lawmakers have warned the ECB risks fuelling support for eurosceptic parties if it does not change course soon.

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There are new lows to be achieved out there. But go ahead, this too will make the EU crumble.

Germany To Return New Asylum Seekers To Greece From March (AFP)

Germany will begin returning asylum seekers to Greece from mid-March, an interior ministry spokesman told AFP on Thursday, essentially lifting a five-year suspension on such transfers because of poor conditions there. Under the EU’s so-called Dublin rules, would-be refugees must file for asylum in the first member-state of the bloc they enter, often the Mediterranean nations of Greece and Italy. If asylum seekers have travelled on to other EU nations, they are to be returned to their first port of call. But that requirement had been halted for Greece, which together with Italy has been the main point of entry for the more than one million immigrants who have entered the bloc since 2015 fleeing war and poverty in the Middle East and Africa.

A German interior ministry spokesman told AFP that Germany would reinstate the Dublin rule in two months’ time and return newly arrived asylum seekers to their first EU port of call. “In line with the recommendation from the European Commission, Germany believes that such transfers will be possible from March 15th,” said the spokesman, Tobias Plate. The EU recommended on December 8th that member states resume sending asylum seekers back to Greece from March next year, after such transfers were halted since 2011. Athens has criticized the EU’s assessment, with Migration Minister Yannis Mouzalas saying the current legal framework was “unable to respond to the historic migration flows and leaves the burden to the member states that migrants first arrive in”.

German refugee relief group Pro Asyl has also raised concerns, warning that the measure would put the asylum system in Greece, a country still recovering from a deep debt and economic crisis, under further pressure. Photos of refugees living in tents amid heavy snowfall in Greece caused outrage recently, and the European Commission on Monday called such conditions “untenable”.

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This is just too sad.

Greece’s Healthcare System: Train Wreck In Slow Motion (Occupy)

In 2014, the Greek health department cut off its cancer screening prevention program, despite a number of warnings issued by professionals both within the country and abroad that such an action would lead to an explosion in otherwise preventable cases turning serious. According to a statement by Evgenia Thanou, general manager for Doctors of the World, “There are people with tumors who can’t afford the cost of chemotherapy, which costs €2,500 for a single dose. As a result there are people who have died because they have not been able to get the correct treatment from the point of diagnosis.” The rationale was that the budget cutbacks, in the range of 55%, would only take place on a short term basis, just long enough to allow for the country to recuperate from recently imposed austerity measures.

Charges for outpatient visits were also increased by 50% per visit, and almost 200 medicines were de-stocked by pharmacies. A further consequence was the artificial drug shortage, caused by companies like Novo Nordisk, which halted insulin shipments to Greece unless the retail prices were raised in a supposed effort to curb hoarding and black market export by professionals. Almost three years later, this policy is still in effect. The result was the gradual closure of 850 medical clinics, both in the capital Athens as well as in the countryside. Ten thousand beds have been shut down across the country, and 30,000 healthcare professionals removed from frontline positions. Those who remained saw their wages cut by at least 50%.

Among 11 hospitals that have shut down, three are psychiatric while the rest include rural clinics in remote parts of the country, leaving locals without access to a professional in the event of an emergency. The crisis led to the creation of numerous volunteer healthcare organizations in 2015, but their contributions couldn’t put a dent in the number of patients unable to afford any healthcare options. That same year saw the mass migration of thousands of recently graduated or established Greek healthcare professionals across Europe, with almost 4,000 headed for Germany and the Nordic countries seeking steadier employment in a more welcoming professional environment. The results of the brain drain haven’t yet been entirely felt, but experts agree the long-term effects could cripple the country’s prospects for decades to come.

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Taking my Automatic Earth for Athens fund directly to Germany.

Weitergeleiteter Spendenaufruf für Griechenland (Das Gelbe Forum)

Raul Ilargi Meijer von The Automatic Earth ist wieder in Athen und versucht, die schwierigen Bedingungen zu erleichtern, die in Griechenland bestehen. Die Aufmerksamkeit der Medien und der Welt ist abgelenkt, obwohl sich selbst diese Bedingungen zunehmend verschlechtern. Akute Probleme ziehen kollektive Aufmerksamkeit an, chronische aber leider nicht. Griechenland steckt tief in volkswirtschaftlicher Depression mit ausgewachsenem Liquiditätsengpass, Kapitalkontrollen, Massenarbeitslosigkeit, fehlender medizinischer Versorgung, Hungerepidemien und vielen anderen Schwierigkeiten.

Die von außen bereitgestellten Resourcen fließen zum größten Teil durch offizielle Kanäle, aber die Körperschaften, die mit der Auslieferung der Hilfen beauftragt sind, sind oft zu groß um zu erkennen, wo die wahren Bedürfnisse liegen, um dann rechtzeitig darauf zu reagieren, oder um die Mittel effektiv und effizient einzusetzen. Einfach gesagt neigen große Organisationen dazu, bürokratisch zu sein, und einen großen administrativen Wasserkopf zu haben, der viele Resourcen intern verschlingt. Als Außenseiter fehlen ihnen auch oft die kulturellen Verbindungen, welche notwendig sind um informelle Brücken zu bauen und Hilfmittelverteilung zu lenken. Die Regeln, welche die intitutionalisierte Hilfsindustrie befolgen muß, zum Beispiel die Bedingung für Hungernde, sich auszuweisen, bevor man berechtig ist, Lebensmittel zu erhalten, kann zu großen Hindernissen führen.

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Jan 102017
 
 January 10, 2017  Posted by at 11:07 am Finance Tagged with: , , , , , , , ,  4 Responses »
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Jack Delano Truck service station on U.S. 1, NY Avenue, Washington, DC 1940


Pity the Sad Legacy of Barack Obama (Cornel West)
State Dep.: Presenting Evidence Of Russian Hacking Would Be Irresponsible (ZH)
Breakaway Senate Republicans Push to Delay Obamacare Repeal (BBG)
If Trump Tries To Lower Drug Prices, God Help Him: Top Medicare Official (MW)
Democrats Seek 9/11-Style Commission To Investigate Russian Hacking (G.)
Jeremy Corbyn: UK Can Be Better Off Out Of The EU (G.)
Britain’s Dangerous Post-Brexit Borrowing Binge (BBG)
Shadow Lending Leaves Chinese Banks Looking Exposed (BBG)
Thousands Of US Troops Arrive In Europe (ZH)
Top Economists Grapple With Public Disdain (WSJ)
The Harsh Reality (Kath.)
European Commission: ‘Untenable’ Situation In Greek Refugee Camps (AP)

 

 

“..a depressing decline in the highest office of the most powerful empire in the history of the world.”

Pity the Sad Legacy of Barack Obama (Cornel West)

Eight years ago the world was on the brink of a grand celebration: the inauguration of a brilliant and charismatic black president of the United States of America. Today we are on the edge of an abyss: the installation of a mendacious and cathartic white president who will replace him. This is a depressing decline in the highest office of the most powerful empire in the history of the world. It could easily produce a pervasive cynicism and poisonous nihilism. Is there really any hope for truth and justice in this decadent time? Does America even have the capacity to be honest about itself and come to terms with its self-destructive addiction to money-worship and cowardly xenophobia?

Ralph Waldo Emerson and Herman Melville – the two great public intellectuals of 19th-century America – wrestled with similar questions and reached the same conclusion as Heraclitus: character is destiny (“sow a character and you reap a destiny”). The age of Barack Obama may have been our last chance to break from our neoliberal soulcraft. We are rooted in market-driven brands that shun integrity and profit-driven policies that trump public goods. Our “post-integrity” and “post-truth” world is suffocated by entertaining brands and money-making activities that have little or nothing to do with truth, integrity or the long-term survival of the planet. We are witnessing the postmodern version of the full-scale gangsterization of the world. The reign of Obama did not produce the nightmare of Donald Trump – but it did contribute to it. And those Obama cheerleaders who refused to make him accountable bear some responsibility.

A few of us begged and pleaded with Obama to break with the Wall Street priorities and bail out Main Street. But he followed the advice of his “smart” neoliberal advisers to bail out Wall Street. In March 2009, Obama met with Wall Street leaders. He proclaimed: I stand between you and the pitchforks. I am on your side and I will protect you, he promised them. And not one Wall Street criminal executive went to jail. We called for the accountability of US torturers of innocent Muslims and the transparency of US drone strikes killing innocent civilians. Obama’s administration told us no civilians had been killed. And then we were told a few had been killed. And then told maybe 65 or so had been killed. Yet when an American civilian, Warren Weinstein, was killed in 2015 there was an immediate press conference with deep apologies and financial compensation. And today we still don’t know how many have had their lives taken away.

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Because the 9/11 commission was so successful?

Democrats Seek 9/11-Style Commission To Investigate Russian Hacking (G.)

