oil Archives - Page 3 of 38 - The Automatic Earth

Update 4: It’s over: after a torrid 30 minutes in which the NY Fed first announced a repo operation, then announced the repo was canceled due to technical difficulties, then mysterious the difficulties went away just minutes later, at precisely 10:10am, the Fed concluded its first repo operation in a decade, which while not topping out at the $75 billion max, was nonetheless a significant $53.15 billion, split as follows: • $40.85BN with TSYs as collateral at a 2.1% stop out rate • $0.6BN with Agencies as collateral at a 3.0% stop out rate • $11.7BN with Mortgage-backed securities as collateral at a 2.1% stop out rate. While the Fed did not disclose how many banks participated in the operation, it is safe to say it was a sizable number.

Worse, the result from today’s unexpected repo operation, we can now conclude that in addition to $1.3 trillion in ‘excess reserves’, a Fed which is now cutting rates and will cut rates by 25bps tomorrow, the US financial system somehow found itself with a liquidity shortfall of $53 billion that almost paralyzed the interbank funding market. Oh, and for those wondering why the Fed did a repo, the answer is simple: it did not want to launch QE just yet. But make no mistake, once repo is insufficient, the Fed will have no choice but to escalate to the next step which is open market purchases. Which brings us to the bigger question of how long such overnight repos will satisfy the market, and how long before the next repo rate spike prompts the Fed to do the inevitable, and restart QE. At least president Trump will be delighted.

And while we’re saving their multi-million bonuses, let’s throw them some more bones,..

• Big Banks Score Win As FDIC Proposes Easing Post-Crisis Derivatives Rules (R.)

A U.S. banking regulator on Tuesday proposed easing a rule requiring banks to set aside cash to safeguard derivatives trades between affiliates, marking one of the biggest wins for Wall Street lenders under the business-friendly Trump administration. The proposal, by the Federal Deposit Insurance Corporation, could potentially free $40 billion across the nation’s largest banks, according to a 2018 survey by the International Swaps and Derivatives Association (ISDA), the global trade group that has been lobbying for the rule change for years.

The proposal is subject to public comment and will likely face resistance from Democratic lawmakers and consumer groups, who have warned that chipping away at regulations put in place following the 2007-2009 financial crisis could sew the seeds of the next one. Countries across the globe introduced a slew of rules to rein in the global over-the-counter derivatives market after big bets on credit swaps brought firms including Lehman Brothers and AIG to their knees.

Was there any damage at all? Didn’t I read that they hit a bunch of empty tanks?

• Oil Steadies After Saudi Pledges To Restore Output Lost In Attacks (R.)

Oil prices were little changed on Wednesday, steadying after Saudi Arabia said it will restore by the end of the month production lost in weekend attacks on its facilities. Prices plummeted 6% on Tuesday after Saudi Arabia’s energy minister said the country had managed to restore oil supplies to customers to where they stood before the attacks on its facilities that shut 5% of global oil output by drawing from its huge inventories. But tension in the region remained elevated after the United States said it believed the attacks on the world’s top oil exporter originated in southwestern Iran. Iran has denied involvement in the strikes.

Brent crude oil futures were flat at $64.55 a barrel by 0732 GMT. U.S. West Texas Intermediate (WTI) crude CLc1 futures were down 15 cents, or 0.1%, to $59.19 a barrel, after sinking 5.7% on Tuesday. “Considering limited spare (production) capacity outside Saudi Arabia and risks of renewed attacks on Saudi energy infrastructure, a risk premium is likely to stay on oil prices in the foreseeable future,” UBS analysts said in a note. Energy Minister Prince Abdulaziz bin Salman said on Tuesday that average oil production in September and October would be 9.89 million barrels per day and that the world’s top oil exporter would ensure full oil supply commitments to its customers this month.

Not sure Bill Barr is your man.

• Without Accountability, There Can Never Be Trust in Our Government (Cates)

The Watergate scandal, at its heart, was about political operatives working on behalf of the Nixon administration (informally known as “The Plumbers”) attempting to plant bugs in the phones of the Democratic National Committee (DNC) headquarters at the Watergate Hotel, so they could spy on key Democratic campaign communications. A little-remembered fact is that bugs had been successfully planted earlier; the burglars were returning to plant a new set in the phones because the first set never worked properly. It was during this second foray into DNC headquarters in the middle of the night that they were caught by an observant security guard.

So the Watergate scandal was based on an attempt to spy on political opponents, but no evidence ever surfaced that any successful spying was actually done. The first set of listening devices never functioned, and the operatives were caught while trying to replace them. That won’t be the case in the Spygate scandal, because this wasn’t an off-the-books dirty tricks group like The Plumbers running an operation against the Trump campaign. This was the federal government itself, making use of the official engines of its intelligence and law enforcement agencies and surveillance courts to spy on a political campaign and, then, a presidency. And it’s because this scandal is so much worse than Watergate that the persons responsible for it must be held accountable for their actions.

[..] The crimes here amount to a deliberate attempt to subvert the federal intelligence and law enforcement agencies and turn them into political engines of partisan policy to shield political friends and destroy political enemies. After covering up serious crimes committed by their political friends, these key government officials used their offices to manufacture crimes to use as a pretext to investigate and punish their political enemies. Unless this behavior is punished with the utmost severity, no one will ever be able to place trust in the federal government. The ball of accountability will soon end up in the court of U.S. Attorney General William Barr.

I for one have little faith in Congress in this case. Not that I have much faith in Congress in general.

• House Panel Asks Boeing CEO To Testify October 30 on 737 MAX (R.)

The U.S. House Transportation and Infrastructure Committee formally asked Boeing CEO Dennis Muilenburg on Tuesday to testify on the now grounded 737 MAX that has been involved in two deadly crashes since October 2018 that killed 346 people. The panel’s chair, Representative Peter DeFazio, also asked John Hamilton, the chief engineer of Boeing’s Commercial Airplanes division, to appear. Both executives have been asked to testify on Oct. 30. Last week, DeFazio asked Muilenburg to make several employees available for interviews as part of a congressional probe into the design, development and certification of 737 MAX aircraft. “Boeing has received the Committee’s invitation and is reviewing it now. We will continue to cooperate with Congress and regulatory authorities as we focus on safely returning the MAX to service,” a Boeing representative said in a statement.

But will they get them? Boeing will just claim they would reveal company secrets.

• Ethiopian Crash Victims Want 737 MAX Documents From Boeing, FAA (R.)

A lawyer for victims of Ethiopian Airlines Flight 302 said on Tuesday he wants Boeing Co and the U.S. Federal Aviation Administration to hand over documents about the decision to keep the Boeing 737 MAX in the air after a deadly Lion Air crash last October. A week after Lion Air Flight 610 nose-dived into the Java Sea, killing all 189 aboard, the FAA warned airlines that erroneous inputs from an automated flight control system’s sensors could lead the jet to automatically pitch its nose down, but the agency allowed the jets to continue flying. Five months later, the same system was blamed for playing a role when ET302 crashed on March 10, killing all 157 passengers and crew and prompting a worldwide grounding of the 737 MAX that remains in place.

“The decisions to keep those planes in service are key,” Robert Clifford of Clifford Law Offices, which represents families of the Ethiopian crash victims, said at a status hearing before U.S. Judge Jorge Alonso in Chicago. Nearly 100 lawsuits have been filed against Boeing by at least a dozen law firms representing families of the Ethiopian Airlines crash victims, who came from 35 different countries, including nine U.S. citizens and 19 Canadians. Families of about 60 victims have yet to file lawsuits but plaintiffs’ lawyers said they anticipate more to come. Most of the lawsuits do not make a specific dollar claim, though Ribbeck Law Chartered has said its clients are seeking more than $1 billion.

The entire Kavanaugh thing is empty, just two women trying to sell a book. Trump said he should sue them. But as a Supreme Court judge, perhaps he shouldn’t.

• Editorial Mistake My Ass (Mish)

As details emerge in the New York Times Kavanaugh scandal, it’s very clear the NYT repeatedly made serious errors On September 14, the New York Times resurrected unsubstantiated and graphic rumors about Supreme Court Justice Brett Kavanaugh in a purposeful smear article Brett Kavanaugh Fit In With the Privileged Kids. She Did Not. The article was by disgraced NYT authors Robin Pogrebin and Kate Kelly to promote their upcoming book “The Education of Brett Kavanaugh: An Investigation.” I do not normally report on sleaze but to understand what the NYT did, I have to. Here is one controversial paragraph: “We also uncovered a previously unreported story about Mr. Kavanaugh in his freshman year that echoes Ms. Ramirez’s allegation. A classmate, Max Stier, saw Mr. Kavanaugh with his pants down at a different drunken dorm party, where friends pushed his penis into the hand of a female student.”

The NYT later added this correction. “The book reports that the female student declined to be interviewed and friends say that she does not recall the incident. That information has been added to the article.” Making matters worse for itself, the NYT came out and blamed it all on an “editing error”. Reporters Robin Pogrebin and Kate Kelly said in an interview on MSNBC that they wrote in the draft of their Sunday Review piece that a woman who Kavanaugh was said to have exposed himself to while a student at Yale had told others she had no recollection of the alleged incident. Their editors, they say, removed the reference. “It was just sort of. . . in the haste of the editing process,” said Pogrebin.

But this is where the non-story leads to. Kamala seeks a way to reinvent her campaign, the rest just follows.

• Democrats Urge New Probe Of Kavanaugh, Impeachment Inquiry (R.)

U.S. Senator Kamala Harris on Tuesday urged a House of Representatives panel to investigate Supreme Court Justice Brett Kavanaugh, while a Democratic lawmaker filed an impeachment resolution in the wake of new allegations of sexual misconduct by the conservative judge when he was in college in the 1980s. The moves by Harris, one of 20 Democratic presidential candidates, and Representative Ayanna Pressley, a progressive on the left of the party, signaled impatience among some Democrats with congressional leaders unenthusiastic about pursuing Kavanaugh’s impeachment, though their efforts appeared unlikely to spur action.

Harris said in a letter to House Judiciary Committee Chairman Jerrold Nadler that the panel should “hold Mr. Kavanaugh accountable for his prior conduct and testimony.” Nadler on Monday faulted the FBI’s probe of prior sexual misconduct allegations against Kavanaugh ahead of his narrow confirmation by the Senate in October 2018, saying in a radio interview it “apparently was a sham.” But Nadler also said his panel had its “hands full” with investigating Republican President Donald Trump. In her letter to Nadler, Harris suggested the House Judiciary Committee could create a task force and retain outside counsel if it did not have the time or resources to pursue an inquiry of Kavanaugh now.

Harris and several other Democratic presidential candidates called for Kavanaugh’s impeachment after the New York Times published an essay over the weekend detailing what it described as a previously unreported incident of sexual misconduct by Kavanaugh. Others include former U.S. Housing and Urban Development Secretary Julian Castro; U.S. Senators Elizabeth Warren and Cory Booker; South Bend, Indiana Mayor Pete Buttigieg; and former U.S. Representative Beto O’Rourke.

Only a Five Eyes spy chief. And whaddaya know, there’s Bill Browder again. See from yesteday: The Magnitskiy Myth Exploded.

• Trudeau Reassures Allies Amid Alleged Spying Case (BBC)

Canadian Prime Minister Justin Trudeau has moved to reassure allies in the wake of an alleged spying case with possible international implications. A senior intelligence official was charged last week with violating national security laws. Cameron Ortis had access to information coming from Canada’s global allies, the RCMP national police force said. Canada is in close contact with its intelligence partners over the case, Mr Trudeau says. “We are in direct communications with our allies on security,” the prime minister said while campaigning in Newfoundland on Tuesday. “We are also working with them to reassure them, but we want to ensure that everyone understands that we are taking this situation very seriously.” Canada is a member of the Five Eyes – the intelligence alliance that also includes the US, UK, Australia and New Zealand.

Mr Ortis, who was a director general with the police force’s intelligence unit, is accused of breaching the Security of Information Act and the Criminal Code. The charges filed against him include the “unauthorised communication of special operational information”, possessing a device or software “useful for concealing the content of information or for surreptitiously communicating, obtaining or retaining information”, and breach of trust by a public officer. [..] Mr Ortis was looking into allegations that Russian tax fraudsters had laundered millions of dollars through Canada, a US financier told Reuters. Bill Browder, a high-profile critic of Russian President Vladimir Putin, said he had met Mr Ortis twice in Canada in 2017 after alerting the RCMP to the matter.

What exactly would you say is Facebook’s role in our society? How about in your life?

• Catastrophic Effects Of Working As A Facebook Moderator (G.)

They describe being ground down by the volume of the work, numbed by the graphic violence, nudity and bullying they have to view for eight hours a day, working nights and weekends, for “practically minimum pay”. A little-discussed aspect of Facebook’s moderation was particularly distressing to the contractors: vetting private conversations between adults and minors that have been flagged by algorithms as likely sexual exploitation. Such private chats, of which “90% are sexual”, were “violating and creepy”, one moderator said. “You understand something more about this sort of dystopic society we are building every day,” he added. “We have rich white men from Europe, from the US, writing to children from the Philippines … they try to get sexual photos in exchange for $10 or $20.”

Gina, a contractor, said: “I think it’s a breach of human rights. You cannot ask someone to work fast, to work well and to see graphic content. The things that we saw are just not right.” The workers, whose names have been changed, were speaking on condition of anonymity because they had signed non-disclosure agreements with Facebook. Daniel, a former moderator, said: “We are a sort of vanguard in this field … It’s a completely new job, and everything about it is basically an experiment.” John, his former colleague, said: “I’m here today because I would like to avoid other people falling into this hole. As a contemporary society, we are running into this new thing – the internet – and we have to find some rules to deal with it.

Pay him in Bitcoin.

• US Government Is Suing Edward Snowden For His Book Profits (Verge)

The Justice Department has filed a civil lawsuit against Edward Snowden that would recover all proceeds of his recently released memoir, the department announced on Tuesday. The charges coincide with the official publication of the book, which is titled Permanent Record. Snowden’s memoir was allegedly not submitted to the CIA or NSA for pre-publication review, a required practice among former employees of intelligence agencies. As such, the department considers the book a breach of Snowden’s fiduciary obligations, and names the publishers as co-defendants in the suit.

Given the still-classified programs and materials discussed in the memoir, it is unlikely that the book would have been approved for publication by the agencies. Snowden remains a de facto fugitive from the US government, and would likely face charges under the Espionage Act if he returned to the country. But the new civil case could nonetheless cause problems for Snowden, potentially enjoining his publishers from releasing any of the proceeds from the book. Crucially, the suit does not seek to block the release of Snowden’s memoir, as doing so would be illegal under the First Amendment.

From Notes on the Next War, 1935

Debt Rattle September 16 2019

Sep 162019

September 16, 2019 Posted by Raúl Ilargi Meijer at 9:20 am Finance Tagged with: Assange, China, drones, GM, Houthis, Iran, Israel, liquidity, oil, opioids, Saudi, subsidies 21 Responses »

Pablo Picasso Night fishing at Antibes 1939

• Oil Explodes 20% Higher, Biggest Jump On Record (ZH)

• Trump Says US ‘Locked And Loaded’ As Iran Blamed For Saudi Attack (AP)

• Liquidity Dies in Darkness (Rivelle)

• ‘Very Difficult’ For China’s Economy To Grow 6% Or Faster: Premier Li

• China’s August Industrial Output Growth Grinds To 17.5-Year Low (R.)

• General Motors Faces Strike By Almost 50,000 Staff (BBC)

• OxyContin Maker Purdue Pharma Files For Bankruptcy Protection (R.)

• Industrialized Militaries Are A Big Part Of The Climate Emergency (IC)

• Farming Subsidies Destroy The World (G.)

• The World’s Most Important Political Prisoner (Craig Murray)

It went down a little after, but then the war threats started.

• Oil Explodes 20% Higher, Biggest Jump On Record (ZH)

Shanghai Oil futures are halted limit up.

Source: Bloomberg

With traders in a state of near-frenzy, with a subset of fintwit scrambling (and failing) to calculate what the limit move in oil would be (hint: there is none for Brent), moments ago brent reopened for trading in the aftermath of Saturday’s attack on the “world’s most important oil processing plant”, and exploded some 20% higher, to a high of $71.95 from the Friday $60.22 close, its biggest jump since futures started trading in 1988. As Bloomberg notes, “for oil markets, it’s the single worst sudden disruption ever, surpassing the loss of Kuwaiti and Iraqi petroleum supply in August 1990, when Saddam Hussein invaded his neighbor. It also exceeds the loss of Iranian oil output in 1979 during the Islamic Revolution, according to data from the U.S. Department of Energy.”

Furthermore, in light of news that the Saudi outage could last for months, this could be just the start. As a reminder, according to Morningstar research director, Sandy Fielden, “Brent could go to $80 tomorrow, while WTI could go to $75… But that would depend on Aramco’s 48-hour update. The supply problem won’t be clear right away since the Saudis can still deliver from inventory.” Of course, should Aramco confirm that the outage – which has taken some 5.7mmb/d in Saudi output after 10 drones struck the world’s biggest crude-processing facility in Abqaiq and the kingdom’s second-biggest oil field in Khurais – will last for weeks, expect the crude juggernaut to continue until the price hits $80, and keeps moving higher.

Source: Bloomberg

Does any of this make any sense to you?

• Trump Says US ‘Locked And Loaded’ As Iran Blamed For Saudi Attack (AP)

The U.S. government produced satellite photos showing what officials said were at least 19 points of impact at two Saudi energy facilities, including damage at the heart of the kingdom’s crucial oil processing plant at Abqaiq. Officials said the photos show impacts consistent with the attack coming from the direction of Iran or Iraq, rather than from Yemen to the south. Iraq denied Sunday that its territory was used for an attack on the Kingdom and U.S. officials said a strike from there would be a violation of Iraq’s sovereignty. The U.S. officials said additional devices, which apparently didn’t reach their targets, were recovered northwest of the facilities and are being jointly analyzed by Saudi and American intelligence.

The officials, who spoke on condition of anonymity to discuss intelligence matters, did not address whether the drone could have been fired from Yemen, then taken a round-about path, but did not explicitly rule it out. The attacks and recriminations are increasing already heightened fears of an escalation in the region, after a prominent U.S. senator suggested striking Iranian oil refineries in response to the assault, and Iran warned of the potential of more violence. “Because of the tension and sensitive situation, our region is like a powder keg,” said Iranian Brig. Gen. Amir Ali Hajizadeh. “When these contacts come too close, when forces come into contact with one another, it is possible a conflict happens because of a misunderstanding.”

[..] “Amid all the calls for de-escalation, Iran has now launched an unprecedented attack on the world’s energy supply,” Pompeo wrote. “There is no evidence the attacks came from Yemen.” [..] U.S. officials previously alleged at least one recent drone attack on Saudi Arabia came from Iraq, where Iran backs Shiite militias. Those militias in recent weeks have been targeted themselves by mysterious airstrikes, with at least one believed to have been carried out by Israel. Iranian Foreign Ministry spokesman Abbas Mousavi on Sunday dismissed Pompeo’s remarks as “blind and futile comments.” “The Americans adopted the ‘maximum pressure’ policy against Iran, which, due to its failure, is leaning toward ‘maximum lies,’” Mousavi said in a statement.

“Trouble is, while loanable funds can be created without limit, the things that can be purchased with these funds is finite.”

• Liquidity Dies in Darkness (Rivelle)

If democracy dies in darkness, so does liquidity in that embodiment of economic democracy, i.e., the capital markets. When information is scarce, investors must color in between the lines. That which is not known nor well quantified must be assumed or modeled. The door is therefore open to different investors reaching quite different conclusions about the underlying value of an asset leading, of course, to illiquidity. More so perhaps than any other in history, this cycle is the wellspring of the theories and actions of the central bankers who, in their infinite wisdom, determined that they could model interest rates better than markets could price them. Central banks have flooded the system with what they call “liquidity” but which are actually nothing more–nor less–than electronically conjured “loanable funds.”

Under the banner of “doing whatever it takes,” trillions in loanable funds were created so that now $17 trillion in global debt is priced to yield less than nothing. The magic trick of inverting economic logic with negative rates results from the capacity of the central banks to create unlimited quantities of loanable funds at no cost. Trouble is, while loanable funds can be created without limit, the things that can be purchased with these funds is finite. But, “free money” not only makes loans cheap, it also erodes the capacity of lenders to ask for such reasonable terms as traditional loan covenants and basic financial disclosure.

Preparing the people for bad news?!

• ‘Very Difficult’ For China’s Economy To Grow 6% Or Faster: Premier Li

Chinese Premier Li Keqiang said it is “very difficult” for China’s economy to grow at a rate of 6% or more because of the high base from which it was starting and the complicated international backdrop. The world’s No.2 economy faced “certain downward pressure” due to slowing global growth as well as the rise of protectionism and unilateralism, Li said in an interview with Russian media which was published on the Chinese government’s website, gov.cn. China’s GDP grew 6.3% in the first half of the year, and Li said the economy was “generally stable” in the first eight months of the year.

“For China to maintain growth of 6% or more is very difficult against the current backdrop of a complicated international situation and a relatively high base, and this rate is at the forefront of the world’s leading economies,” Li was quoted as saying. Analysts say China’s economic growth has likely cooled further this quarter from a near 30-year low of 6.2% in April-June. Morgan Stanley says it is now tracking the lower end of the government’s full-year target range of around 6-6.5%.

4.4% it is.

• China’s August Industrial Output Growth Grinds To 17.5-Year Low (R.)

The slowdown in China’s factory and consumer sectors deepened in August, with industrial production growing at the weakest pace in 17-1/2 years, a sign of increasing weakness in an economy lashed by trade headwinds and soft domestic demand. Production rose 4.4% in August year-on-year, slower than the 4.8% growth in July. Analysts polled by Reuters had forecast output would rise 5.2%. August’s data is the slowest growth since February 2002. [..] The data also showed retail sales growth at 7.5%, below the 7.9% expected in a Reuters poll and the 7.6% increase in July.

Fixed-asset investment for the first eight months of the year rose 5.5%, according to data published by the National Bureau of Statistics, compared with a 5.6% rise forecast by analysts. Data last week showed factory-gate prices fell at their fastest pace in three years and analysts predict that producer deflation will continue to worsen in the coming months. It also follows a factory survey that showed activity shrank for the fourth straight month as the U.S. trade war dragged on. China’s imports of unwrought copper also fell 3.8% year-on-year in August, a metal with wide use in infrastructure, power and consumption.

America’s dying unions.

• General Motors Faces Strike By Almost 50,000 Staff (BBC)

Almost 50,000 General Motors workers have been called out on strike after the car giant failed to reach a pay and conditions deal with the United Auto Workers union (UAW). “We do not take this lightly. This is our last resort,” UAW vice-president Terry Dittes told reporters in Detroit. The sides had set a Saturday night deadline to reach agreement. The strike – from midnight (04:00 GMT) on Monday – is the first at GM, America’s biggest carmaker, since 2007. In that strike, a two-day stoppage cost $300m (£240m). The union’s previous four-year contract with GM expired this weekend, and the two sides had been holding negotiations on wide-ranging issues, including wages, healthcare, profit sharing, and job security.

Right after the Sackler family had transferred their billions to safe locations.

• OxyContin Maker Purdue Pharma Files For Bankruptcy Protection (R.)

OxyContin maker Purdue Pharma LP filed for bankruptcy protection Sunday night, succumbing to pressure from more than 2,600 lawsuits alleging the company helped fuel the deadly U.S. opioid epidemic. Purdue’s board met Sunday evening to approve the long-expected bankruptcy filing, which the company is pursuing to restructure under terms of a proposal to settle the widespread litigation. Purdue, which filed for Chapter 11 protection in a federal bankruptcy court in White Plains, New York, reached a tentative deal to resolve lawsuits with 24 states and five U.S. territories, as well as lead lawyers for more than 2,000 cities, counties and other plaintiffs, the company said.

Two dozen states remain opposed or uncommitted to the proposed settlement, setting the stage for contentious legal battles over who bears responsibility for a public health crisis that has claimed the lives of nearly 400,000 people between 1999 and 2017, according to the latest U.S. data. Thousands of cities and counties, along with nearly every state, have sued Purdue and, in some cases, its controlling Sackler family. The lawsuits, seeking billions of dollars in damages, claim the company and family aggressively marketed prescription painkillers while misleading doctors and patients about their addiction and overdose risks.

I’d rather have a look at overall pollution, not just emissions.

• Industrialized Militaries Are A Big Part Of The Climate Emergency (IC)

A British doctor who co-authored two studies on the environmental impact of U.S. military operations in Fallujah said that the city’s population suffers “the highest rate of genetic damage in any population ever studied.” Much of this impact can be blamed on the use of depleted uranium munitions by U.S. forces. Despite vowing to cease their use, a study by the independent monitoring group Airwars and Foreign Policy Magazine found that the military continued to use the toxic munitions during its most recent bombing campaign in Syria. The fact that fossil fuel emissions have been the major driver of climate change adds another grim irony to these wars.

For decades, the heavy U.S. military footprint in the Middle East has been justified by the need to preserve access to the region’s oil reserves. The industrial extraction of those same reserves has been one of the major drivers of global carbon dioxide emissions. In other words, we have been killing, dying, and polluting to ensure our access to the same toxic resource most responsible for our climate disruption. It took this perfect symmetry between industrial warfare and industrial exploitation of the earth to bring about the unspeakable emergency we now face.

$1 million every minute. And look at the sugary crap we’re eating.

• Farming Subsidies Destroy The World (G.)

The public is providing more than $1m per minute in global farm subsidies, much of which is driving the climate crisis and destruction of wildlife, according to a new report. Just 1% of the $700bn (£560bn) a year given to farmers is used to benefit the environment, the analysis found. Much of the total instead promotes high-emission cattle production, forest destruction and pollution from the overuse of fertiliser. The security of humanity is at risk without reform to these subsidies, a big reduction in meat eating in rich nations and other damaging uses of land, the report says. But redirecting the subsidies to storing carbon in soil, producing healthier food, cutting waste and growing trees is a huge opportunity, it says.

The report rejects the idea that subsidies are needed to supply cheap food. It found that the cost of the damage currently caused by agriculture is greater than the value of the food produced. New assessments in the report found producing healthy, sustainable food would actually cut food prices, as the condition of the land improves. “There is incredibly small direct targeting of [subsidies at] positive environment outcomes, which is insane,” said Jeremy Oppenheim, principal at the Food and Land Use Coalition (Folu), the collaboration of food, farming and green research groups that produced the new report. “We have got to switch these subsidies into explicitly positive measures.”

He said the true global total was likely to be $1tn a year, as some subsidies are difficult to quantify precisely: “That trillion dollars of public funding is available and is a massive, massive lever to incentivise the farming community across the world to act differently.”

“..all the excuses for Assange’s imprisonment which so-called leftists and liberals in the UK have hidden behind will evaporate.”

• The World’s Most Important Political Prisoner (Craig Murray)

We are now just one week away from the end of Julian Assange’s uniquely lengthy imprisonment for bail violation. He will receive parole from the rest of that sentence, but will continue to be imprisoned on remand awaiting his hearing on extradition to the USA – a process which could last several years. At that point, all the excuses for Assange’s imprisonment which so-called leftists and liberals in the UK have hidden behind will evaporate. There are no charges and no active investigation in Sweden, where the “evidence” disintegrated at the first whiff of critical scrutiny. He is no longer imprisoned for “jumping bail”.