Democratic members of the US Congress called on Monday for the creation of an independent commission to investigate Russia’s attempts to intervene in the 2016 election, similar to the September 11 panel that investigated the 2001 attacks on the United States. Their “Protecting our Democracy Act” would create a 12-member, bipartisan independent panel to interview witnesses, obtain documents, issue subpoenas and receive public testimony to examine attempts by Moscow and any other entities to influence the election. The panel members would not be members of Congress. The legislation is one of many calls by lawmakers to look into Russian involvement in the contest, in which Republican Donald Trump defeated Democrat Hillary Clinton in the White House race, confounding opinion polls.

Republicans also kept control of the Senate and House of Representatives by larger-than-expected margins. US intelligence agencies on Friday released a report saying that President Vladimir Putin of Russia ordered an effort to help Trump’s electoral chances by discrediting Clinton. Russia has denied the hacking allegations. A Kremlin spokesman said on Monday they were “reminiscent of a witch-hunt”. “There is no question that Russia attacked us,” Senator Ben Cardin, the top Democrat on the Senate foreign relations committee, told a news conference. Versions of the bill were introduced in both the Senate and House. In the Senate it has 10 sponsors. In the House it is backed by every member of the Democratic caucus, said Representative Elijah Cummings, the top Democrat on the House oversight committee. However, no Republicans currently back the bill, so its prospects are dim, given Republican control of both houses of Congress.

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And then after that commission is done investogating, they won’t tell anyone?

State Dep.: Presenting Evidence Of Russian Hacking Would Be Irresponsible (ZH)

One recurring lament throughout the theatrically dramatic campaign involving reports and emotional appeals by US intelligence agencies such as the CIA (whose primary function is the creation of disinformation) to ordinary Americans, that Russia had “hacked the US presidential election” is that for all the bluster and “conviction”, there has been zero evidence. And, as it turns out, there won’t be any, because according to the US State Department, US intelligence agencies were right to not reveal evidence of their proof that Russia interfered in US elections, and comparisons with intelligence reports that Iraq had WMDs were not relevant in the current year.

Asked by RT’s Gayane Chichakyan if Friday’s public intelligence report should have contained any proof of Russian intervention, State Department spokesman John Kirby said that no one should be surprised that US intelligence agencies were keeping evidence secret in order to protect sources and methods. “Most American people understand that they have the responsibility to protect their sources and methods,” Kirby said, adding it would be “irresponsible” to do otherwise. Actually, with the Iraq WMD fiasco strill fresh in “American people’s” minds, it is irresponsible to think most Americans are still naive idiots who will believe whatever the “intelligence agencies” will tell them.

Alas, none of that has filtered through to the appropriate authorities, and Kirby said that it was “up to the agencies to decide which information they share with the public. We rely on them to make that determination for themselves.” And, in this case, it meant sharing no information at all. The assessment in Friday’s report was made “by all 17 intelligence communities. All of them came to the same basic conclusion: that Russia interfered in the US election,” Kirby said. “All of our intelligence communities came to the same basic conclusion, over and over again.” They just couldn’t prove it, instead hoping that by repeating the same statement over and over would be sufficient.

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Get an alternative is place first, makes sense.

Breakaway Senate Republicans Push to Delay Obamacare Repeal (BBG)

A breakaway group of five moderate Senate Republicans pushed Monday to delay a bill repealing Obamacare until March — potentially enough pressure to force the party’s leadership to comply. The step is the latest sign of some Republicans’ growing uneasiness about their leadership’s plan to repeal the law with no consensus on a replacement as part of an effort to deliver swiftly on one of President-elect Donald Trump’s top campaign promises. Senators Bob Corker of Tennessee, Rob Portman of Ohio, Susan Collins of Maine, Bill Cassidy of Louisiana and Lisa Murkowski of Alaska offered an amendment Monday to the budget resolution that would extend the target date for the committees to write an Obamacare repeal bill to March 3 from Jan. 27.

“As President-elect Trump has stated, repeal and replace should take place simultaneously, and this amendment will give the incoming administration more time to outline its priorities,” Corker said in a statement. “By extending the deadline for budget reconciliation instructions until March, Congress and the incoming administration will each have additional time to get the policy right.” With Democrats opposed to a straight repeal bill, Republicans can lose no more than one backer if they want to fast-track their approach before Trump takes office. Republican leaders in the Senate are hoping to adopt the budget resolution – which would allow an Obamacare repeal bill to pass with 50 votes and escape a Senate filibuster – early Thursday after a marathon session of amendment votes.

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The power of the US pharmaceutical industry is scary.

If Trump Tries To Lower Drug Prices, God Help Him: Top Medicare Official (MW)

President-elect Donald Trump said on the campaign trail that Medicare should negotiate for lower drug prices. “God help him,” Acting Centers for Medicare and Medicaid Administrator Andy Slavitt said at the JP Morgan Health Care Conference in San Francisco on Monday. “He’s not wrong, but you need a lot of … to coin a phrase that’s been used, a fair amount of stamina if you are going to deal with the pharmaceutical industry on this topic.” Drug-pricing talk has been in the air at the JP Morgan conference, with a new administration about to take office and adding tremendous regulatory uncertainty to this sector. Despite critical comments made during election season, the president-elect has largely been seen by pharmaceutical and biotechnology companies as a positive, deregulatory force for their industry.

But the issue, still very much in the public eye, may not be off the table. Trump vowed to “bring drug prices down” in December comments to Time. The U.S. pays far more than other countries for pharmaceutical drugs, and has for a long time. “If [Trump] has the stamina he will see two things… the American public is being taken advantage of. And secondly, we are funding the R&D for free riders across the world,” Slavitt said. “And I don’t think the president-elect… is going to take too well to that.” While other countries use government negotiations to bring down drug costs, the tactic is often seen as anathema to the American free-market system. But, “this is a topic that will eventually be dealt with,” Slavitt predicted. “It’s easier to deal with this in 2017 than it will be in 2021 or 2022, when it is crippling the finances of health care.”

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Too many people are already invested in the opposite idea.

Jeremy Corbyn: UK Can Be Better Off Out Of The EU (G.)

Jeremy Corbyn will use his first speech of 2017 to claim that Britain can be better off outside the EU and insist that the Labour party has no principled objection to ending the free movement of European workers in the UK. Setting out his party’s pitch on Brexit in the year that Theresa May will trigger article 50, the Labour leader will also reach for the language of leave campaigners by promising to deliver on a pledge to spend millions of pounds extra on the NHS every week. He will say Labour’s priority in EU negotiations will remain full access to the European single market, but that his party wants “managed migration” and to repatriate powers from Brussels that would allow governments to intervene in struggling industries such as steel.

Sources suggested that the economic demands were about tariff-free access to the single market, rather than membership that they argued did not exist. Corbyn’s speech and planned media appearances represent the first example of a new anti-establishment drive designed by strategists to emphasise and spread his image as a leftwing populist to a new set of voters. They hope the revamp will help overturn poor poll ratings across the country, particularly with a looming byelection in Copeland, Cumbria. Speaking in Peterborough, chosen because it is a marginal Tory seat that voted heavily in favour of Brexit, and which Labour is targeting, Corbyn will lay into May’s failure to reveal any Brexit planning, and say that Labour will not give the government a free pass in the negotiations.

After comparing the prime minister’s refusal to offer MPs a vote on the final Brexit deal to the behaviour of Henry VIII in a Guardian interview, Corbyn will say: “Not since the second world war has Britain’s ruling elite so recklessly put the country in such an exposed position without a plan.”

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This should scare people.

Britain’s Dangerous Post-Brexit Borrowing Binge (BBG)

For the U.K. economy, the good news is that following the Brexit vote, the sky hasn’t fallen as many predicted; on the contrary, it’s been a period of unexpected fair weather. The bad news is that the benign outlook is encouraging a surge in borrowing, leaving households vulnerable if the Bank of England decides to tighten monetary policy. Andy Haldane, the chief economist at the central bank, said last week that as far as the British consumer is concerned, “it’s almost as though the referendum had not taken place.” That, he says, helps explain why the central bank’s gloomy prognosis of what a vote to leave the European Union would do to the economy has thus far turned out to be wrong. The nation appears to have been in celebratory mood this Christmas.

Credit-card company Visa said on Monday that U.K. spending jumped 2.6% in December from a year earlier, led by a 7.3% jump in hotels, restaurants and bars. In the final three months of 2016, overall spending posted its strongest growth in two years, Visa said. Britons have been loading up on debt. At the start of 2000, households had debts about equivalent to their disposable income. The ratio surged in the following years, peaking at 160% in the first quarter of 2008. As the financial crisis took its toll, people scaled back on borrowing, and the ratio had dropped to about 137% by September 2015. But it then rose for four consecutive quarters, with the most recently available figures showing a jump to 143% in the third quarter of last year:

As the chart shows, Brits are more indebted than their peers in either the U.S. or the euro zone. Perhaps unsurprisingly, while British households are still making their payments on secured loans such as mortgages, defaults on unsecured loans surged as the total debt burden climbed:

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“Of late [..] liquidity in China has been a mere accounting artifact.”