The sole reason for his incarceration will be the publishing of the Afghan and Iraq war logs leaked by Chelsea Manning, with their evidence of wrongdoing and multiple war crimes. In imprisoning Assange for bail violation, the UK was in clear defiance of the judgement of the UN Working Group on arbitrary Detention, which stated:

“Under international law, pre-trial detention must be only imposed in limited instances. Detention during investigations must be even more limited, especially in the absence of any charge. The Swedish investigations have been closed for over 18 months now, and the only ground remaining for Mr. Assange’s continued deprivation of liberty is a bail violation in the UK, which is, objectively, a minor offense that cannot post facto justify the more than 6 years confinement that he has been subjected to since he sought asylum in the Embassy of Ecuador. Mr. Assange should be able to exercise his right to freedom of movement in an unhindered manner, in accordance with the human rights conventions the UK has ratified,”

In repudiating the UNWGAD the UK has undermined an important pillar of international law, and one it had always supported in hundreds of other decisions. The mainstream media has entirely failed to note that the UNWGAD called for the release of Nazanin Zaghari-Ratcliffe – a source of potentially valuable international pressure on Iran which the UK has made worthless by its own refusal to comply with the UN over the Assange case. Iran simply replies “if you do not respect the UNWGAD then why should we?”

Debt Rattle September 15 2019

Sep 152019

September 15, 2019 Posted by Raúl Ilargi Meijer at 9:26 am Finance Tagged with: Airbus, Assange, Boris, deforestation, drones, Houthis, Iran, Israel, oil, Pompeo, Putin, Repubblica, Saudi, tariffs, Trump 9 Responses »

Marcel Duchamp About young sister 1911

• Israeli Attacks On Syria Halted After Russian Threat To Shoot Down Jets (ZH)

• US, Israel Talk About Mutual Defense Treaty – Trump (RT)

• Netanyahu’s Plan to Escape Trial (Haaretz)

• US Blames Saudi Oil Strikes On Iran, Not Houthis (BBC)

• Global Spare Oil Capacity In US Hands After Saudi Outage (R.)

• US Stands Ready To Tap Emergency Oil Reserve After Saudi Attacks (R.)

• London Upper Tribunal Rejects La Repubblica’s Assange Docs Appeal (Maurizi)

• Johnson Is A Liar Who Only Backed Leave To Help His Career – Cameron (G.)

• US To Hit EU With Billions In Tariffs After Victory In Airbus Case (Pol.eu)

• Italy’s New Government Lets Charity Ship Head To Italian Port (R.)

• World ‘Losing Battle Against Deforestation’ (BBC)

• The Spy Who Failed (Ritter)

What Putin tells Netanyahu, he also tells Trump at the same moment. A red line in the sand. This is the new world order.

• Israeli Attacks On Syria Halted After Russian Threat To Shoot Down Jets (ZH)

According to reports in both Israeli and Arabic regional media, Israel this past week was preparing to expand major airstrikes against “Iran-backed” targets in Syria, but Moscow imposed its red line. The Independent has published a story describing that Russia’s military in Syria threatened to shoot down any invading Israeli warplanes using fighter jets or their S-400 system. The Jerusalem Post, citing sources in the UK Independent (Arabia), writes just after the latest meeting in Sochi between Prime Minister Benjamin Netanyahu and Russian President Vladimir Putin: “According to the report, Moscow has prevented three Israeli airstrikes on three Syrian outposts recently, and even threatened that any jets attempting such a thing would be shot down, either by Russian jets or by the S400 Anti-aircraft missiles.

The source cited in the report claims a similar situation has happened twice, and that during August, Moscow stopped an airstrike on a Syrian outpost in Qasioun, where a S300 missile battery is placed.” Netanyahu’s hasty trip to meet with Putin on Thursday – even in the final days before Tuesday’s key election – was reportedly with a goal to press the Russian president on essentially ignoring Israel’s attacks in Syria. Citing further sources in the British-Arabic Independent Arabia, The Jerusalem Post continues: According to the Russian source, Putin let Netanyahu know that his country will not allow any damage to be done to the Syrian regime’s army, or any of the weapons being given to it… Israel sources cited by the Arabic newspaper described Netanyahu’s attempts to persuade Putin as “a failure”. This in spite of Netanyahu telling reporters after the meeting that his relations with Moscow were stronger than ever.

Israel is going to defend the US?

• US, Israel Talk About Mutual Defense Treaty – Trump (RT)

The US and Israel are discussing a mutual defense treaty that would further cement the already “tremendous” alliance between the two countries, President Donald Trump has revealed. “I had a call today with Prime Minister Netanyahu to discuss the possibility of moving forward with a Mutual Defense Treaty, between the United States and Israel, that would further anchor the tremendous alliance between our two countries,” Trump tweeted. Trump voiced not-that-veiled support for Benjamin Netanyahu ahead of the upcoming parliamentary elections in Israel. “I look forward to continuing those discussions after the Israeli Elections when we meet at the United Nations later this month!” Trump wrote.

The support surely comes in handy, as Netanyahu’s backing appears to be quite shaky. The September 17 polls are the second snap legislative elections this year after Netanyahu failed to form the government back in April. The outcome of the upcoming vote is hard to predict, as Netanyahu’s party, Likud, has almost equal support as their main opponent the Blue and White led by Benny Gantz, opinion polls show. Netanyahu was quick to respond to Trump’s announcement, lauding the prospects of the alliance and managing to call the US president a “friend” twice in a single tweet.

Netanyahu wanted to bomb Syria to support himself in the Sep 17 Knesset elections. Putin said we’ll shoot down your jets.

Netanyahu needs victory in the election to keep himself out of jail. He may be indicted by mid-October. Trump might want to reconsider who he’s friends with.

• Netanyahu’s Plan to Escape Trial (Haaretz)

Immediately after the last election, Prime Minister Benjamin Netanyahu outlined to members of his inner circle a plan to extract him from facing trial. The plan was based on obtaining immunity from the Knesset and passing legislation to prevent the High Court of Justice from removing that immunity. If his bloc wins 61 Knesset seats next week, Netanyahu will presumably resort to this rescue plan. For him it will be the Day of Judgment. “Stop being frightened. It’s time for them to be frightened,” Netanyahu told his confidants, referring to justice officials, headed by Attorney General Avichai Mendelblit and State Prosecutor Shai Nitzan, who have decided to indict him in three cases, subject to a hearing.

Netanyahu told his confidants why he insisted on his destructive plan, telling them he had lost all confidence in the legal system on all levels – the attorney general’s office, the state prosecutor and the court system. “They want me in prison,” he told one of his cronies, noting that if he were indicted that would indeed be the result – not because he had crossed a red line, but merely due to the jurists’ collective hostility toward him and his ideology. Netanyahu appears to wholeheartedly believe himself to be a victim, framed by prosecutors and that Mendelblit, who is weak, doesn’t believe in them at all, but couldn’t withstand the pressure.

In his interviews with the police Netanyahu acted like a hunted man. “It’s a wacky conception,” he told national fraud squad chief Koresh Bar-Nur in January 2017. Bar-Nur came to Netanyahu’s residence with a team of investigators to question him under caution on Case 2000, involving a bribery deal Netanyahu allegedly negotiated with Yedioth Ahronoth publisher Arnon “Noni” Mozes.

Trump was talking about lifting sanctions on Iran and then this happens?! That smells like Assad attacking his own people with chlorine just as things were getting better.

• US Blames Saudi Oil Strikes On Iran, Not Houthis (BBC)

US Secretary of State Mike Pompeo has blamed Iran for Saturday’s drone attacks on Saudi oil facilities. He dismissed a claim by Yemeni Houthi rebels that they had attacked the two facilities, run by state-owned company Aramco. Saudi Arabia’s energy minister said the strikes had reduced crude oil production by 5.7 million barrels a day – about half the kingdom’s output. Correspondents say they could have a significant impact on world oil prices. TV footage showed a huge blaze at Abqaiq, site of Aramco’s largest oil processing plant, while a second drone attack started fires in the Khurais oilfield. The Saudis lead a Western-backed military coalition supporting Yemen’s government, while Iran backs the Houthi rebels.

If the rebels were responsible for the attacks, their drones would have had to fly hundreds of miles from Yemen into central Saudi Arabia. Meanwhile experts are investigating whether the attacks could have been carried out from the north – either by Iran or its Shia allies in Iraq – using cruise missiles rather than drones, the Wall Street Journal reports. Tensions between the US and Iran have escalated in recent months. since US President Donald Trump abandoned a deal limiting Iran’s nuclear activities last year and reinstated sanctions. In a tweet, Mr Pompeo said there was “no evidence” the drones came from Yemen. He described the attack as “an unprecedented attack on the world’s energy supply”.

The US and Saudi Aramco (its IPO is near) stand to gain most if oil prices shoot up.

• Global Spare Oil Capacity In US Hands After Saudi Outage (R.)

An attack on Saudi oil facilities on Saturday is believed to have disrupted half the country’s production capacity, making the United States the only real holder of the global supply cushion via its ability to raise own output or to soften sanctions against other major oil producers. Saudi Arabia has yet to comment on the extent of damage on its oil production but industry sources have said some 5-6 million barrels per day (bpd) or 5-6% of global supply have been affected. Saudi Arabia, the Organization of the Petroleum Exporting Countries’ de-facto leader and largest producer, has been long seen as the custodian of the world’s spare oil capacity.

Spare capacity is the extra oil a producing country can bring onstream and sustain at short notice, providing global markets with a cushion in the event of natural disaster, conflict or any other cause of an unplanned supply outage. Industry sources have said Saudi Arabia will be able to restore supply within days. A prolonged supply outage will have a major bullish impact on oil prices, which in turn will spur further gains in U.S. shale production. The United States has briefly overtaken Saudi Arabia as the world largest crude exporter this year, only a few years after removing a ban on oil exports because of large needs at home as the world’s largest oil consumer.

Analysts have repeatedly underestimated U.S. output growth gains with the country now producing around 15% of global supply. Besides the United States, the only countries which have significant spare capacity are Iran and Venezuela.

Only to replace it with much more expensive oil?

• US Stands Ready To Tap Emergency Oil Reserve After Saudi Attacks (R.)

The Trump administration is prepared to tap U.S. emergency oil reserves if necessary after drone attacks shut oil output in Saudi Arabia, the world’s largest crude exporter, a Department of Energy spokeswoman said. Energy Secretary Rick Perry “stands ready to deploy resources from the Strategic Petroleum Oil Reserves if necessary to offset any disruptions to oil markets as a result of this act of aggression,” spokeswoman Shaylyn Hynes said. Yemen’s Iran-aligned Houthi group claimed credit for Saturday’s attacks on two plants at the heart of Saudi Arabia’s oil industry, including the world’s biggest petroleum processing facility Abqaiq.

Perry directed department leaders to work with the Paris-based International Energy Agency (IEA) “on potential available options for collective global action if needed,” Hynes said. The IEA said on Twitter earlier in the day that it was in contact with Saudi authorities and other major oil-producing nations, and that markets for now are well-supplied. The United States has occasionally coordinated with the IEA on collective draw downs of oil from international reserves. The SPR, held in heavily-guarded underground storage caverns on the Texas and Louisiana coasts, currently holds nearly 645 million barrels, or about the amount the United States consumes in a month.

Where are the British people protesting this?

• London Upper Tribunal Rejects La Repubblica’s Assange Docs Appeal (Maurizi)

The press does not have the right to access the full set of documents on the Julian Assange case. That is what judge Edward Mitchell finally ruled in an appeal taken to the London Upper Tribunal by la Repubblica, after we have spent the last four years trying to access the full documentation to investigate the Assange case and factually reconstruct it.

In an extremely technical judgement just made public and which the judge himself characterises as “unusually long”, Mitchell rejects our legal arguments and states that he believed public knowledge of Mr Assange’s case would not have increased if it was known that the CPS held information from the US State Department or Department of Justice. A rather incredible argument considering that the entire Assange case revolves around the role of the United States authorities, who want to get their hands on the WikiLeaks founder, extradite him to the US and jail him for life: establishing whether the British and US authorities discussed this possibility from the very beginning is crucial.

[..]Our attempt to access the documents has been hindered and hugely delayed in every jurisdiction. However, the very few documents we have obtained so far have allowed us to unearth crucial information. They provide indisputable evidence of the UK’s role in helping to create the legal and diplomatic quagmire which kept Julian Assange arbitrarily detained since 2010, as established by the United Nations Working Group on Arbitrary Detention (UNWGAD). In fact, it was the UK Crown Prosecution Service which advised the Swedish prosecutors against the only judicial strategy that could have brought the Swedish rape investigation to a quick closure: questioning Assange in London, rather than trying to extradite him to Stockholm. It was the Crown Prosecution Service which tried to dissuade the Swedish prosecutors from dropping the case in 2013. Finally, it was the Crown Prosecution Service that wrote to its Swedish counterpart: “Please do not think that the case is being dealt with as just another extradition request” and destroyed crucial documents, even though the case is still ongoing and very controversial.

When we tried to shed light on these facts, to understand why the British authorities acted this way and why the Assange case was not “just another extradition request”, we ran up against a true rubber wall, so much so that we were forced to sue the Crown Prosecution Service. Our first appeal to the London First-tier Tribunal was rejected: the judge established that the press has no right to access the documentation, because the need for the British authorities to protect the confidentiality of the extradition process outweighs the public interest of the press to know. Today, Judge Edward Mitchell has rejected our appeal to the Upper Tribunal. At this point it is not clear who will be able to introduce some transparency and oversight in the Assange case, considering that the press is not allowed to do so.

Selling a book.

• Johnson Is A Liar Who Only Backed Leave To Help His Career – Cameron (G.)

Boris Johnson is a liar who only backed the Leave campaign to help his career and Michael Gove was a “foam-flecked Faragist” whose “one quality” was disloyalty, David Cameron writes in his memoirs. The former prime minister poured vituperation on both his former colleagues Priti Patel, the current home secretary, and Dominic Cummings, the No 10 adviser, in extracts from the book published on Sunday. In what may be Cameron’s most explosive allegation yet, he effectively accused Boris Johnson of mounting a racist election campaign by focusing on Turkey and its possible accession to the EU. “It didn’t take long to figure out Leave’s obsession,” he writes. “Why focus on a country that wasn’t an EU member?

“The answer was that it was a Muslim country, which piqued fears about Islamism, mass migration and the transformation of communities. It was blatant.” Then Cameron echoes the explicitly racist Conservative campaign slogan used in Smethwick in 1964: “They might as well have said: ‘If you want a Muslim for a neighbour, vote “remain”.’” In Smethwick, Peter Griffiths had been elected as Conservative MP on the slogan “If you want a n**** for a neighbour, vote Labour.” Cameron writes that Johnson’s claims of concerns about British sovereignty were “secondary to another concern for Boris: what was the best outcome for him?”

Get ready for more fun.

• US To Hit EU With Billions In Tariffs After Victory In Airbus Case (Pol.eu)

The United States has gotten the green light to impose billions of euros in punitive tariffs on EU products in retaliation for illegal subsidies granted to European aerospace giant Airbus. Four EU officials told POLITICO that the World Trade Organization ruled in favor of the U.S. in the long-running transatlantic dispute and sent its confidential decision to Brussels and Washington on Friday. The decision means that U.S. President Donald Trump will almost certainly soon announce tariffs on European products ranging from cheeses to Airbus planes. One official said Trump had won the right to collect a total of between €5 billion and €8 billion. Another said the maximum sum was close to $10 billion.

The decision sets the stage for a showdown between Europe and Washington just as the EU is transitioning to new leadership under incoming Commission President Ursula von der Leyen and Trade Commissioner-designate Phil Hogan. In unveiling her team on Tuesday, von der Leyen signaled a robust approach to transatlantic disputes on trade and other issues with the Trump administration. aWashington has previously announced it would follow through with tariffs if it won the case in Geneva and has prepared a list of EU exports worth a total of $21 billion. The U.S. can choose products from that list and then tax them at different rates in order to claw back the total amount of damage resulting from the EU subsidies.

After EU nations agreed to take the refugees.

• Italy’s New Government Lets Charity Ship Head To Italian Port (R.)

Italy’s new government allowed a French charity ship to bring ashore 82 migrants on Saturday in an apparent reversal of the uncompromising, closed-door policy of the previous administration. However, Foreign Minister Luigi Di Maio, who heads the 5-Star Movement in the governing coalition, said the Ocean Viking was only being given access to the southern island of Lampedusa because other European states had agreed to take in many of those on board. The government formally took office on Tuesday, promising a fresh approach to migration following the hardline clampdown on rescue ships introduced by former interior minister Matteo Salvini, who heads the far-right League.

Prime Minister Giuseppe Conte said on Thursday that “several EU countries” had agreed to take in the Africans aboard the Ocean Viking but did not give further details. The ship is run by French charities SOS Mediterranee and Doctors Without Borders. It picked up the migrants off Libya earlier this week and had asked both Italy and Malta for permission to dock. Recent such requests from other boats had been rejected, leaving migrants stranded at sea for prolonged periods. The center-left Democratic Party (PD), which has replaced the League in the ruling coalition, applauded the announcement that the vessel had been given access to Lampedusa.

As long as it pays more to cut and burn trees than to grow them or just leave them alone, this is inevitable.

• World ‘Losing Battle Against Deforestation’ (BBC)

A historic global agreement aimed at halting deforestation has failed, according to a report. An assessment of the New York Declaration on Forests (NYDF) says it has failed to deliver on key pledges. Launched at the 2014 UN climate summit, it aimed to half deforestation by 2020, and halt it by 2030. Yet deforestation continues at an alarming rate and threatens to prevent the world from preventing dangerous climate change, experts have said. The critique, compiled by the NYDF Assessment Partners (a coalition of 25 organisations), painted a bleak picture of how the world’s forests continue to be felled.

“Since the NYDF was launched five years ago, deforestation has not only continued – it has actually accelerated,” observed Charlotte Streck, co-founder and director of Climate Focus, which co-ordinated the publication of the report. The report says the amount of annual carbon emissions resulting from deforestation around the globe are equivalent to the greenhouse gases produced by the European Union. On average, an area of tree cover the size of the United Kingdom was lost every year between 2014 and 2018. Tropical forest loss accounts for more than 90% of global deforestation, with the hotspot being located in Amazon Basin nations of Bolivia, Brazil, Colombia and Peru.

Your must read for the Sunday. Excellent. You’ll know a lot more about the CIA in Moscow, and in the US elections.

• The Spy Who Failed (Scott Ritter)

Oleg Smolenkov was a controlled asset of the CIA. While he was given certain latitude on what information he could collect, generally speaking Smolenkov worked from an operations order sent to him by his CIA controllers which established priorities for intelligence collection based upon information provided by Smolenkov about what he could reasonably access. Before tasking Smolenkov, his CIA handlers would screen the request from an operational and counterintelligence perspective, conducting a risk-reward analysis that weighed the value of the intelligence being sought with the possibility of compromise. Only then would Smolenkov be cleared to collect the requested information.

It is not publicly known what prompted the report from Smolenkov which Brennan found so alarming. Was it received out of the blue, a target of opportunity which Smolenkov exploited? Was it based upon a specific tasking submitted by Smolenkov’s CIA handlers in response to a tasking from above? Or was it a result of the intervention of the CIA director, who tasked Smolenkov outside normal channels? In any event, once Brennan created his special analytical unit, Smolenkov became his dedicated source. If Smolenko was in this for the money, as appears to be the case, he would have been motivated to come up with the “correct” answer to Brennan’s tasking for information on Putin’s role. By late 2016, Western media had made quite clear what kind of answer Brennan wanted.

Every intelligence report produced by a controlled asset is subjected to a counterintelligence review where it is examined for any evidence of red flags that could be indicative of compromise. One red flag is the issue of abnormal access. Smolenkov did not normally have direct contact with Putin, if ever. His intelligence reports would have been written from the perspective of the distant observer. His report about Putin’s role in interfering in the 2016 election, however, represented a whole new level of access and trust. Under normal circumstances, a report exhibiting such tendency would be pulled aside for additional scrutiny; if the report was alarming enough, the CIA might order the agent to be subjected to a polygraph to ensure he had not been compromised.

Debt Rattle July 29 2019

Jul 292019

July 29, 2019 Posted by Raúl Ilargi Meijer at 8:41 am Finance Tagged with: Assange, Boeing, Boris, Brexit, China, entrapment, insulin, Melzer, oil, Papadopoulos, poverty, Ratcliffe 14 Responses »

Odilon Redon Fallen angel 1872

• A New US Oil Production Peak Looks Imminent (Robert Rapier)

• China’s Wobbly Giants (Fortune)

• Business Lobby Group CBI Says UK, EU Not Ready For No-Deal Brexit (BBC)

• Johnson Told No-Deal Brexit Will Crush Domestic Policy Plans (G.)

• More Than 4 Million In UK Are Trapped In Deep Poverty (G.)

• Ratcliffe Tapped To Replace Coats As US Spy Chief (R.)

• Work On Production Line Of Boeing 737 MAX ‘Not Adequately Funded’ (BBC)

• Insulin Is Our Oxygen: Bernie Sanders Rides Another Campaign Bus To Canada (G.)

• Papadopoulos To Head To Greece To Retrieve $10,000 Payment (Fox)

• US Wants To ‘Make An Example’ Of Assange In Jail, UN Expert Claims (SMH)

Cheap money blows bubbles, but…

• A New US Oil Production Peak Looks Imminent (Robert Rapier)

The resurgence of U.S. oil production over the past decade diminished OPEC’s control of the global oil markets. In less than eight years, U.S. oil production climbed from under 6 million barrels per day (BPD) to more than 12 million BPD. This surge is arguably the only reason oil prices today aren’t above $100/barrel (bbl). OPEC’s current strategy seems to be to wait for U.S. production to begin declining so they can begin to regain control of the oil markets. They may not have to wait all that long.

In last week’s article, I covered the slowdown in oil production growth in the Permian Basin. This is the most important oil-producing region in the U.S., but of course it isn’t the only one. And while most of the coverage of the resurgence of U.S. oil production has been primarily focused on shale oil and tight oil, U.S. offshore oil production has also made a big jump. Over the past decade, Gulf Coast oil production in the U.S. rose from about 1.2 million BPD to about 2.0 million BPD.

Thus, I thought today it might be instructive to look at the trends in total U.S. oil production. Note that in the previous graphic, it looks like production may be starting to turn down right at the end of the time frame. In fact, the Energy Information Administration (EIA) has reported a slight downward trend in U.S. oil production since May. The key question is whether this is an anomaly, or the beginning of a sustained trend. Applying the same analysis that I did last week to Permian Basin production – which looked at year-over-year production changes – it becomes clear that overall U.S. production growth is declining even faster than Permian Basin production growth.

“.. state-owned enterprises account for 80% of the revenue generated by Chinese companies..”

• China’s Wobbly Giants (Fortune)

In China, publication of the Fortune Global 500 has become a major media event. Companies advancing even a place or two rush out press releases. Those making the list for first time bask in the achievement; this year’s most notable Chinese debutant, smartphone maker Xiaomi, celebrated by doling out $24 million in stock to its 20,000 employees. The 2019 list gives Chinese firms something special to crow about: the number of Chinese firms rose to a record 129, including 10 from Taiwan, overtaking the 121 firms from the United States.

[..] the most striking characteristic of China’s presence on the Global 500 remains the overwhelming—and growing—dominance of state-owned firms. A calculation by Hong Kong’s South China Morning Post found that, if firms from Hong Kong and Taiwan are excluded, state-owned enterprises account for 80% of the revenue generated by Chinese companies on the 2019 list, up from 76% last year. Derek Scissors, resident scholar at the American Enterprise Institute, argues the prevalence of state-owned behemoths among Chinese firms “reveals more weakness than strength.”

He questions whether firms like Ping An Insurance Group (No. 29) and Huawei Technologies (No. 61) are truly private; doubts the veracity of financial results reported by China’s state-owned firms; and notes that Chinese SOEs are mostly sleepy monopolies. The vast revenue of state-owned Chinese companies on the Fortune 500, he concludes, “primarily represents waste.” Former Financial Times China correspondent Richard McGregor offers a more nuanced explanation for the ascendance of China’s state-owned giants in his new book Xi Jinping: The Backlash. For China watchers, the entire book is a must-read, but this excerpt published recently in The Guardian, summarizes Richard’s account of how and why Xi sought to bolster state-owned enterprises at the expense of private enterprise.

What is it, 100 days until Halloween?!

• Business Lobby Group CBI Says UK, EU Not Ready For No-Deal Brexit (BBC)

The Confederation of British Industry (CBI) has warned the government that neither the UK nor the EU is ready for a no-deal Brexit on 31 October. “While the UK’s preparations to date are welcome, the unprecedented nature of Brexit means some aspects cannot be mitigated,” said the CBI. It has published practical steps it says the UK, EU and firms can take. A government spokesman said the UK has increased the pace of planning for no-deal. The CBI had previously said leaving the EU with a deal was essential to protect the economy and jobs. New Prime Minister Boris Johnson has made Michael Gove responsible for planning a no-deal Brexit. Mr Gove has said the UK government is currently “working on the assumption” of a no-deal Brexit.

He said his team still aimed to come to an agreement with Brussels but, writing in the Sunday Times, he added: “No deal is now a very real prospect.” The CBI’s report What Comes Next? The Business Analysis Of No Deal Preparations advises what measures businesses can take to reduce the worst effects. The advice is based on a study of existing plans laid out by the UK government, European Commission, member states and firms. “And although businesses have already spent billions on contingency planning for no deal, they remain hampered by unclear advice, timelines, cost and complexity,” the CBI says. “Larger companies, particularly those in regulated areas such as financial services, have well-thought-through contingency plans in place, though smaller firms are less well prepared.”

They’re stuck on the backstop: “Johnson may well find that having left one political union, he spends an increasing proportion of his time trying to keep another together..”

• Johnson Told No-Deal Brexit Will Crush Domestic Policy Plans (G.)

Boris Johnson’s ambitious domestic agenda would be crushed by the pressing needs of the emergency that would follow a no-deal Brexit, a new report by a Whitehall thinktank has concluded. The Institute for Government (IfG) warned there is “no such thing as a managed no deal” and the hard Brexiters predictions of a “clean break” from the EU will not materialise. Johnson will begin his first full week in Downing Street by ramping up planning for the possibility of a no-deal Brexit on 31 October, with more than £1bn to be announced within days for preparations by Sajid Javid, the chancellor. He sent out a raft of cabinet ministers over the weekend to talk about “turbo-charging” preparations as part of a publicity blitz, making clear that the UK will be heading for no deal unless EU leaders agree to replace the Irish backstop.

The new prime minister is also heading to Scotland, Wales and Northern Ireland in the coming days to promise to “strengthen the union”, but he faces a difficult meeting with Ruth Davidson, the Scottish Conservative leader, on Monday as she warned over the weekend that she cannot sign up to his no-deal Brexit strategy. In its report on no deal, the IfG predicted that the union of the United Kingdom would come under “unprecedented pressure” in the event of a no-deal Brexit, with Northern Ireland “most acutely affected”. It said that legislation to introduce direct rule in Northern Ireland with immediate effect would be needed to get through a no-deal Brexit if the devolved government is not restored by the end of October. “Johnson may well find that having left one political union, he spends an increasing proportion of his time trying to keep another together,” it said.

[..] In another sign of the uncertainty Johnson faces, the owner of Vauxhall warned on Sunday that it will close its Ellesmere Port plant with the loss of 1,000 jobs if Brexit renders it unprofitable. “No deal is a step into the unknown: the prime minister’s second 100 days will be even more unpredictable than his first,” the report says, adding that the EU is unlikely to agree to negotiate any “side deals” to soften the impact. “Rather than ‘turbo-charging’ the economy, as Johnson has suggested, the government is more likely to be occupied with providing money and support to businesses and industries that have not prepared or are worst affected by a no-deal Brexit – as well as dealing with UK citizens in the EU, and EU citizens here, who have been similarly caught out,” it says.