Shadow Lending Leaves Chinese Banks Looking Exposed (BBG)

In their obsession with China’s falling foreign-exchange reserves, investors may be ignoring a more painful Catch-22: a growing shortage of bank deposits. Left unaddressed, the lenders’ liquidity squeeze could leave them dangerously exposed to fickle wholesale financing, while trying to ease the shortage could worsen capital flight. Take Bank of Jinzhou. With just 0.3% of the $22 trillion in assets of the 35 publicly traded Chinese lenders, the bank appears remarkably liquid. Its 57% loan-to-deposit ratio in June was below the median reading of 67%. The Hong Kong-listed institution’s 200 billion yuan ($30 billion) deposit base offered ample support to a loan portfolio only a little higher than half that amount.

Of late, however, liquidity in China has been a mere accounting artifact. Customers’ deposits aren’t sufficient to finance Bank of Jinzhou’s 213 billion yuan in shadow loans, which are debt securities that the lender classifies as receivables. To make up the shortfall, it has borrowed 142 billion yuan from other financial institutions. Of this, as much as 78% is short-term financing. After adjusting for shadow lending, S&P Global Ratings pegged Bank of Jinzhou’s loan-to-deposit ratio at the end of 2015 at 153%. Bank of Jinzhou is hardly the only Chinese bank flirting with illiquidity: Almost all are sitting on a pile of debt masquerading as receivables.

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Nobel Peace Prize.

Thousands Of US Troops Arrive In Europe (ZH)

Just days after we reported that the US had begun deploying some 2,800 tanks, trucks and other military equipment to Germany, from where they would be transported by rail and road to Eastern Europe as part of a buildup of NATO reinforcements against “Russian expansion”, the next US deployment has made its way to Europe over the weekend, when some 4,000 US troops arrived in the German port of Bremerheven, on their way to Wroclaw, Poland under a planned NATO operation to “reassure the alliance’s Eastern European allies” in the face of what NATO has dubbed mounting Russian aggression. The American soldiers landed in Wroclaw, home to a key Nato and Polish air base in south-west Poland.

The troops will be followed by the roughly 2,800 tanks and other pieces of military equipment which are currently en route from Germany. The delivery of US Abrams tanks, Paladin artillery, and Bradley fighting vehicles, as well as supporting troops, marks a new phase of America’s continuous presence in Europe, which will now be based on a nine-month rotation. Why provoke Russia with yet another mass deployment? Because as NATO Major General Timothy McGuire told reporters, last week, when asked if the large deployment was meant to send a message to Russia, “The best way to maintain the peace is through preparation.” And while we are quoting, here is another good line from the movie Spice Like Us: “A weapon unused is a useless weapon.” The US military industrial complex is doing everything in its power to make sure a lot of weapons are used in the future.

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The priesthood is aghast.

Top Economists Grapple With Public Disdain (WSJ)

The nation’s leading economists are suffering an identity crisis as many of the institutions they helped build and causes they advanced have come in for public scorn and rejection at the ballot box. The angst was on display this weekend at the annual conference of the American Economic Association, the profession’s largest gathering. The conference is a showcase for agenda-setting research, a giant job fair for the nation’s most promising young economists and, this year, the site of endless discussion about how to rebuild trust in the discipline. Many academic economists have been champions of free trade and globalization, ideas under assault among rising populist movements in advanced economies around the world.

The rise of President-elect Donald Trump, with his fierce rhetoric against elites, in particular, left many at this conference questioning their place in the world. “The economic elite did many things to undermine their credibility while people’s economic fortunes were taking a turn for the worse,” said Steven Davis, an economist at the University of Chicago. But a road map for regaining trust is elusive. “I used to think facts and analysis will ultimately carry the day but now I’m not quite sure.” [..] Surveys from the Pew Research Center have documented dwindling support for free trade. In 2014, 60% of Democratic voters and 55% of Republican voters supported such trade agreements. In an October survey, however, support among Democrats had fallen to 56% and support among Republicans had nose-dived to 24%.

Over a billion people moved out of poverty in developing countries in the last 25 years, lifted in part by global trade and other economic prescriptions, but those same policies created winners and losers in the West. Another Pew study last year compared views of whether it was good for the U.S. to be so involved in the global economy: 86% of scholars said it was good, and just 2% bad. Among the general public, 49% thought it was bad, and just 44% good.

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A lot of snow in Athens overnight. Very cold too. It’s worse on the islands. And all we get is blame games.

The Harsh Reality (Kath.)

The refugees and migrants, thousands of people from Asia and Africa who are wintering in Greece in the hope that their dream will come true and that they will move on to central and northern Europe (imagined as hospitable by need) are harboring no illusions about this country. Greece is a country with real problems: economic, social and now weather-related. These people have to put up with the same problems as we do but the place where they are doing it from is far more difficult: They have no safe accommodation, no money and limited freedom. The additional shows of solidarity that may have come with the holiday season (even if mere publicity stunts designed for the television cameras) were soon to be wiped out by the cold snap, which also affected the islands of the Aegean. There will be no such thing as halcyon days for these people.

Official assurances by government officials that the authorities managed to provide warm and safe shelter for all asylum seekers and migrants offer little comfort, as no amount of political will, or plain desire for that matter, can reverse the situation on the ground. The problems faced by the refugee population are not tackled by prohibiting photographers from documenting the situation inside the Moria camp on Lesvos island. You cannot remedy reality by banning its representation. Is it that we do not want to taint the nation’s image in the eyes of our European partners? But the image of Greece is only part of the bigger European image. What is now happening at Moria, or any other migrant camp in Greece or Italy, is not disconnected from the values and priorities in the rest of Europe, in Poland, Austria, Slovakia or Denmark.

European Union countries, which had pledged to take in 160,000 people from Greece and Italy, have so far absorbed below 5% of that figure. Just 6,212 lucky few have been relocated from Greece and 1,950 from Italy, making a total of 8,162. The inaction, the indifference and the amoralistic policy of Europe (which is also fed by electoral concerns and growing far-right intolerance) should not serve as an alibi for the Greek government. In dealing with the migrant crisis, the SYRIZA-led administration has reacted without a clear plan or good coordination with other governments. And one last thing: The decision of Lesvos’s hoteliers to close their doors to refugees and migrants is barely in line with all the idealized rhetoric about a community’s obligations toward a supplicant – and it seems even more out of line under the existing circumstances.

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The EU hands 10s of millions in taxpayer funds to NGOs. As these fail to do what they receive the money for, it’s back to blaming Greece.

European Commission: ‘Untenable’ Situation In Greek Refugee Camps (AP)

The European Commission says conditions for refugees on Greek islands and in other camps where they are housed in tents despite severe cold weather, is “untenable.” Heavy snowfall has hit large swaths of Greece, including the eastern Aegean islands where thousands of refugees are stranded. Giorgos Kyritsis, spokesman for the government’s crisis committee on migration, told Greece’s Skai television that just under 1,000 people remain housed in tents on the islands. The severe weather had been forecast well in advance, and the government has come under fire for not acting fast enough to ensure all refugees are adequately housed. Commission spokeswoman Natasha Bertaud said the commission “is aware that the situation is currently untenable, but we also have to be clear” that conditions in reception centers are the responsibility of Greek authorities.


January 10 : homeless man sleeps on Athens beach Photo: Eurokinisi

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Jan 082017
 
 January 8, 2017  Posted by at 9:35 am Finance Tagged with: , , , , , , , , ,  2 Responses »
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Trump: Only ‘Fools’, ‘Stupid People’, See Good Ties With Russia as Bad (BBG)
At Home and Abroad, Obama’s Trail of Disasters (BGlobe)
Russians Ridicule US Charge That Kremlin Meddled to Help Trump (NYT)
How RT Became The Star Of CIA, FBI & NSA’s Anticlimactic ‘Big Reveal’ (McD)
No One Can Afford To Stop The New Consumer Credit Crisis (G.)
China’s Foreign Exchange Reserves Fall To Lowest Since February 2011 (R.)
The Growing Threat to Global Trade: a Currency War (Forsyth)
Fed’s Powell Urges Congress to Take Another Look at Volcker Rule (BBG)
New Policies Coming To America Could Take Weight Off Fed: Powell (R.)
Economists Want to Be Members of Donald Trump’s Team (BBG)
EU Collapse ‘No Longer Unthinkable’ – German Vice Chancellor Gabriel (R.)
Greeks’ Mental Health Suffering (Kath.)

 

 

This is Trump’s Trump Card. Stop the empty rhetoric, and stop the warfare. If he can do that, he’ll go down in history as a great president.