[..] Dominic Cummings, the mastermind behind Vote Leave, who has been hired as Johnson’s special adviser, has been tasked with delivering Brexit “by any means necessary”. In a meeting with fellow special advisers, he made it clear that he believes No 10 can outmanoeuvre parliamentary critics of no deal and force Brexit to happen by 31 October. However, leading former cabinet ministers – Philip Hammond, David Gauke and Rory Stewart – are all preparing to join the cross-party battle to make sure parliament has a say on the form of the UK’s departure. One source close to the group said Cummings’s confidence of being able to proceed with a no deal if necessary was “misplaced”, while another former cabinet minister described the senior No 10 adviser as a “master of disinformation and spin”.

While all attention and funding goes towards Brexit…

• More Than 4 Million In UK Are Trapped In Deep Poverty (G.)

More than 4 million people in the UK are trapped in deep poverty, meaning their income is at least 50% below the official breadline, locking them into a weekly struggle to afford the most basic living essentials, an independent study has shown. The Social Metrics Commission also said 7 million people, including 2.3 million children, were affected by what it termed persistent poverty, meaning that they were not only in poverty but had been for at least two of the previous three years. Highlighting evidence of rising levels of hardship in recent years among children, larger families, lone parent households and pensioners, the commission urged the new prime minister, Boris Johnson, to take urgent action to tackle growing poverty.

The commission’s chair, Philippa Stroud, a Conservative peer, said there was a pressing need for a concerted approach to the problem. “It is time to look again at our approach to children, and to invest in our children as the future of our nation,” she said. Campaigners said the commission showed austerity had undermined two decades of anti-poverty policy. “By cutting £40bn a year from our work and pensions budget through cuts and freezes to tax credits and benefits, the government has put progress into reverse,” said Alison Garnham, the chief executive of Child Poverty Action Group.

He was strong in the Mueller hearing.

• Ratcliffe Tapped To Replace Coats As US Spy Chief (R.)

U.S. President Donald Trump said on Sunday he would nominate Representative John Ratcliffe, a Texas Republican who strongly defended him at a recent congressional hearing, to replace Dan Coats as the U.S. spy chief. Coats, the current U.S. director of national intelligence who has clashed with Trump over assessments involving Russia, Iran and North Korea, will step down on Aug. 15, the president said as he announced his decision on Twitter. “John will lead and inspire greatness for the Country he loves,” Trump said, thanking Coats “for his great service to our Country” and saying an acting director will be named shortly. The post of director of national intelligence, created after the Sept. 11, 2001 attacks on the United States, oversees the 17 U.S. civilian and military intelligence agencies, including the CIA.

Ratcliffe, a member of the House of Representatives intelligence and judiciary committees, defended Trump during former Special Counsel Robert Mueller’s testimony on Wednesday about his two-year investigation of Russian interference in the 2016 presidential election and possible obstruction of justice. Ratcliffe also accused Mueller of exceeding his authority in the report’s extensive discussion of potential obstruction of justice by Trump after the special counsel decided not to draw a conclusion on whether Trump committed a crime. The congressman agreed that Trump was not above the law, but said the president should not be “below the law” either.

“My family won’t fly on a 737 Max.”

• Work On Production Line Of Boeing 737 MAX ‘Not Adequately Funded’ (BBC)

A former Boeing engineer has told the BBC’s Panorama programme that work on the production line of the 737 Max plane was not adequately funded. The aircraft is currently grounded after two crashes which killed 346 people. The 737 Max is the company’s fastest selling plane and has earned the company billions of dollars in sales. Boeing denies the claims and says it’s committed to making the 737 Max one of the safest aircraft ever to fly. Adam Dickson worked at Boeing for 30 years and led a team of engineers who worked on the 737 Max. He said they were under constant pressure to keep costs down. “Certainly what I saw was a lack of sufficient resources to do the job in its entirety,” he says. “The culture was very cost centred, incredibly pressurised. Engineers were given targets to get certain amount of cost out of the aeroplane.”

Mr Dickson said engineers were under pressure to downplay new features on the 737 Max. He said by classifying them as minor rather than major changes, Boeing would face less scrutiny from the US regulator, the Federal Aviation Administration. “The goal was to show that those differences were so similar to the previous design that it would not require a major design classification in the certification process. There was a lot of interest and pressure on the certification and analysis engineers in particular, to look at any changes to the Max as minor changes.” He said that downplaying the changes reduced scrutiny in a way that could impact safety. Now even his own family have fears about the plane’s safety. “My family won’t fly on a 737 Max. It’s frightening to see such a major incident because of a system that didn’t function properly or accurately.”

“How does it happen 10 minutes away from the American border in Michigan, people here are paying one-10th of the price for the vitally important drug they need to stay alive?”

• Insulin Is Our Oxygen: Bernie Sanders Rides Another Campaign Bus To Canada (G.)

When Hunter Sego realized the insulin he needed to manage his Type 1 diabetes cost more than $1,400, he called his mother in a panic. His family had insurance. He did not believe it was possible a one-month supply of “life saving” medication could cost so much. The price tag was correct. Then a student and football player at DePauw University, he began to ration his insulin, using a quarter of what had been prescribed. He lost weight. His grades dropped. He struggled on the field. Fortunately, his mother found out and stopped him from rationing his insulin – a practice that is increasingly common and potentially deadly.

On Sunday, Sego and his mother, Kathy, drove seven hours from Indiana to join a caravan of roughly a dozen patients with Type 1 diabetes on a bus to Canada with Vermont senator and presidential candidate Bernie Sanders. The Americans – wearing glucose monitors on their arms and shirts that said “diabetic” – set out to buy insulin for a fraction of its cost at home. Sanders’ northern sojourn, a trip his campaign sponsored, was designed to highlight the rising cost of prescription drugs in the US, which the senator said was the result of “incredible corruption and greed” on the part of the US pharmaceutical industry.

“How does it happen 10 minutes away from the American border in Michigan, people here are paying one-10th of the price for the vitally important drug they need to stay alive?” Sanders asked, calling the disparity a “national embarrassment”. In his remarks outside of the Olde Walkerville Pharmacy in Windsor, Sanders vowed that as president he would appoint an attorney general to investigate the pharmaceutical industry for what he described as “collusion” between the major drug companies. “Prices go up and up and up at the same level for the same companies,” he said. “So what you do is you throw these people in jail if they engage in price-fixing.”

How many agents are going to be on his tail?

• Papadopoulos To Head To Greece To Retrieve $10,000 Payment (Fox)

Former Trump adviser George Papadopoulos told Fox News’ Maria Bartiromo in an exclusive interview that he is heading back to Greece to retrieve $10,000 that he suspects was dropped in his lap as part of an entrapment scheme by the CIA or FBI — and federal investigators want to see the marked bills, which he said are now stored in a safe. Papadopoulos said on “Sunday Morning Futures” he was “very happy” to see Devin Nunes, R-Calif., grill former Special Counsel Robert Mueller about the summer 2017 payment during last week’s hearings — even though Mueller maintained, without explanation, that the matter was outside the scope of his investigation.

“I was very happy to see that Devin Nunes brought that up,” Papadopoulos said. “A man named Charles Tawil gave me this money [in Israel] under very suspicious circumstances. A simple Google search about this individual will reveal he was a CIA or State Department asset in South Africa during the ’90s and 2000s. I think around the time when Bob Mueller was the director of the FBI. “So, I have my theory of what that was all about,” Papadopoulos added. “The money, I gave it to my attorney in Greece because I felt it was given to me under very suspicious circumstances. And upon coming back to the United States I had about seven or eight FBI agents rummaging through my luggage looking for money.”

According to Papadopoulos, “the whole setup” by the “FBI likely, or even the special counsel’s office,” was intended to “bring a FARA [Foreign Agents Registration Act] violation against me.” The FARA statute played a key role in the prosecutions of former Trump aides, including Michael Flynn and Paul Manafort. Papadopoulos previously told Bartiromo in May that he wanted authorities to take a look at the money trail. “I actually want Congress, [Bill] Barr, [DOJ Inspector General Michael] Horowitz, and [U.S. Attorney John] Huber to review the bills because I still have the bills and I think they are marked,” Papadopoulos said. “These bills that are still in Athens right now must be examined by the investigators because I think they are marked and they’re going to go all the way back to DOJ, under the previous FBI under [James] Comey, and even the Mueller team.”

But the torture just continues…

• US Wants To ‘Make An Example’ Of Assange In Jail, UN Expert Claims (SMH)

The United States government has promised that Julian Assange will get a fair trial on espionage charges, rejecting the accusation of a United Nations expert that the administration “intends to make an example of him” with excessive charges and jail time. It has challenged the assessment of the expert, the UN’s Special Rapporteur on Torture Nils Melzer, that Assange would “be exposed to a real risk of torture or other cruel, inhuman or degrading treatment or punishment” if he ended up in a US jail. But Melzer has warned that extradition to the US would severely and dangerously worsen Assange’s already fragile psychological state.

The WikiLeaks founder is in a London jail awaiting a legal fight against extradition to the US, where he has been charged with conspiracy to receive and disclose top secret documents allegedly obtained from army whistleblower Chelsea Manning in 2010. Assange’s team are expected to argue he will not receive a fair trial if the extradition takes place, and that extradition would be dangerous to his health – arguments bolstered by the damning independent report from Melzer. In May, after visiting Assange in Belmarsh Prison for an interview and psychological examination, Melzer concluded that the US, Britain, Sweden and Ecuador shared responsibility for the “psychological torture” of Assange.

On Sunday new details emerged of Melzer’s conclusions, after the publication of letters that Melzer sent to the respective governments of those countries. The UN Human Rights Commissioner also published two responses received from the US and Sweden which strongly rejected Melzer’s claims and arguments. In his letters, Melzer gave new details of Assange’s prison regimen. At the time of his visit Assange was shut in his cell for about 20 hours a day, eating all his meals in the 2 metre by 3 metre space with “a bed, a cupboard, a note-board, basic sanitary installations, a plastic chair and a medium sized window”. Melzer called for Assange to be given access to the prison library and gym, and expressed concern that his situation “severely hampers his ability to adequately prepare” for his legal fight.

Renewables Are Dead

May 062019

May 6, 2019 Posted by Raúl Ilargi Meijer at 1:33 pm Primers Tagged with: coal, education, Energiewende, energy, fossil fuels, Germany, Heidegger, Merkel, oil, physics, renewables, resources, solar, thermodynamics, wind 23 Responses »

Gustave Courbet The man made mad by fear 1844

If I’ve said once that those among us who tout renewable energy should pay more attention to the 2nd law of Thermodynamics, I must have said it a hundred times. But I hardly ever get the impression that people understand why. And it seems so obvious. A quote I often use from Herman Daly and Ken Townsend, when I talk about energy, really says it all:

“Erwin Schrodinger (1945) has described life as a system in steady-state thermodynamic disequilibrium that maintains its constant distance from equilibrium (death) by feeding on low entropy from its environment – that is, by exchanging high-entropy outputs for low-entropy inputs. The same statement would hold verbatium as a physical description of our economic process. A corollary of this statement is that an organism cannot live in a medium of its own waste products.”

Using energy produces waste. Using more energy produces more waste. It doesn’t matter -much- what kind of energy is used, or what kind of waste is produced. The energy WE use produces waste, in a medium of which WE cannot survive. The only way to escape this is to use less energy. And because we have used such an enormous amount of energy the past 100 years, we must use a whole lot less in the next 100.

We use about 100 times more energy per person, and a whole lot more in the west, than our own labor can produce. We use the equivalent of what 500 billion people can produce without the aid of fossil fuel-powered machines. We won’t solve this problem with wind turbines or solar panels. There really is one way only: cut down on energy use.

Because it’s exceedingly rare to see this discussed, even among physicists, who should know better since they know thermodynamics, it’s good to hear it from someone else. An article in Forbes today discusses a May 3 article in German magazine Der Spiegel on the problems with the Energiewende, the country’s drastic turn towards renewables.

The Forbes article is written by Michael Shellenberger, President of Environmental Progress and Time Magazine “Hero of the Environment.” (sigh..) Let’s take a walk through it:

The Reason Renewables Can’t Power Modern Civilization Is Because They Were Never Meant To

Over the last decade, journalists have held up Germany’s renewables energy transition, the Energiewende, as an environmental model for the world. “Many poor countries, once intent on building coal-fired power plants to bring electricity to their people, are discussing whether they might leapfrog the fossil age and build clean grids from the outset,” thanks to the Energiewende, wrote a New York Times reporter in 2014. With Germany as inspiration, the United Nations and World Bank poured billions into renewables like wind, solar, and hydro in developing nations like Kenya.

Oh well, perhaps we shouldn’t expect journalists and politicians to understand the world they live in. They’re mostly into feel-good items, that’s a job requirement.

But then, last year, Germany was forced to acknowledge that it had to delay its phase-out of coal, and would not meet its 2020 greenhouse gas reduction commitments. It announced plans to bulldoze an ancient church and forest in order to get at the coal underneath it. After renewables investors and advocates, including Al Gore and Greenpeace, criticized Germany, journalists came to the country’s defense.

“Germany has fallen short of its emission targets in part because its targets were so ambitious,” one of them argued last summer. “If the rest of the world made just half Germany’s effort, the future for our planet would look less bleak,” she wrote. “So Germany, don’t give up. And also: Thank you.” But Germany didn’t just fall short of its climate targets. Its emissions have flat-lined since 2009.

The stage is set: everybody’s favorite renewables producer has fallen flat on its face. And don’t forget, Angela Merkel, the Mutti behind the Energiewende, is a physicist by training. Thermodynamics must have been a class she missed.

Now comes a major article in the country’s largest newsweekly magazine, Der Spiegel, titled, “A Botched Job in Germany” (“Murks in Germany”). The magazine’s cover shows broken wind turbines and incomplete electrical transmission towers against a dark silhouette of Berlin. “The Energiewende — the biggest political project since reunification — threatens to fail,” write Der Spiegel’s Frank Dohmen, Alexander Jung, Stefan Schultz, Gerald Traufetter in their a 5,700-word investigative story (the article can be read in English here).

Germany has already spent $180 billion on its switch to renewables, only to find it doesn’t work. And much much more will be needed. But for what exactly?

Over the past five years alone, the Energiewende has cost Germany €32 billion ($36 billion) annually, and opposition to renewables is growing in the German countryside. “The politicians fear citizen resistance” Der Spiegel reports. “There is hardly a wind energy project that is not fought.” In response, politicians sometimes order “electrical lines be buried underground but that is many times more expensive and takes years longer.”

As a result, the deployment of renewables and related transmission lines is slowing rapidly. Less than half as many wind turbines (743) were installed in 2018 as were installed in 2017, and just 30 kilometers of new transmission were added in 2017. Solar and wind advocates say cheaper solar panels and wind turbines will make the future growth in renewables cheaper than past growth but there are reasons to believe the opposite will be the case. Der Spiegel cites a recent estimate that it would cost Germany “€3.4 trillion ($3.8 trillion),” or seven times more than it spent from 2000 to 2025, to increase solar and wind three to five-hold by 2050.

A total expenditure of some $150 billion per year, every year from 2025 to 2050. On a rapidly failing project. Note: the numbers are “flexible”: just above, it says “Over the past five years alone, the Energiewende has cost Germany €32 billion ($36 billion)” , and seven times that is much more than $150 billion annually. Later in the article, the author says “Germans, who will have spent $580 billion on renewables by 2025 ..” General rule of thumb: it will cost much more than any estimate will tell you.

Between 2000 and 2018, Germany grew renewables from 7% to 39% of its electricity. And as much of Germany’s renewable electricity comes from biomass, which scientists view as polluting and environmentally degrading, as from solar.

Of the 7,700 new kilometers of transmission lines needed, only 8% has been built, while large-scale electricity storage remains inefficient and expensive. “A large part of the energy used is lost,” the reporters note of a much-hyped hydrogen gas project, “and the efficiency is below 40%… No viable business model can be developed from this.”

Meanwhile, the 20-year subsidies granted to wind, solar, and biogas since 2000 will start coming to an end next year. “The wind power boom is over,” Der Spiegel concludes.

Think Mutti Merkel has read this?

.The earliest and most sophisticated 20th Century case for renewables came from a German who is widely considered the most influential philosopher of the 20th Century, Martin Heidegger. In his 1954 essay, “The Question Concerning Technology,” Heidegger condemned the view of nature as a mere resource for human consumption. The use of “modern technology,” he wrote, “puts to nature the unreasonable demand that it supply energy which can be extracted and stored as such..

But then starting around the year 2000, renewables started to gain a high-tech luster. Governments and private investors poured $2 trillion into solar and wind and related infrastructure, creating the impression that renewables were profitable aside from subsidies. Entrepreneurs like Elon Musk proclaimed that a rich, high-energy civilization could be powered by cheap solar panels and electric cars.

Journalists reported breathlessly on the cost declines in batteries, imagining a tipping point at which conventional electricity utilities would be “disrupted.” But no amount of marketing could change the poor physics of resource-intensive and land-intensive renewables. Solar farms take 450 times more land than nuclear plants, and wind farms take 700 times more land than natural gas wells, to produce the same amount of energy.

Note: these issues only arise when you talk about large-scale projects, but then those are the only ones even considered.

Efforts to export the Energiewende to developing nations may prove even more devastating. The new wind farm in Kenya, inspired and financed by Germany and other well-meaning Western nations, is located on a major flight path of migratory birds. Scientists say it will kill hundreds of endangered eagles. “It’s one of the three worst sites for a wind farm that I’ve seen in Africa in terms of its potential to kill threatened birds,” a biologist explained.

We are incapable of seeing an ecosystem as a whole and functioning entity, because we have never learned to look at things that way. So we see a landscape as containing an X-amount of animals and plant life, and can’t figure out why we must be careful with its balance. Landscapes to us look, first, empty, unless there’s -lots of- human activity.

Heidegger, like much of the conservation movement, would have hated what the Energiewende has become: an excuse for the destruction of natural landscapes and local communities. Opposition to renewables comes from the country peoples that Heidegger idolized as more authentic and “grounded” than urbane cosmopolitan elites who fetishize their solar roofs and Teslas as signs of virtue.

Germans, who will have spent $580 billion on renewables by 2025, express great pride in the Energiewende. “It’s our gift to the world,” a renewables advocate told The Times. Tragically, many Germans appear to have believed that the billions they spent on renewables would redeem them. “Germans would then at last feel that they have gone from being world-destroyers in the 20th century to world-saviors in the 21st,” noted a reporter.

Germany to save the world. Yeah, they would love that. Better find another project for that, though. Germany has an enormous car industry, and electric cars, as this article should by now have shown, won’t save the environment. They can’t. Only not driving a car can.

Shellenberger then finishes with a nice, almost philosophical conclusion, which is also his headline:

Many Germans will, like Der Spiegel, claim the renewables transition was merely “botched,” but it wasn’t. The transition to renewables was doomed because modern industrial people, no matter how Romantic they are, do not want to return to pre-modern life. The reason renewables can’t power modern civilization is because they were never meant to. One interesting question is why anybody ever thought they could.

The reason why anyone ever thought renewables could power modern civilization is the same that Angela Merkel thought that: we all learn from failing education systems and have a very poor understanding of even the most basic principles of physics, including by physicists. We want to feel good more than we want reality.

Schools, universities, media and politics are all geared towards believing in growth and progress, in unlimited quantities. Because we all want to believe that there will be energy in unlimited quantities, it’s in our genes.

But look at it this way: in Nate Hagens’ presentation Earth vs. The Amoeba, which I posted a few days ago, there’s a slide that says fossil fuels provide us with a labor subsidy of the equivalent of some 500 billion people, 100 people (energy slaves) for each of us in the global workforce, and many more in the west. Is there anyone amongst you who thinks wind and solar could ever do the same, even in the most ideal conditions imaginable?

If not, it would seem to be time to reconsider a few things. First of all: stop advocating renewables, start advocating the use of less energy. I’m not saying it will be much use, I have this deep-seated fear that we, as a species, won’t be able to stop until nature itself stops us. What you don’t use, someone else can and will. But renewables are now dead. So there. Thanks for making that clear, Mutti, even if you didn’t mean to.

The Real New Deal

Mar 072019

March 7, 2019 Posted by Raúl Ilargi Meijer at 3:12 pm Primers Tagged with: AOC, contraction, economy, efficiency, energy use, Green New Deal, grid, Growth, Ocasio, oil, progress, solar, waste, wind 10 Responses »

Wassily Kandinsky Succession 1935

While we’re on the issue of the Green New Deal, here’s an article by Dr. D. with an intro by Dr. D., one he sent me in the mail that contained the actual article, and that I think shouldn’t go to waste. I hope he agrees.

Waste being the key term here, because he arrives at the same conclusion I’ve often remarked upon: that our societies and economies exist to maximize waste production. Make them more efficient and they collapse.

Ergo: no Green New Deal is any use if you don’t radically change the economic models. Let’s see AOC et al address that, and then we can talk. It’s not as if a shift towards wind and solar will decrease the economic need for waste production (though it may change the waste composition), and thus efficiency is merely a double-edged sword at the very best.

Here’s Dr. D. First intro, then article:

Dr. D: [..] of course there are a thousand things I can say, but I wanted to make just this one point: that the economy as we know it is prohibited from contracting by its own system structure. One thing I couldn’t expand on is that I believe it is almost entirely unconscious. People like AOC, the Aspen Ecological Center, these people have in the back of their minds “What is possible” and “how things are done” and “can I sell this or will people turn away.”

As I say, the idea of saying, “Everything will be perfect, just live like a Zen Monk” is a non-starter. Why, I don’t know, as it’s very pleasant and quite provable. WHY that is in the back of OUR minds (and only ours, they often say “humans” are violent, mean or exploitative, but Algonquins or Kalahari Bushmen might show otherwise), is another whole question, however, it is the root of our, and only OUR, western culture: limitless growth and progress. A religion of Progress that replaces God himself, as the Archdruid would say.

However, here we are. And our system parameters, of our western system do NOT permit ANY contraction of growth or progress. At this point, the entire economic and financial system would collapse, and as we no longer have any religion, community, or moral framework, or possibly even reason, our whole society would collapse with it.

That’s a lot to take on, so let’s just simply ask in public why we are calling for 20 years of furious concrete/CO2-producing growth must occur to rebuild those windmills and 4,000 buildings a day, or whether we should just take the Yankee mantra (and no doubt a Norwegian one too) to “Use it up, wear it out, make it do, or do without.” There is so much wasted you could dumpster dive and Craigslist the first 10 years, giving us enormous resources to apply to raw energy use. But we won’t, and no one will even say it, although everyone knows it, has done it, and CLAIMS there’s an urgent crisis.

So let’s start here and ask why we’re not doing the most stupid, basic, cheap, things, like turning down the thermostat and walking to the store AT ALL, instead of (sorry to pick on this) saving the bats in Mauritania, or the whales in Japan. Why? Because then SOMEBODY ELSE has to take a boot to the teeth, not me in Brooklyn or London. And we will MAKE THEM take in the teeth for me, so I DON’T HAVE TO. We were already down this road in 1970 as the Archdruid has said, we already made this decision not to wear sweaters way back. Instead, I can claim rights to $100 Trillion in wealth and dole it out like the queen, making friends and fame without limit.

But it won’t work, and we need to get on it right away. I believe the leaders already know we’re going to hit the wall and are purposefully trying to hit the accelerator as with outlawing seeds, meat, poisoning soil and water, outlawing gardens, controlling travel – these are all the foundations of Stalin about to approach Ukraine. I can see that in 20 approaches they’re pushing, but I don’t expect them to be very successful. Such as, WE are going to have to do it, not the other guy. And I in fact do, but I’m pretty busy, so this is the best I can do right now.

And perhaps you too.

The Real New Deal

Dr. D: The Green New Deal has taken front page headlines lately, and the discussion on how to green the economy and become more ecological is real. Certainly all sides have wide agreement, where while the Left may call for salvation from Global Warming, yet the Right will call for efficient resource use, preserved farmland and better hunting camps. Everyone loves National Parks, being one of the largest tourist draws in our nation and also for our fellow nations worldwide, nobody likes to see animals run down or the environment destroyed.

With so much agreement, so widespread, it’s difficult to see why a consensus cannot be agreed on. Even if the means are different – statist control vs volunteer capitalism – surely the goals would be reached in any case. Perhaps with two methods, approaches, and visions, attaining our common goals could be far easier. If so, then why does there seem to be such obstacles and reluctance in our joint moment into a greener, better future? The Left says it’s because of the Right, and the Right because of the Left. Yet I can tell you it’s neither: it’s simply math and physics.

An “Economy” is the “the wealth and resources of a country or region, especially in terms of the production and consumption of goods and services.” That is to say they are the static things, like land, rivers, and copper mines, as well as the specific ways in which those blank resources are put to use: the transportation of them to factories, their manufacture, sale, and disposal. This encompasses things not on-ledger, like where environmental and social costs are offloaded, and who is enjoying the benefit of a resource that will run out for our children. This is also the things that are on-ledger, such as who benefits from profits or productivity, and which sectors are subsidized and which are starved. The Financial System rides atop of the Economic System, simply accounting it, keeping track of it, and sending the messages to it about where the needs are and which products should go where.

But neither exist in a vacuum. Although we generally overlook it, the Economic and Financial Systems are an expression of our personal beliefs and values, and those of our nation and national culture or personality. So in the U.S., we have chosen to measure our national prosperity using headline metrics such as the S&P and the GDP. These change character from time to time, as we used to measure the GNP, and now follow the NASDAQ. And the way we characterize them is also relevant: in the U.S., for instance, we measure all government spending in GDP as if it were private spending; that is, as if it were a profit, not an expense.

Nor is this financial arcana: although when this choice was made to make it seem the economy was stronger during the Great Depression, “you optimize what you measure”, and now the government itself has become the economy, with $22T in debts owed, and is directing most resources, but at a LOSS, not a profit. We then record that loss as prosperity. Nor is that different for the S&P or NASDAQ: if the popular financial numbers decline, the Fed will openly take money from the people and push the numbers back up again to indicate “success” and “prosperity” as we measure it. Yet the money borrowed from the taxpayers, the currency holders, makes them poorer, not richer.

World energy consumption per capita based on 2003 data from the International Energy Agency

What does this have to do with the Green New Deal and our joint goal of a cleaner, greener world? Well, the Green New Deal proposes to spend vast sums of money to transfer energy use to renewables and carbon-free sources, and there are unimaginable profits to be made should anyone do this. Unfortunately, the fact this hasn’t occurred is strong proof that it’s not possible. Not that green energy can’t be made or doesn’t exist, but that it’s not PROFITABLE to do so – that’s why the government, or rather the taxpayers, are asked to pay for it. But profit is only money, as the MMT-believers will avow.

What really matters is that thermodynamically, the EROEI, the “energy returned on energy invested” is too low. That is to say, you put in 90 calories and get out only 91. Or worse, put in 101 calories and get out only 90. This is easily shown in a wide variety of green projects, from solar – it’s estimated the electric produced over 20 years is equal to the glass-and-silicon manufacture – to ethanol, where despite enormous carbon, petrol, and water use in the cement, steel, shipping, and manufacturing of the distilling plant, the corn may only produce 10 units gain per 90 invested, or possibly none at all.

This is likely true for windmills, which if needing repair will add costs, while requiring a full-scale standing grid behind them at all times, as well as electric cars, which not only require a grid, but also may use more energy and cause more pollution in mining and smelting the batteries than the vehicle saves over a lifetime. Nor was this a surprise: again, as bad a system as financial accounting is in a system riddled with stock frauds and subsidies, nevertheless, if any of these saved energy, the huge drop in input costs – no gas used – would immediately render all these projects profitable, and not in need of a subsidy.