Trump: Only ‘Fools’, ‘Stupid People’, See Good Ties With Russia as Bad (BBG)

Facing calls to strike back at Russia for what U.S. intelligence agencies have termed Moscow’s interference with the 2016 U.S. presidential election campaign, Donald Trump instead suggested warmer relations between the two countries. The president-elect took to Twitter on Saturday to discuss the potential U.S.-Russia relationship under his administration, a day after U.S. spy chiefs briefed him on the Russian measures they said were directed by President Vladimir Putin. “Having a good relationship with Russia is a good thing, not a bad thing,” Trump said in a series of three tweets. “Only ‘stupid’ people, or fools, would think it is bad! We have enough problems around the world without yet another one.” “When I am President, Russia will respect us far more than they do now,” Trump assured his 19 million Twitter followers.

On Friday, top U.S. intelligence officials met with the president-elect at Trump Tower in New York to present evidence that Putin personally ordered cyber and disinformation attacks on the U.S. campaign. Putin developed “a clear preference” for Trump to win, the agencies said in a declassified summary of their findings. The agencies said they “assess Putin and the Russian government aspired to help President-elect Trump’s election chances when possible by discrediting Secretary Clinton and publicly contrasting her unfavorably to him,” according to the report. “All three agencies agree with this judgment. CIA and FBI have high confidence in this judgment; NSA has moderate confidence,” the report said. “Moscow will apply lessons learned from its Putin-ordered campaign aimed at the U.S. presidential election to future influence efforts worldwide, including against U.S. allies and their election processes.”

On Saturday, posts from the Twitter account of the Russian Embassy in the U.K. dismissed the report, calling it “a pathetic attempt at tainting Americans’ vote by innuendo couched in Intel new-speak.” “All accusations against Russia are based on ‘confidence’ and assumptions,” Alexey Pushkov, a member of the Russian Parliament’s upper house, said on Twitter. As Trump’s transition team did in a statement in December, Pushkov drew a parallel with the U.S. intelligence finding of the early 2000s that Iraq’s Saddam Hussein had weapons of mass destruction. The report was released shortly after intelligence chiefs briefed Trump on their findings that Russia was responsible for the hacking of Democratic Party computers and the leaking of e-mails damaging to Democratic presidential nominee Hillary Clinton. Russia has repeatedly denied the accusations.

Trump said negligence by the DNC had allowed the hacking to go ahead. “Only reason the hacking of the poorly defended DNC is discussed is that the loss by the Dems was so big that they are totally embarrassed!” Trump tweeted on Saturday. By contrast, “the Republican National Committee had strong defense!” he said — although the intelligence report said that Russia had targeted both major parties.

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I guess kudo’s are due to the Boston Globe, generally in the same false news camp as the WaPo and NYT, for publishing this.

At Home and Abroad, Obama’s Trail of Disasters (BGlobe)

As he prepares to move out of the White House, Barack Obama is understandably focused on his legacy and reputation. The president will deliver a farewell address in Chicago on Tuesday; he told his supporters in an e-mail that the speech would “celebrate the ways you’ve changed this country for the better these past eight years,” and previewed his closing argument in a series of tweets hailing “the remarkable progress” for which he hopes to be remembered. Certainly Obama has his admirers. For years he has enjoyed doting coverage in the mainstream media. Those press ovations will continue, if a spate of new or forthcoming books by journalists is any indication. Moreover, Obama is going out with better-than-average approval ratings for a departing president. So his push to depict his presidency as years of “remarkable progress” is likely to resonate with his true believers.

But there are considerably fewer of those true believers than there used to be. Most Americans long ago got over their crush on Obama, as they repeatedly demonstrated at the polls. In 2010, two years after electing him president, voters trounced Obama’s party, handing Democrats the biggest midterm losses in 72 years. Obama was reelected in 2012, but by nearly 4 million fewer votes than in his first election, making him the only president ever to win a second term with shrunken margins in both the popular and electoral vote. Two years later, with Obama imploring voters, “[My] policies are on the ballot — every single one of them,” Democrats were clobbered again. And in 2016, as he campaigned hard for Hillary Clinton, Obama was increasingly adamant that his legacy was at stake. “I’m not on this ballot,” he told campaign rallies in a frequent refrain, “but everything we’ve done these last eight years is on the ballot.” The voters heard him out, and once more turned him down.

As a political leader, Obama has been a disaster for his party. Since his inauguration in 2009, roughly 1,100 elected Democrats nationwide have been ousted by Republicans. Democrats lost their majorities in the US House and Senate. They now hold just 18 of the 50 governorships, and only 31 of the nation’s 99 state legislative chambers. After eight years under Obama, the GOP is stronger than at any time since the 1920s, and the outgoing president’s party is in tatters. Obama urged Americans to cast their votes as a thumbs-up or thumbs-down on his legacy. That’s what they did. In almost every respect, Obama leaves behind a trail of failure and disappointment.

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Yes, even the NYT lets slip a line or two about the lack of evidence in the ridiculous US intelligence ‘report’. The article should have stopped at that, but continues in a sort of Macchiavellian spirit (actually uses the term too), trying to save some face.

Russians Ridicule US Charge That Kremlin Meddled to Help Trump (NYT)

Spies are usually thought of as bystanders who quietly steal secrets in the shadows. But the Russian versions, schooled in techniques used during the Cold War against the United States, have a more ambitious goal — shaping, not just snooping on, the politics of a nation that the Soviet-era K.G.B. targeted as the “main adversary.” That at least is the conclusion of a declassified report released on Friday that outlines what America’s top intelligence agencies view as an elaborate “influence campaign” ordered by President Vladimir V. Putin of Russia aimed at skewing the outcome of the 2016 presidential race. But the absence of any concrete evidence in the report of meddling by the Kremlin was met with a storm of mockery on Saturday by Russian politicians and commentators, who took to social media to ridicule the report as a potpourri of baseless conjecture.

In a message posted on Twitter, Alexey Pushkov, a member of the defense and security committee of the upper house of the Russian Parliament, ridiculed the American report as akin to C.I.A. assertions that Iraq had weapons of mass destruction: “Mountain gave birth to a mouse: all accusations against Russia are based on ‘confidence’ and assumptions. US was sure about Hussein possessing WMD in the same way.” Margarita Simonyan, the editor in chief of RT, a state-funded television network that broadcasts in English, who is cited repeatedly in the report, posted her own message on Twitter scoffing at the American intelligence community’s accusations. “Aaa, the CIA report is out! Laughter of the year! Intro to my show from 6 years ago is the main evidence of Russia’s influence at US elections. This is not a joke!” she wrote.

Even Russians who have been critical of their government voiced dismay at the United States intelligence agencies’ account of an elaborate Russian conspiracy unsupported by solid evidence. Alexey Kovalev, a Russian journalist who has followed and frequently criticized RT, said he was aghast that the report had given so much attention to the television station. “I do have a beef with RT and their chief,” Mr. Kovalev wrote on Twitter, “But they are not your nemesis, America. Please chill.”

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And Bryan McDonald finished off what the NYT started: “..it appears that we should swallow how RT succeeded where the combined might of CNN, NBC, CBS, The WaPo and the NYT and others failed in influencing the US election.”

How RT Became The Star Of CIA, FBI & NSA’s Anticlimactic ‘Big Reveal’ (McD)

The eagerly awaited Director Of National Intelligence’s (DNI) report “Assessing Russian Activities and Intentions in Recent US Elections” didn’t need such a long winded title. They could have just called it: “We Really Don’t Like RT.” Almost every major western news outlet splashed this story. But it was probably the New York Times’ report which was the most amusing. America’s “paper of record” hailed the DNI’s homework as “damning and surprisingly detailed.” Then a few paragraphs later admitted the analysis contained no actual evidence. Thus, in a few column inches, the Gray Lady went from describing the DNI’s release as something conclusive to conceding how it was all conjecture. “The declassified report contained no information about how the agencies had collected their data or had come to their conclusions,” the reporter, one David E. Sanger, told us.

He then reached further into his bag of tricks to warn how it is “bound to be attacked by skeptics.” Yes, those skeptics. Aren’t they awful? Like, imagine not accepting an intelligence document at face value? Especially when it warns that a nuclear armed military superpower is interfering in the American democratic process, but then offers not a smidgen of proof for its assertions. Not to mention how it appears to have been put together by a group of people with barely a clue about Russia. For instance, RT progams such as “Breaking The Set” and “The Truthseeker” are mentioned in a submission supposed to be about how RT supposedly cost Hillary Clinton the US Presidential Election. But both of these programmes went off air around two years ago. And, back then, Clinton wasn’t even the Democratic Party candidate for the 2016 contest.

[..] So how bad is this report? You’d have to say on a scale of 1-10, it’d be eleven. The core message appears to be that having a point of view which is out of sync with the liberal popular media is considered a hostile act by US spooks. And it’s specifically the liberal press’ worldview they are defending here. Now, it’s up to you to judge whether this support, from state actors, is justified or not. The DNI’s submission is ostensibly the work of highly qualified intelligence experts, but everything you learn about RT comes from publicly available interviews and Tweets posted by this channel’s own people. Yet, we are supposed to believe how the best Russia brains of three agencies – the CIA, FBI and NSA – laboured to produce this stuff? That said, the latter doesn’t appear to be fully on board, offering “moderate” confidence, in contrast to the other’s “high confidence.”