This is how coal replaced wood, and tractors replaced horses – sometimes in as little as 10 years. This is how LEDs instantly replaced incandescents, or the Prius replaced the K-car –lower costs, better products. And is how the U.S. has had one of the largest drops in CO2 emissions despite shutting down green subsidies and pulling out of the Paris Accord – organically, by market forces. Because despite our terrible, corrupt, interventionist system screwing up all the incentives, everybody loves a deal, and those arbitrages, those improvements still stand out.

Since we’re already using our technical limit, there is another way we can join together, reduce energy use, reduce waste and green the planet: lower demand.

The U.S. uses about half our energy for transportation, and if you’ve been to America, you know that most of that transportation is unnecessary: people live on average +20 minutes from work, and our oversized, centralized schools mean they are nearly as far. It’s not uncommon for every child to have a 40-minute bus ride each morning and night to and from school, and although more efficient than cars, there’s little need, only habit. We concentrated millions of small schools into a few huge ones from 1950 to 2000, just as we concentrated millions of small towns and shops into a few mega-centers. The remaining small businesses – dentists, phone stores, pizza shops – are randomly distributed, without any location in neighborhoods nor any access to public transit, and this would take decades to transform.

Nor is this a thing the people prefer. Commuting is one of the least-liked aspects of modern life as well as the most energy-intensive one. So instead of following massive hundred-trillion debt expenditures that show no promise of returning value, shouldn’t we grasp the low hanging fruit of efficiency? In fact, thermodynamically, efficiency is the only game in town, a 100 or 1,000:1 EROEI instead of 1.2:1. We have even done this from time to time during wars when massive campaigns led to massive efficiency, massive production, massive savings, ration books, and near-total recycling.

But nobody wants that. And that’s why the Green New Deal is structured exclusively as a SPENDING program, and not a SAVING one, because we don’t want to save, we want to SPEND. Part of this of course is that it’s more fun to spend than to save, but more importantly, it’s what we do, it’s what we measure. If you were to have a Green New Deal that is easy to implement and proven to work like the WWII model, GDP and profits would fall sharply. Although much, perhaps most, energy is wasted on unimportant things, the higher efficiencies would mean lower sales, lower production, and lower throughput EVEN IF IT MEANT A HIGHER QUALITY OF LIFE. This is easily seen in the U.S. vs Japan or Europe comparisons:

World energy consumption per capita based on 2013 data from the World Bank

The U.S. uses 10,000kg oil while Japan uses 5,000 and Portugal uses 2,500, and while there are important differences between nations, we don’t think of Japan or Portugal as sacrificing quality of life. This is strictly a choice, a design built up over lifetimes of effort. So if we could become as efficient as Japan and live far better too, why don’t we? This is a no-argument left-right win that can be implemented in hours, why isn’t capturing this easy gain the real target of the GND?

“You get what you incentivize.” If efficiency were the Real Green Deal, money would NOT be spent in Congress, Companies would NOT be paid, and lobbyists go home empty and poor. People would NOT be employed for the new projects and they would NOT vote for the new Congressmen. Government spending falls, even private-sector GDP would decline, and falling with it would be protected sectors of the economy like oil and utilities. How do you sell “Let’s cancel the party and stay home with the lights out”?

But it’s far worse than that in ways we don’t see. We think about New Deal SPENDING because spending has been exclusively incentivized for 100 years. The economy, the society, the financial system have all been built around GROWTH, not efficiency; MORE, not less, until the systems themselves can no longer function with anything less than unceasing expansion, ever-increasing, forever.

If GDP drops for any reason, even for efficiency and an easy increase in the quality of life – even to save all life on earth – consumption drops. A simpler life with fewer miles driven means less gas wasted and fewer cars sold. Fewer cars means fewer meals out. Sales drop. Employment drops. Stock markets drop. The lower valuation of companies means bond quality drops. Lower sales and lower activity mean tax revenue drops. Government programs drop. Treasury bonds drop and with it, military power drops. As stocks, bonds, and T-bill drop, pensions drop. Insurance drops. In short, the entire economy drops, contracts, goes into a sharp deflation and depression with world-wide unemployment and mass bankruptcies.

But worse than that. Economies come and go, wax and wane and adjust to the new realities. However, unlike previous eras, under a debt-based fiat-money system, one thing does NOT drop: debt. As the value of all things declines, the debt owed only increases. By companies. By citizens. By whole governments. And so soon as the numbers in a debt-based system stop increasing, that debt defaults.

Now in previous times, the relative values of debts, assets, and money would simply re-adjust. Bonds would fall, gold (cash) would rise. Bad companies and inefficiencies would be driven out, and the system would recover without the dead weight and bad ideas at a more accurate pricing. But that won’t happen this time. Because everything is so highly leveraged and centralized, and the financial system is our primary means of directing the economy, that system under a debt-based fiat system would almost entirely collapse, and the disruptions of reforming and restarting it would almost certainly take years, during which the economy itself, the production of wheat bread and toothpaste, heating oil and electric lights, would come to a virtual halt, threatening the lives of millions, hundred millions, even billions worldwide.

Wars would start. Nations would fall. So while we don’t think of these things, the reality is, if one were to have a major contraction, much less plan a voluntary, intentional one, the pressure to stop it would be overwhelming and from every side: retail, political, financial, human, ecological, economic, military; there is no way such a plan could be seriously considered, much less implemented. WE ARE NEVER MOVING TO EFFICIENCY UNDER A DEBT-BASED MONETARY SYSTEM. End of story. To the contrary: such a system incentivizes and even DEMANDS new waste and expensive, ruinous ideas like the Green New Deal. And even if they fail, they must ever-increase.

So why are we not having a Green New Deal of easy efficiency, one that we know works, but instead spending ever-more on ever more massive expenditures that are ever-less fruitful? Because this is what the system is designed to do. It’s what it depends on. And as you get what you incentivize, every body, everywhere in the system, will be incentivized to do this or die trying. And this will continue until we change the base assumptions, what we measure, what we capture and profit by. Left or Right, big or small, town or country, public or private, nothing can change in our system until we change it, until we change our beliefs about who we are, what we want, and what we are doing.

For me, I prefer easy, provable gains and a higher, easier quality of life, and I’m not afraid to make those changes that improve us without being at the expense of others. And we will need to face where we are and the challenges of the steps before us. Because essentially we all agree. We not only need a New Green Deal, we need a New Deal altogether. A better one, a fairer one. A possible one. One with a future. So let’s start acting like it and begin.

Eat Less Meat and Save the Planet

Feb 062019

February 6, 2019 Posted by Raúl Ilargi Meijer at 2:52 pm Finance Tagged with: agriculture, beef, cow, energy, farm, fertilizer, food, grass, Green New Deal, Malthus, manure, meat, oil, pasture, supply chain 11 Responses »

Salvador Dali Portrait of Gala with Two Lamb Chops Balanced on Her Shoulder 1933

Ilargi: It’s been quite a while since we last heard from Dr. D. He was probably busy growing stuff. But he’s back now, and with something dear to my heart: the craziness of our food production systems. Answers to which are not always what most people think, to put it mildly.

Dr. D:

Eat less meat to save the planet – report (1)
The new diet that could save the planet (2)
What to eat to save the planet: Report urges ‘radical changes’ to world’s diet – less meat, more veggies (3)

These headlines, likely sourced from a recent article from “The Lancet” (4) are a regular feature of our time, in diet, in environmentalism, and in global warming. They are well-researched, sourced by the world’s experts, and put forward with the highest intentions. However, they are also completely wrong – dangerously, ignorantly wrong.

Like most industries, agriculture and food production is a specialty, with its own language and details. I don’t attempt to tell the Lancet how to perform heart surgery, for to do so would be ridiculous, dangerous, outside of my expertise. I wouldn’t tell a geologist how to interpret the magnetic layers of rock, or how oceanographers should properly interpret sea water samples to guide us on fishing or pollution. Yet this is what they do for farmers.

The primary drive of most such articles is that, with so many people, and so much hunger, we find that it takes “2,500 gallons of water, 12 pounds of grain, 35 pounds of topsoil and the energy equivalent of one gallon of gasoline to produce one pound of feedlot beef.” that “64% of US cropland produces livestock feed.” (5) That it takes “20 pounds corn [to make] 1 pound beef.” (6) Or that you can get 15lbs of beef per acre, but 263lbs of soybeans. (7) Also that cattle are the primary reason for deforestation, and a major cause of methane.

From these numbers, it’s simple to see that meat, particularly cattle, is anti-environmental, and even anti-human, and it would be the pinnacle of irresponsibility to encourage or even allow them to be eaten. It is a direct affront to the poor, the hungry, and even other citizens in developed countries like ourselves, even though we may be able to afford such things. Simple. A lock. Slam-dunk. No further research required.

Setting aside that we waste half our food, the food we do have is maldistributed, and that we haven’t tapped a fraction of the land we did in say, WWII Britain, setting aside that the water doesn’t vanish, but returns to the water table to be used again, setting aside that the methane released does not contribute to global warming since it is exclusively carbon captured by the grass earlier that year, setting aside that the argument is the same one Malthus had, 250 years wrong, or that removing cattle would amount to the permanent extinction of more than a thousand breeds of animals with a lineage thousands of years old … even all that aside, their argument shows they don’t know anything about land, food, or the process of creating it.

Some other major concerns of economists and environmentalists are 1) environmental destruction from drilling 2) peak oil, 3) production of toxic waste, 4) plastics packaging, 5) dependence on imported energy, 6) CO2 from cars and transportation, and 7) BTUs per calorie of food eaten, as popularized in Kunstler’s “3,000 mile Caesar salad” (8) and this is where our story starts.

Deck Family Farm

On a farm, one of the major input costs every year is fertilizer, nitrogen, and this is presently produced almost exclusively from a feedstock of natural gas. That is to say, food in the modern agricultural system is literally the eating of unsustainable oil wells. And it’s even worse than that: agriculture is so dependent on synthesized, centralized petroleum fertilizer that it’s no exaggeration to say that without massive, uninterrupted supplies of cheap oil and gas there would be no food. Yields could easily drop by 30%, causing an unprecedented human catastrophe.

What’s more, another of the environmentalists’ grave concerns, topsoil loss and soil depletion would immediately come to the fore, as the only thing keeping today’s depleted fields in production are the artificial inputs directly from oil fields, mostly imported. –And that’s ABOVE the oil needed for the tractors, for the harvesters, for the delivery, for the centralized plant, for the parts, the buildings, food wrapping, for the creation of pesticides, herbicides, the centralized seed production, centralized grain mills…no. For the purposes of this article, we are only talking about cows.

Of course, mankind didn’t start this way, unable to eat a lettuce leaf without a 10,000-mile chain of energy use from foreign, occupied nations and the unwavering support of the worldwide industrial society that supports it. Originally the cows stood on the very grass they ate, eating contentedly, and were butchered and sent to market locally, using not a drop of oil. They did not disturb the fields but indeed enriched them with their foot-traffic and manure. So how did we go from a 0 mile, 0 grain, 0 cost, 0 oil food source to a food that reportedly starves continents and will destroy the world? That is, if cows were good and worked before, maybe the problem lies not with the meat or the cow, but with rabid industrialism?

If petroleum-based fertilizer is our major weakness, the single import that can be shut off to kill billions, surely it’s our duty — a national security emergency even — to close this weakness and find ecological alternatives. And for fertilizer, we have two: one, you can rotate crops to keep fields fallow in rotation, or two, you can replace synthetic fertilizer with animal manure. In fact, synthetic fertilizer is but a poor, harmful replacement for the manure farmers have used for 5,000 years – it has only nitrogen, potassium and potash, and nothing of the thousand other nutrients required of healthy soil.

It has no biosphere, no heat, no water, and no organic matter. The resulting soil depletion is a prime cause of desertification and topsoil loss, to say nothing of constantly lower yields. Its very use destroys the soil in the way steroids destroy health while giving the illusion of strength. They should probably be banned not for environmental reasons, but for long-term efficiency and national security. And there is only one replacement for this toxic, destructive, unreliable, expensive input: animal manure.

Worse, this cannot be chicken, sheep, or pig, adequate as they are. Pig and chicken are too concentrated and toxic and require other petroleum processes to dilute and deliver. Sheep is too mild and not in quantity, for sheep do not favor containment. Home composting could never produce a fraction of the volume needed for the world’s fields without the same massive petroleum inputs in tractors, trucks, chippers, conveyors, and all the factories, railways, and steel mills that create them. That leaves largely one source: cattle.

So in this new ecological world we imagine, we would have to grow cattle simply for the required fertilizer. And these cattle cannot be far! Unlike synthetic fertilizer, manure is wet, heavy, and dilute. It cannot be centralized into today’s poisonous sewage ponds, nor shipped coast to coast: it must be created near the fields that require it. As the world is enormously varied, you must also have breeds attuned to each locality’s weather and needs, perhaps creating a thousand unique varieties.

Tiny Kerry cattle for the bogs of Ireland, bony Longhorns for the deserts of Texas, Alpine Braunvieh for the steep mountains of Switzerland, or a hearty Fjäll for the frozen lands of Sweden. Nor can the farms be concentrated or specialized: without mass inputs of machinery or petroleum, and lacking harmful dry fertilizer, the farms must be small, dispersed, and varied, local in scope, diverse in production, specializing in their region and feeding only people nearby. Once you can’t ship mass quantities virtually for free, from reliable, nearly free energy, there is no other way.

Earth Repair Corps

Now you can’t get that fertilizer for nothing, and we don’t get it for nothing now. You have to have input costs for our fertilizer factory. And for cattle that input is grass; fields and fields of it, probably near 1-2 acres per cow. Is that bad? Irresponsible? How does that compare to drilling in ANWAR, and delivering via the Exxon Valdez? How is the sourcing from Iraq, transported via Syria, or the digging of tar with a payloader in the freshwater swamps of Alberta?