Approximately a third of the document centers on RT. And it appears that we should swallow how RT succeeded where the combined might of CNN, NBC, CBS, The WaPo and the NYT and others failed in influencing the US election. Not to mention the reality where 500 US media outlets endorsed Clinton and only 25 President-elect Donald Trump. It’s time to scream: “stop the lights!” [..] The DNI’s report is beyond bad. And it’s scary to think how outgoing President Obama has stirred up a nasty diplomatic battle with Russia based on intelligence so devoid of insight and quality. There is nothing here which suggests the authors have any special savvy or insight. In fact, you could argue how a group of students would’ve assembled something of similar substance by simply reading back issues of The New York Times. But the biggest takeaway is that it’s clear how the calibre of Russia expertise in America is mediocre, if not spookily sparse. And while this report might be fodder for amusement, the actual policy implications are nothing short of dangerous.

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And that’s by no means only true for Britain.

No One Can Afford To Stop The New Consumer Credit Crisis (G.)

Consumer debt has raised its ugly head again. According to the latest figures, the total has soared back to a level last seen just before the 2008 financial crash. To the untrained eye, the dramatic increase in spending using credit cards and loans might appear to prefigure a disaster of epic proportions. Excessive consumer debt played a big part in the collapse of Northern Rock, and looking back, this landmark banking disaster appears to have been the harbinger of an even bigger catastrophe when, a year later, Lehman Brothers fell over. This is not a view shared by the Bank of England, which says it need only keep a watching brief. Its complacency is born of forecasts of the ratio between household debt and GDP made by the Office for Budget Responsibility.

At the moment, the household debt to GDP ratio is around 140%, compared with almost 170% in 2008. The OBR’s latest analysis predicts that, over the next five years, the combination of consumer and mortgage debt will rise only gradually and fall well short of its pre-crisis peak. There is nothing wrong with judging household debt as a proportion of annual national income to gauge sustainability and the likelihood that borrowers can afford to pay it back. There is nothing wrong with it as long as you assume that GDP has been evenly shared out since the crash and that the people doing the borrowing have higher incomes, thanks to the higher GDP, to cope with repayments. Except that the Bank of England knows most people’s incomes have flatlined for years. It need look no further than official figures, which make it clear that the vast majority have missed out on the gains from GDP growth.

Incomes per head have barely recovered since 2008 and are only marginally ahead. Figures put together by the TUC last year from the official annual survey of hours and earnings paint an even gloomier picture. If they are only half right, the capacity of workers on low and average pay to manage debt payments is significantly diminished. It has estimated that, nationally, workers are more than £2,000 a year worse off after inflation is taken into account than they were in 2008 and more than £4,000 worse off in London. This should tell the central bank and the Treasury that a rise to £192bn in unsecured consumer debt in November – only a little short of the £208bn peak – is most definitely a cause for concern. And it therefore makes no sense to brush aside fears about rising debt levels by pointing to higher GDP. A debt-to-GDP figure is just not that relevant when the incomes of the people taking on the debt are stagnant.

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Beijing counting down the days till january 20. It still has $3 trillion left, but 90% or so of that is not available.

China’s Foreign Exchange Reserves Fall To Lowest Since February 2011 (R.)

China’s foreign exchange reserves fell for a sixth straight month in December but by less than expected to the lowest since February 2011, as authorities stepped in to support the yuan ahead of U.S. President-elect Donald Trump’s inauguration. China’s reserves shrank by $41 billion in December, slightly less than feared but the sixth straight month of declines, data showed on Saturday, after a week in which Beijing moved aggressively to punish those betting against the currency and make it harder for money to get out of the country. Analysts had forecast a drop of $51 billion. For the year as a whole, China’s reserves fell nearly $320 billion to $3.011 trillion, on top of a record drop of $513 billion in 2015. While the $3 trillion mark is not seen as a firm “line in the sand” for Beijing, concerns are swirling in global financial markets over the speed with which the country is depleting its ammunition to defend the currency and staunch capital outflows.

Some analysts estimate it needs to retain a minimum of $2.6 trillion to $2.8 trillion under the IMF’s adequacy measures. If pressure on the yuan persists, analysts suspect China will continue to tighten the screws on outflows via administrative and regulatory means, while pouncing sporadically on short sellers in forex markets to discourage them from building up excessive bets against the currency. But if it continues to burn through reserves at a rapid rate, some strategists believe China’s leaders may have little choice but to sanction another big “one-off” devaluation like that in 2015, which would likely roil global financial markets and stoke tensions with the new Trump administration. The yuan depreciated 6.6% against the surging dollar in 2016, its biggest one-year loss since 1994, and is expected to weaken further this year if the dollar’s rally has legs.

Adding to the pressure, Trump has vowed to label China a currency manipulator on his first day in office, and has threatened to slap huge tariffs on imports of Chinese goods. That has left Chinese eager to get money out of the country, creating what some researchers describe as a potentially destructive negative feedback loop, where fears of further yuan falls spur outflows that pile fresh pressure on the currency. “For 2016 as a whole we estimate total capital outflows to have been around $710 billion,” Capital Economics’ China economist Chang Liu told Reuters in an email. Capital Economics estimated net outflows in November and December alone were $76 billion and $66 billion, respectively.

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Trump will be willing to negotiate, but there’s doesn’t seem to be much, if any, room for China to move.

The Growing Threat to Global Trade: a Currency War (Forsyth)

While Trump has talked of imposing a so-called border tax on imports or tariffs, currencies are at the nexus of trade and are the quickest means to try to influence trade flows. In that regard, he has threatened to declare China a “currency manipulator” on Day One of his administration for allegedly pushing down the yuan to gain an export advantage. The risk is that this will escalate into a currency war, with both sides attempting to gain a trade advantage, and that it ultimately ends up disrupting global trade and financial markets. As with any war, this one should be avoided at all costs. But the events of the past year suggest never say never. [..] China, of course, is central to Trump’s strategy to reduce the U.S. trade deficit.

Harris writes that this includes three actions: naming China a currency manipulator; bringing trade cases against it under the WTO and U.S. rules; and using “every lawful presidential power to remedy trade disputes if China does not stop its illegal activities, including its theft of American trade secrets.” In addition, last week the president-elect named Robert Lighthizer as U.S. trade representative, adding him to the hawkish team of Peter Navarro, director of the new National Trade Council, and Commerce Secretary-designate Wilbur Ross. While the U.S. and China may find common ground on environmental regulation in China, given the unbreathable air in Beijing and other cities, Harris thinks it’s unlikely China would concede that it is manipulating its currency.

“China is currently fighting to prevent currency weakness, selling its foreign currency reserves to offset private capital flight from the country,” he continues. China’s reserves have fallen by about $1 trillion, to just over $3 trillion as of November; the latest data, due this weekend, will be closely watched to see how much Beijing’s cache has been depleted. That said, “some academics in China are suggesting the country should respond to being declared a ‘manipulator’ by letting the currency float, triggering even more weakness,” adds Harris. Other observers see such a course as dangerous. Danielle DiMartino Booth, writing in her latest Money Strong missive, quotes Leland Miller, president of China Beige Book, a private research group, that the last thing Beijing wants is a floating yuan.

“It would hurt them much more than anyone else and be greeted with massive retribution from every corner of the world. There would be countervailing devaluations and would cause global contagion,” he contends. “It would also be a major blow to [President] Xi’s credibility during a politically sensitive year, since he’s pledged to not float the currency. And it would NOT stanch outflows; all it would do is exacerbate them.”

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The independent Fed talking politics?!

Fed’s Powell Urges Congress to Take Another Look at Volcker Rule (BBG)

Federal Reserve Governor Jerome Powell urged Congress to rewrite the Volcker Rule that restricts proprietary trading, while urging “a high degree of vigilance” against the buildup of financial risks amid improving U.S. growth. “What the current law and rule do is effectively force you to look into the mind and heart of every trader on every trade to see what the intent is,” Powell said Saturday at the American Finance Association meeting in Chicago. “Is it propriety trading or something else? If that is the test you set yourself, you are going to wind up with tremendous expense and burden.” Powell’s comments compare to Fed Chair Janet Yellen, who has supported the sweeping bank rules of the 2010 Dodd-Frank Act in the wake of the global financial crisis. President-elect Donald Trump has vowed to dismantle Dodd-Frank. The Volcker Rule restricts banks with taxpayer-backed deposits from making certain types of speculative “proprietary” trades.

“We don’t want the largest financial institutions to be seriously engaged in propriety trading,” Powell said. “We do want them to be able to hedge their positions and create markets.” Powell said that the Volcker Rule, as enacted by U.S. lawmakers, doesn’t achieve that goal. “I feel the Congress should take another look at it.” In the text of his remarks, Powell urged more monitoring of financial risks following a period of record low interest rates, citing commercial real estate as one area of concern. “More recently, with inflation under control, overheating has shown up in the form of financial excess,” Powell said. “The current extended period of very low nominal rates calls for a high degree of vigilance against the buildup of risks to the stability of the financial system.”

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Is this simply the Fed trying to pass on the blame?

New Policies Coming To America Could Take Weight Off Fed: Powell (R.)

A push by Washington for more business-friendly regulation and fiscal support for the economy could improve America’s mix of policies which in recent years have relied too much on the Federal Reserve, Fed Governor Jerome Powell said. Powell, speaking on Saturday at a conference, did not mention the incoming Trump administration by name but his comments suggest some Trump policies will be welcomed by U.S. central bankers who have been urging other institutions to do more to help the economy. “We may be moving more to a more balanced policy with what sounds like more business-friendly regulation and possibly more fiscal support,” Powell told an economics conference in Chicago. President-elect Donald Trump, who takes office on Jan. 20, has promised to double America’s pace of economic growth, “rebuild” its infrastructure and slash regulatory burdens.

About half of the Fed’s 17 policymakers factored a fiscal stimulus into their economic forecasts published in December, according to minutes from the Fed’s December policy meeting. That expected stimulus has led several policymakers to say the Fed will likely raise rates more quickly, but Powell said new policies could also ease the Fed’s burden. “Monetary policy (might be) able to hand it off and I think that’s a healthier thing,” he said. “We may be moving to a more balanced policy mix.” Following a Congress-enacted fiscal stimulus during and immediately after the 2007-09 recession, the Fed in recent years has been widely seen as the economic authority working the hardest to help the economy. But throughout 2016, Fed policymakers worried publicly that the U.S. economy was stuck in a low growth path and central banking tools could do little to fix this. Central bankers urged Congress and the U.S. president to pass laws that would help make U.S. businesses and workers more productive.

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“..it might be more of a matter of Trump not wanting many economists in his administration..”

Economists Want to Be Members of Donald Trump’s Team (BBG)

Economists aren’t shying away from joining Donald Trump’s administration and would be willing to pitch in if asked, according to former economic policy makers now in academia. “The president will be able to get any economist he asked for,” said Glenn Hubbard, who served President George W. Bush as chairman of his Council of Economic Advisers from 2001 to 2003 and is now dean of Columbia University’s Graduate School of Business. Hubbard spoke Saturday in Chicago at the American Economic Association annual conference. A delay in naming a new CEA chair and reports that the position might go to CNBC commentator Lawrence Kudlow spawned speculation that leading academic economists were reluctant to join a team headed by an avowed skeptic of free trade.

“I don’t see that,” said John Taylor, an economics professor who served in the Bush administration as under secretary of Treasury for international affairs and now teaches at Stanford University. “It’s a pretty exciting time and lots of things are going on,” said Taylor, who worked in three other administrations as well. Alan Krueger, who led the CEA in the White House of President Barack Obama from 2011 to 2013 before passing the torch to incumbent Jason Furman, suggested that it might be more of a matter of Trump not wanting many economists in his administration, rather than the other way around. “I worry more about the demand side than the supply side,” said the Princeton University professor said. The audience laughed.

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Should have thought of that earlier. Because this has been evident for a very long time: Germany is the biggest beneficiary of the European community – economically and politically.” Just look at the graph I inserted at the bottom of this article.

EU Collapse ‘No Longer Unthinkable’ – German Vice Chancellor Gabriel (R.)

Germany’s insistence on austerity in the euro zone has left Europe more divided than ever and a break-up of the European Union is no longer inconceivable, German Vice Chancellor Sigmar Gabriel told Der Spiegel magazine. Gabriel, whose Social Democrats (SPD) are junior partner to Chancellor Angela Merkel’s conservatives in her ruling grand coalition, said strenuous efforts by countries like France and Italy to reduce their fiscal deficits came with political risks. “I once asked the chancellor, what would be more costly for Germany: for France to be allowed to have half a percentage point more deficit, or for Marine Le Pen to become president?” he said, referring to the leader of the far-right National Front. “Until today, she still owes me an answer,” added Gabriel, whose SPD favors a greater focus on investment while Merkel’s conservatives put more emphasis on fiscal discipline as a foundation for economic prosperity.

The SPD is expected to choose Gabriel, their long-standing chairman who is also economy minister, to run against Merkel for chancellor in September’s federal election, senior party sources said on Thursday. Asked if he really believed he could win more votes by transferring more German money to other EU countries, Gabriel replied: “I know that this discussion is extremely unpopular. But I also know about the state of the EU. It is no longer unthinkable that it breaks apart,” he said in the interview, published on Saturday. “Should that happen, our children and grandchildren would curse us,” he added. “Because Germany is the biggest beneficiary of the European community – economically and politically.”

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Thanks, Angela.

Greeks’ Mental Health Suffering (Kath.)

More than half of Greeks complain of mental health problems, with stress, insecurity and disappointment among the issues most commonly cited, according to the results of a nationwide survey by the National School of Public Health, known by its acronym ESDY. Over half of the 2,005 adults polled (53.9%) said their mental health had not been good over the past month due to stress, depression or other emotional problems. A quarter (24.8%) of respondents, identified poor physical or mental health as causing problems in their daily lives. A total of 15% said they felt insecurity, anxiety and fear, with 14% citing anger and frustration, 9.7% complaining of depression and sadness, 8.2% of stress and 44.6% citing all these ailments.

Four in 10 (42.6%) said they only enjoyed their lives “moderately” and one in 10 said they thought their lives had little or no meaning. The findings came as official figures showed that cases of depression rose from 2.6% of the population in 2008 to 4.7% in 2015. Responding to broader questions about their health and lifestyle, 20% of those polled said their diets had been insufficient over the past month due to low finances. According to health sector experts, however, the repercussions of the economic crisis on citizens’ health are less severe than many had feared. In comments to Kathimerini, Yiannis Kyriopoulos, a professor of health economics at the ESDY, said the findings of the study “simply observe a slowdown in the improvement of health indicators.”

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Jan 072017
 
 January 7, 2017  Posted by at 10:28 am Finance Tagged with: , , , , , , , , , ,  3 Responses »
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Arthur Rothstein Highway marker in Polk County, Florida 1937


Here Is The US Intel Report Accusing Putin Of Helping Trump Win (ZH)
A Case Study in the Creation of False News (Paul Craig Roberts)
Obama Set For Pardon Frenzy As He Leaves Office (AFP)
Worst. Recovery. Ever. (ZH)
How Many Bombs Did the United States Drop in 2016? (CFR)
Le Pen Says Brexit Isn’t a Disaster and France Should Be Next (BBG)
Economics Is Driven By Ideology, Not Science (Pettifor)
The Labor Market: The End Of The Innocence? (DiMartino Booth)
Canadian Woman Arrested In Turkey For Saying Erdogan Jails Journalists (CBC)
Giant Iceberg Poised To Break Off From Larsen C Antarctic Shelf (G.)

 

 

I’m so tired of this. No, ‘trust us’ is not good enough anymore. That is why Trump won, because it’s no longer enough to say ‘because we say so’. People don’t trust CIA et al. And you can’t turn that back on its head and demand trust now. You lost! I get so frustrated they even locked up my Facebook account again. There’s always people who want to complain about those who don’t toe lines.

Here Is The US Intel Report Accusing Putin Of Helping Trump Win (ZH)

The farce is complete. One week after a joint FBI/DHS report was released, supposedly meant to prove beyond a reasonable doubt that Russia intervened in the US presidential election, and thus served as a diplomatic basis for Obama’s expulsion of 35 diplomats, yet which merely confirmed that a Ukrainian piece of malware which could be purchased by anyone, was responsible for spoofing various email accounts including that of the DNC and John Podesta, moments ago US intelligence agencies released a more “authoritative”, 25-page report, titled “Assessing Russian Activities and Intentions in Recent US Elections”, and which not surprisingly only serves to validate the media narrative, by concluding that Russian President Vladimir Putin ‘ordered’ an effort to influence U.S. presidential election.

Specifically, the report concludes the following: “We assess Russian President Vladimir Putin ordered an influence campaign in 2016 aimed at the US presidential election. Russia’s goals were to undermine public faith in the US democratic process, denigrate Secretary Clinton, and harm her electability and potential presidency. We further assess Putin and the Russian Government developed a clear preference for President-elect Trump.” What proof is there? Sadly, again, none. However, as the intelligence agencies state, “We have high confidence in these judgments”… just like they had high confidence that Iraq had weapons of mass destruction. And while the report is severely lacking in any evidence, it is rich in judgments, such as the following:

“We assess Russian President Vladimir Putin ordered an influence campaign in 2016 aimed at the US presidential election. Russia’s goals were to undermine public faith in the US democratic process, denigrate Secretary Clinton, and harm her electability and potential presidency. We further assess Putin and the Russian Government developed a clear preference for President-elect Trump. We have high confidence in these judgments. “We also assess Putin and the Russian Government aspired to help President-elect Trump’s election chances when possible by discrediting Secretary Clinton and publicly contrasting her unfavorably to him. All three agencies agree with this judgment.”

At this point a quick detour, because the intel agencies responsible for drafting the report then explain how “confident” they are: “CIA and FBI have high confidence in this judgment; NSA has moderate confidence.” What do these distinctions mean? High confidence generally indicates judgments based on high-quality information, and/or the nature of the issue makes it possible to render a solid judgment. However, high confidence judgments still carry a risk of being wrong. Moderate confidence generally means credibly sourced and plausible information, but not of sufficient quality or corroboration to warrant a higher level of confidence. In other words, while not carrying the infamous DHS disclaimer according to which last week’s entire joint FBI/DHS report is likely garbage, the US intel agencies admit they may well be “wrong.”

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“Trump is supposed to side with the CIA which is trying to destroy him.”

A Case Study in the Creation of False News (Paul Craig Roberts)

For many weeks we have witnessed the extraordinary attack by the CIA and its assets in Congress and the media on Donald Trump’s election. In an unprecedented effort to delegitimize Trump’s election as the product of Russian interference in the election, the CIA, media, senators and representatives have consistently made wild accusations for which they have no evidence. The CIA’s message to Trump is clear: Get in line with our agenda, or we are going to mess you over. It is clear that the CIA is warring against Trump. But the CIA’s media assets have turned the facts on their head and are blaming Trump for having a negative view of the CIA. Consider the January 4 Wall Street Journal article by Damian Paletta and Julian E. Barnes, which begins: “President-elect Donald Trump, a harsh critic of U.S. intelligence agencies . . .”

The two presstitutes set up their false news story by putting the shoe on the other foot. It is Trump who is the harsh critic rather than the victim of the CIA’s harsh accusations. Set up this way, the story continues: “White House officials have been increasingly frustrated by Mr. Trump’s confrontations with intelligence officials. ‘It’s appalling,” the official said. “No president has ever taken on the CIA and come out looking good.’” Now that the story is Trump taking on the CIA and not the CIA taking on Trump, the case can be built against Trump: Analysts accustomed to more cohesion with the White House are “jarred” by Trump’s skepticism of the CIA’s assessment that Putin got him elected. Trump is supposed to respond to the allegation by saying: I am not legitimate. Here take back the presidency.

WikiLeaks’ Assange has stated unequivocally that there was no hack. The information came to WikiLeaks as a leak, which suggests that it came from inside the Democratic National Committee. That Trump sees it this way means, according to one unidentified official that “It’s pretty horrifying to me that he’s siding with Assange over the intelligence agencies.” You see, Trump is supposed to side with the CIA which is trying to destroy him. Has the CIA shot itself in both feet? How can the agency control policy by manipulating the information fed to the President when the President does not trust the agency?

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Leonard Peltier has been in jail for 40 years for a set-up. Forget about Snowden and Chelsea. Not going to happen.

Obama Set For Pardon Frenzy As He Leaves Office (AFP)

A Rastafarian prophet, a former Taliban captive and thousands of minor drug traffickers have one thing in common: Their names have been submitted to President Barack Obama for clemency before he leaves office in two weeks. Some US presidents have used this regal power of leniency in a pointed way near the end of their term in office. On the last day of his term in 2001, Democratic president Bill Clinton granted pardon in a highly controversial move to late fugitive trader Marc Rich, whose ex-wife had been a major donor to Democrats. Sixteen years later, Obama is fielding pressure from all sides to grant unlikely pardons or commutations of sentences to people whose supporters say have been unjustly sentenced or sought out by the justice system.

Among them is Bowe Bergdahl, a US Army sergeant held captive for five years by the Taliban before his release in a prisoner swap, who is due to be court-martialed for desertion. Leonard Peltier, a Native American activist convicted for the 1975 deaths of two FBI agents in what his supporters say was a setup, is also hoping to enjoy Obama’s good graces. Then there’s Edward Snowden, who made the shattering revelation in 2013 of a global communications and internet surveillance system set up by the United States. The 33-year-old, a refugee in Russia, is backed by numerous celebrities like actress Susan Sarandon and singer Peter Gabriel, as well as Amnesty International and the American Civil Liberties Union. If Obama fails to pardon Snowden, his supporters say he may face the death penalty under the incoming administration of Republican Donald Trump, who has called him a “terrible traitor.”

In another leak case, Chelsea Manning is serving a 35-year sentence in solitary confinement for handing 700,000 sensitive military and diplomatic documents to WikiLeaks, some of them classified. Activists say her sentence is excessive and point to the psychological frailty of the transgender soldier who has already made two suicide attempts. Even though the White House has dismissed a possible pardon for Snowden and Manning, their supporters are still hoping for a final magnanimous gesture from a president about to leave the constraints of his high office on January 20.

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We know.

Worst. Recovery. Ever. (ZH)

As the champagne glasses clink in Washington over a record-breaking streak of job growth on record (as the percent of the population employed slumped), and the fastest wage growth since the start of the recovery (for managers), we just wanted to remind a few blinkered media types that Obama’s “recovery” has officially been the worst recovery in US history (despite adding almost $10 trillion to the national debt)… When ‘fake news’ and ‘peddling fiction’ meet fact… Not quite as rosy an economic handover to Trump as The White House would like everyone to believe.

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Peace, man!

How Many Bombs Did the United States Drop in 2016? (CFR)

As President Obama enters the final weeks of his presidency, there will be ample assessments of his foreign military approach, which has focused on reducing U.S. ground combat troops (with the notable exception of the Afghanistan surge), supporting local security partners, and authorizing the expansive use of air power. Whether this strategy “works”—i.e. reduces the threat posed by extremists operating from those countries and improves overall security and governance on the ground—is highly contested. Yet, for better or worse, these are the central tenets of the Obama doctrine.

In President Obama’s last year in office, the United States dropped 26,171 bombs in seven countries. This estimate is undoubtedly low, considering reliable data is only available for airstrikes in Pakistan, Yemen, Somalia, and Libya, and a single “strike,” according to the Pentagon’s definition, can involve multiple bombs or munitions. In 2016, the United States dropped 3,027 more bombs—and in one more country, Libya—than in 2015.

Most (24,287) were dropped in Iraq and Syria. This number is based on the percentage of total coalition airstrikes carried out in 2016 by the United States in Operation Inherent Resolve (OIR), the counter-Islamic State campaign. The Pentagon publishes a running count of bombs dropped by the United States and its partners, and we found data for 2016 using OIR public strike releases and this handy tool.* Using this data, we found that in 2016, the United States conducted about 79% (5,904) of the coalition airstrikes in Iraq and Syria, which together total 7,473. Of the total 30,743 bombs that the coalition dropped, then, the United States dropped 24,287 (79% of 30,743).

To determine how many U.S. bombs were dropped on each Iraq and Syria, we looked at the percentage of total U.S. OIR airstrikes conducted in each country. They were nearly evenly split, with 49.8% (or 2,941 airstrikes) carried out in Iraq, and 50.2% (or 2,963 airstrikes) in Syria. Therefore, the number of bombs dropped were also nearly the same in the two countries (12,095 in Iraq; 12,192 in Syria). Last year, the United States conducted approximately 67% of airstrikes in Iraq in 2016, and 96% of those in Syria.

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Quick, Carney, cause chaos, or Le Pen will win…

Le Pen Says Brexit Isn’t a Disaster and France Should Be Next (BBG)

French presidential candidate Marine Le Pen said the U.K. economy is weathering Brexit, giving her confidence to seek an immediate renegotiation of France’s relationship with the European Union if elected. “Brexit has not been a disaster,” Le Pen said at a meeting with English-language reporters in Paris on Friday. “The economic signals are good.” National Front leader Le Pen, who polls suggest will reach the presidential runoff in May, said she would seek talks with France’s EU partners “the day after my election” and put the result to a national referendum. She said the goal is to take back what she called “the four sovereignties”: control of borders, economic policy, money and legislation. France should dump the euro and return to a national currency, though the exchange rate could be linked to some sort of European currency mechanism, Le Pen said.

“I’ll give six months to these talks, and if at the end we have won back our sovereignty, I will tell the French to vote to stay in this Europe of nations and liberty,” she said. “If we don’t, I’ll suggest that they vote to leave.” Polls suggest Le Pen would finish second in the first round of France’s presidential elections on April 23, and lose a May 7 runoff to center-right candidate Francois Fillon. An Elabe poll released Thursday showed independent Emmanuel Macron gaining on Le Pen, taking second place in some hypothetical matchups. Le Pen, whose party received a $8.5 million loan from a Russian bank in 2014, said she doesn’t fear Russian meddling in France’s election. That follows U.S. intelligence findings that Russian officials directed hacking attacks to help elect Trump, whom she said she supports because his anti-globalist views were better for France.

“Every time big corporations, big finance don’t get what they want, they say it’s a conspiracy of the Russians,” she said. “It makes one laugh.” While the U.S. shouldn’t lecture anyone given its history of spying on allies, improved ties between Russia and the U.S. are in France’s interest, especially if they can cooperate on combating Islamic militants, Le Pen said. “I think that Mr. Trump and Putin can repair ties, and I hope so,” she said. “We don’t want to see an increase in tensions between the U.S. and Russia for a very selfish reason: we are in the middle.”

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Should we let economists ‘heal’ their own field, or is it too late for that?

Economics Is Driven By Ideology, Not Science (Pettifor)

As someone who correctly predicted the financial crisis (first in 2003 and later in a 2006 book) I support Andy Haldane’s assertion that the economics profession is “to some degree in crisis”. He is not the first to argue this. The retiring head of the UK Treasury admitted in 2016 that economists failed to spot the build-up of risk before 2007 and were guilty of what he called “a monumental collective intellectual error”. It is a collective intellectual failure that I believe has played a key role in the rise of political populism. The Bank of England’s chief economist was also right to compare the challenges facing economists to the famous “Michael Fish” moment, where everyone was assured that a hurricane wouldn’t hit before it did, bringing with it much devastation, in 1987.

Meteorologists have since transformed their field and improved forecasts. But that is not true of the economics profession. The dominant economic model of financial liberalisation, monetary policy dominance and fiscal austerity remains intact. In their defence, economists can’t be faulted for getting forecasts wrong. Political events such as Brexit are not easy to predict. But unlike economists, meteorologists have a deep understanding of the major forces shaping outcomes in their fields, even when they get precise forecasts wrong. Mainstream economists, by contrast, lack that deep understanding of the economic forces driving outcomes. The reason is not hard to understand. The field of meteorology is not underpinned by policy or by an agenda. Economics, by contrast, is dogged by ideology.

It is ideology, not science, that leads economists to wrongly assert that the market in money is like the market in widgets, and must not be regulated or tampered with by governments. That financial flows across borders must be “free”, regardless of whether they cause instability. That bankers are simply intermediaries between savers and borrowers – and do not create credit out of thin air. That monetary and fiscal policies that serve the finance sector with bailouts are tolerable, while those that serve the poor must be resisted. That the reasoning that informs the micro-economy can be extrapolated to reach conclusions about the macro-economy. In other words, the fallacy that the budgets of households (the micro-economy) can be aggregated and compared to the budgets of governments (the macro-economy).

Unsurprisingly, these flawed theories and models are a great comfort to financial elites – which is why so many economists are hired and funded by big banks, corporations and the wealthy. And it explains why their words and ideas are repeated by the media outlets that faithfully serve the status quo or “the establishment”. Very little has been done to transform the dominant economic model of financial and trade liberalisation or to limit economists’ almost religious belief in the efficiency of markets and hostility to public intervention.

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“Let me take a long last look, before we say goodbye..”

The Labor Market: The End Of The Innocence? (DiMartino Booth)

One of the first of life’s lessons we all learned is that we need not rush life; it will do that for us and in the end against our will. The inspiration for this wisdom could well have sprung from Ecclesiastes wherein we read these peaceful words: To every thing there is a season, and a time to every purpose under the heaven. Co-writers Don Henley and Bruce Hornsby embraced the spirit of this message as the 1980’s were coming to a close. You must agree 1989’s The End of the Innocence, that haunting and mournful ballad, was just the coda needed to move on to the last decade of the last century. “Let me take a long last look, before we say goodbye,” the song asks of the listener who can’t help themselves but to listen.

Many veteran investors, those who don’t need to be reminded about the Reagan era because they were there, may be feeling a bit more wistful as they peer over the horizon. They have lived through extraordinary economic times and maybe even recall the early 1970’s, the last time initial jobless claims were at their current historically low levels. They know, in other words, this can’t go on forever, that we are nearing the end of our own innocence. Federal Reserve Chair Janet Yellen has been adamant that economic cycles can’t die of old age. At the end of this month, we can proclaim to be living through the third longest expansion in postwar times. The parlor game occupying those on the Street these days entails devising scenarios that can push us into the second, or dare we dream, longest expansion of all.

The Wall Street Journal perfectly captures the infectious optimism, the yearning to keep that dream alive, by asking this in a headline: How Low Can the Unemployment Rate Go? Rather than keep you in suspense, the article’s answer is as follows: “Assuming the economy adds around 200,000 jobs a month in 2017 and the labor-force participation rate stays relatively constant, the unemployment rate would fall to 3.9% by the end of the year, according to a model maintained by the Federal Reserve Bank of Atlanta.” If we do get there, a big if, we are sure to be staring down the barrel of appreciably higher interest rates and a flat, if not by then, inverted yield curve. The only precedent is, you guessed it, that which occurred in 2000, when the unemployment rate hit 3.6% as the longest cycle of all time was finally flaming out. Economics 101 teaches one tenet above all – that the unemployment rate is the most lagging within the data universe.

A recent visit with Dr. Gates, that steel-eyed sleuth, corroborated this maxim. “The unemployment rate is the single, most visible economic indicator for households. It’s easy to understand, black and white. Up is bad, down is good,” Gates observed. “If we keep getting downside surprises, it will feed even more consumer optimism. That happens late in the cycle.” What goes hand in hand with these late cycles guideposts? Since you asked, that optimism Gates cites tends to correlate with households overreaching their paychecks, which is exactly what we’re seeing. When adjusted for inflation, credit card borrowing is up 4.5% over last year, a full two percentage points above wage income, which is up 2.5% over the same period. That’s a new high for the current cycle. At 2.9%, inflation-adjusted spending is also running ahead of wage income.

These data are validated by separate data that shows state withholding tax collections are way off last year’s figures. “Vulnerabilities in household demand don’t happen overnight; they take time to rise to the surface,” Gates cautioned. “Households aren’t overstretched yet, but they’re getting there. Just like corporations substitute debt for profits late in the cycle, households also are starting to do just as they ride the wave of Trump optimism. Eventually this will run its course.”

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So is Canada going to stand up to him?

Canadian Woman Arrested In Turkey For Saying Erdogan Jails Journalists (CBC)

A Canadian woman has been arrested in Turkey for allegedly insulting the country’s president in comments posted on Facebook, her Turkish lawyer said Thursday. Ece Heper, 50, was arrested in the city of Kars in northeastern Turkey, and charged on Dec. 30, Sertac Celikkaleli told The Canadian Press. Heper, a dual Canadian-Turkish citizen, had been in the country since mid-November, according to her friends. “She is intense and opinionated, for sure,” Birgitta Pavic said from her Toronto home. “But everything is intense over there right now, especially criticizing the government.” At issue, her friends and lawyer said, are several recent Facebook posts about Turkish President Recep Tayyip Erdogan.

In one posted on Dec. 28, Heper accused Erdogan of jailing journalists who suggest there is evidence Turkey is supporting the Islamic State of Iraq and the Levant, known as ISIS or ISIL. Global Affairs Canada said they are aware of a Canadian citizen detained in Turkey and are providing consular assistance, but wouldn’t divulge further information, citing privacy laws. Heper has a log home in Norwood, Ont., about 150 kilometres northeast of Toronto, Pavic said, where she lives with five dogs she rescued from Turkey “that are like her children.” Her parents are dead and she is estranged from her brother, Pavic said, so her friends are taking up the cause to help her out.

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We’re just going to watch it happen, ain’t we? That’s all we’re capable of.

Giant Iceberg Poised To Break Off From Larsen C Antarctic Shelf (G.)

A giant iceberg, with an area equivalent to Trinidad and Tobago, is poised to break off from the Antarctic shelf. A thread of just 20km of ice is now preventing the 5,000 sq km mass from floating away, following the sudden expansion last month of a rift that has been steadily growing for more than a decade. The iceberg, which is positioned on the most northern major ice shelf in Antarctica, known as Larsen C, is predicted to be one of the largest 10 break-offs ever recorded. Professor Adrian Luckman, a scientist at Swansea University and leader of the UK’s Midas project, said in a statement: “After a few months of steady, incremental advance since the last event, the rift grew suddenly by a further 18km during the second half of December 2016. Only a final 20km of ice now connects an iceberg one quarter the size of Wales to its parent ice shelf.”

The separation of the iceberg “will fundamentally change the landscape of the Antarctic Peninsula” and could trigger a wider break-up of the Larsen C ice shelf, he added. “If it doesn’t go in the next few months, I’ll be amazed,” Luckman told BBC News. Ice shelves are vast expanses of ice floating on the sea, several hundred metres thick, at the edge of glaciers. Scientists fear the loss of ice shelves will destabilise the frozen continent’s inland glaciers. And while the splitting off of the iceberg would not contribute to rising sea levels, the loss of glacial ice would. Martin O’Leary, also of Swansea University, said: “It just makes the whole shelf less stable. If it were to collapse there would be nothing holding the glaciers up and they would start to flow quite quickly indeed.”

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