Now you can get 1, 2, even 3 cuttings a year of hay in temperate climates, and the cow is happily producing this valuable fertilizer all the time, without embargoes, financial disruptions, or delivery costs. But nevertheless, 25% of your fields will be put out of service in order to environmentally, sustainably source this necessary input for next year’s grain.

But not to fear! You know what? You can EAT the components of this essential, life sustaining fertilizer production factory! Yes, you can! Even better, you can eat butter, cheese, yogurt and yes, even ice cream! These very things you would NOT have without running this fertilizer mill that you would be forced to run even if they did nothing at all. Even more, you can down-stream the whey from your milk-preservative process to feed pigs! I’m not making this up!

Yes, by the very fact of creating fertilizer you had to produce in any case, you can also eat bacon! And you essentially have to, because otherwise this valuable milk-byproduct will go to waste. Nor can the pigs be far. You must have farms that are small in scale, varied in production, and local to the community. This will, of course, make them especially resilient to every challenge: financial, ecological, or human, be it from global warming or global warring.

The diverse, smaller-scale of these farms unfortunately require smaller business units to run them, such as the millions of local families presently unemployed, and sadly force cattle and other animals to free-range on the fields in the sunshine, as their ancestors did. But we all make sacrifices.

More, this small, diverse, decentralized food production system cannot aggregate mass quantities for mass market. Cows are not all the same, arriving by tens of thousands in the same 100-acre slaughterhouse, but because dissimilarity hampers assembly-line processes, the food would be produced in smaller batches, closer to home, more directly, without the wasting fuel and CO2 to ship them worldwide, and without the 31 flavors of plastics packaging which don’t make economic sense at this scale. –The French market model, as it were, local in the streets of your own town, fresh and unique.

You see, what they didn’t ask and forgot to research is that in order to grow those 263lbs of soybeans, you have no alternative but to have 1:4 of your fields fallow, resting, doing nothing. That’s now 197lbs per acre. Neither can you do that every year without input, so using another field to add this fertilizer, you have 131lbs/acre, really. The fallow land required of a world without oil inputs means 1/2 of the world’s production is offline at any given time, starving people.

What a drag! But you COULD, if you’re very clever, plant a wild, nitrogen-fixing plant on that fallow ground, creating both green manure for next year’s soybeans, AND running your cattle-driven fertilizer factory at no additional cost! Not only do you get the ONE field green-manured, and ANOTHER field cow-manured, but you could, if you’re very smart, get that otherwise useless, fallow field to grow ANOTHER crop of milk and beef, and downstream, chickens and pigs, absolutely FREE! THREE fields for the price of one.

What would you expect to pay for this richness, this agricultural, ecological magic trick? $1 trillion? $5 trillion for our green-energy, planet-saving, CO2-reducing “Green New Deal”? One that’s proven and can actually work because it follows the laws of thermodynamics? Surely it’s worth any cost if it saves the planet and takes a huge chunk off oil drilling, oil wars, and global warming.

Answer is: nothing. What I’ve just described is western agriculture, as developed since the 1500s. Anyone who’s ever looked at a farm, read a wikipedia entry, or took a history class knows this. Every medieval peasant knows this. Every hillbilly farmer from Iowa knows this. Except for all the modern journalists and The Lancet, all of whom all eat these very foods every day without the slightest spark of where they come from.

Night Owl Farm

You see, it doesn’t matter if cows are less efficient than soybeans, they exist in a SYSTEM, and that system has many inputs and many parameters. Reading a statistic doesn’t grow a plant to market any more than my reading about scalpels makes me a surgeon. There are many other possibilities, requirements, inputs: they speak of overgrazing, such as dry lands in Africa, when in fact, rotational OVERgrazing replenishes the soil and INCREASES the yields.

What’s more, a very great deal of the reported “arable” land on earth is not productive. It is too dry, such as Texas; too steep, such as Colorado; too variable cold, like Montana; or too far from market, like Afghanistan. You can’t grow soybeans or corn there even if you wanted, and you couldn’t ship kale from Kabul to London at cost, so their “statistics” about arable land and production mean nothing. …Worse than nothing, as they are so misleading as to be completely wrong.

Wrong in the way that enormous, world-changing decisions, subsidies, and wars are made, wrong in the way Stalin thought to modernize and mechanize agriculture in the Ukraine to get it out of the 1500s, and killed 7 million people in a single year. Wrong because not every square mile of land is equivalent, and only the crop that grows and has enough value to ship can be produced there. That’s why they make whiskey in the Appalachians and cheese in the Alps: the value to market has to be so much higher, high enough to transport, or no food will be produced at all.

That’s why they grow wild pigs in the Dehesa of Spain: because otherwise those forests would feed no one. But scientists and journalists don’t know this, even though it’s on the Food Channel each night.

What’s more, their scientific white-room system is orders of magnitude less efficient than the medieval method. Hundreds of random foods are wasted on the farm. Should they be dropped, as the labor cost/hour is too high to economically recover them? Should we waste the time and petrol to compost them into biogas? No. Farm waste, and waste through every warehouse, rail car, grocer, and restaurant can be eaten by chickens. Then not only do you get the compost anyway, in manure, not only do you also get a lifetime of eggs, for free, YOU GET A CHICKEN. All from the grass, the seeds, the bugs…and the food waste they already abandon.

But this doesn’t come without a cost. Brace yourself for this, people, because in order to achieve this level of bounty and efficiency, you will have to EAT these animals rather than let them die of old age and disease and be eaten by dogs and beetles. You, yes you, if you want an ecological, happy-animal, local-economy, sustainable, anti-CO2, food-producing world, not only CAN eat meat, but you are REQUIRED to. …As did a thousand generations of your ancestors, back to the very first day of man, slashing and clearing a field so the deer would come.

So try to be at least as smart as an illiterate medieval peasant and grow your food the natural way: locally, seasonally, independently, with happy animals in a rich green world of fields, trees and farms enriched with thousands of subvarieties of biodiversity in hedgerows so rich they have yet to be fully cataloged. A far cry from the hardened, drilled, paved, expensive, destructive, unsustainable, dangerous, lethal, impoverished way promoted by the scientific experts and the journalists who cover them.

Debt Rattle Christmas Day 2018

Dec 252018

December 25, 2018 Posted by Raúl Ilargi Meijer at 10:28 am Finance Tagged with: China, Christmas, drone, FAANG, Fed, Gatwick, Home Alone, market, Nikkei, oil, plunge, rates, Trump 5 Responses »

Caravaggio Nativity with St. Francis and St. Lawrence 1600

• The Stock Market Just Booked Its Ugliest Christmas Eve Plunge — Ever (MW)

• Japan’s Nikkei Drops 5% After Wall Street Slide Deepens (CNBC)

• US Crude Plunges 6.7%, Settling At 18-Month Low At $42.53 (CNBC)

• ‘The Worst Is Yet To Come’: Experts Say Global Bear Market Coming (CNBC)

• In Defense of the Fed (Stephen S. Roach)

• Trump, Annoyed By Resignation Letter, Pushes Out Mattis Early (R.)

• Mnuchin Holds Calls With Heads Of America’s 6 Biggest Banks Amid Shutdown (F.)

• Facebook Is The ‘Biggest Concern’ Among The FAANGs (CNBC)

• China Won’t Resort To Massive Monetary Stimulus Next Year – PBOC (CNBC)

• Gatwick Drones Pair ‘No Longer Suspects’ (BBC)

• Gatwick Police Say They Cannot Discount Possibility There Was No Drone (Ind.)

• ‘Home Alone’: Bored Trump Tweets Up Storm During Christmas Shutdown (RT)

Bette Davis and Joan Crawford were not each other’s biggest fans

I kid you not: plenty people are blaming this on Trump, too.

• The Stock Market Just Booked Its Ugliest Christmas Eve Plunge — Ever (MW)

Never mind finding coal in your stocking for the holidays. Wall Street investors scored a rare — and unwanted — gift this year. The S&P 500 index fell by 2.7% Monday, marking the first session before Christmas that the broad-market benchmark has booked a loss of 1% or greater — ever. That statistic has been confirmed by Dow Jones Market Data, which said the largest decline in the index on the trading day before Christmas was Dec. 23 in 1933.

The Dow Jones Industrial Average finished down 653 points, or 2.9%, representing its worst decline on the session prior to Christmas in the 122-year-old blue-chip gauge’s history. Check out the table below from Dow Jones Market Data:

U.S. stock indexes ended trading at 1 p.m. Eastern Time on Christmas Eve and will be closed on Christmas. The current dynamic in the market has it set for its worst monthly and yearly decline in about a decade, amid nagging concerns that the Federal Reserve is normalizing interest rates too rapidly, and that a continuing tariff dispute between China and the U.S. could devolve and help lead to a domestic recession, as international economies are already demonstrating signs of a slowdown. Also stoking anxiety was a tweet from Treasury Secretary Steven Mnuchin to assess the health of the banking system, which has raised some questions about liquidity among those institutions that had not previously been raised. Treasury officials insist that the calls to bank executives were just a routine checkup.

The ongoing success of Abenomics.

• Japan’s Nikkei Drops 5% After Wall Street Slide Deepens (CNBC)

Japan’s Nikkei retreated to a 20-month low on Tuesday after a slide on Wall Street deepened with a series of unnerving U.S. political developments. The Nikkei share average ended the day down 5.01 percent at 19,155.74 after brushing its lowest since late April 2017. The day’s performance put the index well into bear market territory — off more than 20 percent since its October high. Japan’s broader Topix closed 4.88 percent lower at 1,415.55 after touching 1,412.90, its weakest since November 2016.

Meanwhile, in China, the Shanghai Index posted losses of more than 2 percent by mid-day, but then gained some ground back into the afternoon. Chinese sectors lost ground across the board, led by financial shares and energy firms as oil prices slumped. So far this year, the Shanghai stock index is down about 24 percent. Those Asia moves followed Wall Street stocks extending their steep sell-off on Monday, with the S&P 500 down nearly 15 percent so far this month, as investors were rattled by the U.S. Treasury secretary’s convening of a crisis group and by other political developments.

Many financial markets in Asia, Europe and North America are closed on Tuesday for Christmas Day. “Negative sentiment has replaced logic, as is often the case during a sell-off. A third of the selling is induced by panic, another third by loss-cutting and the remaining third by speculators trying to make a profit from the market rout,” said Takashi Hiroki, chief strategist at Monex Securities in Tokyo. “The sell-off is triggered almost entirely by developments in the U.S. markets, rather than by negative factors unique to the domestic market.”

Oil swings too much to be safe.

• US Crude Plunges 6.7%, Settling At 18-Month Low At $42.53 (CNBC)

U.S. crude plunged nearly 7 percent on Monday, hitting its lowest levels in a year and half, as the oil market fell in tandem with equities amid deepening turmoil in Washington DC. The Dow Jones Industrial Average plummeted more than 600 points, while the S&P 500 closed in bear market territory. Both stock indexes were buffeted by headlines out of Washington, including a government shutdown and President Donald Trump’s reported desire to fire Federal Reserve chair Jerome Powell over the central bank’s interest rate increases.

The selling in global risk assets on Christmas Eve deepened a nearly three-month slide in oil prices. From peak to trough, U.S. crude has fallen nearly 45 percent from its 52-week high at the start of October. Brent has fallen as much as 42 percent over the same period. “For now, there’s no place to hide in any of these markets. Oil’s being taken down with the stock market and the negative sentiment that’s sweeping across really everything, and for now the downward pressure is going to persist,” John Kilduff, founding partner at energy hedge fund Again Capital told CNBC’s “Closing Bell” on Friday.

The so-called experts see themselves as mighty smart when all they’ve done is suck from the fed’s trough. Humbug!

• ‘The Worst Is Yet To Come’: Experts Say Global Bear Market Coming (CNBC)

Volatility on Wall Street has led shares across the globe on a wild ride in recent months, resulting in a number of stock markets dipping into bear territory. That’s set to worsen in the new year, experts told CNBC on Monday. Bear markets — typically defined as 20 percent or more off a recent peak — are threatening investors worldwide. In the U.S., the Nasdaq Composite closed in a bear market on Friday and the S&P 500 entered one on Monday. Globally, Germany’s DAX and China’s Shanghai Composite have also entered bear market levels. Major market risks remain, experts said. The Federal Reserve is likely to continue raising interest rates and worries about a global economic slowdown — made worse by a trade war between the U.S. and China — are mounting.

“I would love to be more optimistic but i just don’t see too many positives out there. I think the worst is yet to come next year, we’re still in the first half of a global equity bear market with more to come next year,” Mark Jolley, global strategist at CCB International Securities, told CNBC’s “Squawk Box.” For Jolley, the big risk lies in the credit markets. With the Fed projecting another two interest rate hikes in 2019, companies will find it increasingly difficult to service their debt causing some to default or get downgraded, he said. Such weakness in the credit markets will spill over to stocks, noted Jolley. “My core scenario will be a credit event, which will further weigh on equity markets, which will definitely weigh on high growth sectors like tech,” he said.

More generally, investors have fewer reasons to be optimistic now because the Fed tightening monetary policy means there will be less money for investments, said Vishnu Varathan, head of economics and strategy at Mizuho Bank. “There is really no conviction for markets to buy back because they’re not sure this is the bottom, and so they are thinking this is the proverbial falling knives,” Varathan told CNBC’s “Squawk Box.”

The Fed spent the past 10 years making sure its member banks kept on making indecent amounts of money. And now they need to be defended?

• In Defense of the Fed (Stephen S. Roach)

I have not been a fan of the policies of the US Federal Reserve for many years. Despite great personal fondness for my first employer, and appreciation of all that working there gave me in terms of professional training and intellectual stimulation, the Fed had lost its way. From bubble to bubble, from crisis to crisis, there were increasingly compelling reasons to question the Fed’s stewardship of the US economy. That now appears to be changing. Notwithstanding howls of protest from market participants and rumored unconstitutional threats from an unhinged US president, the Fed should be congratulated for its steadfast commitment to policy “normalization.”

It is finally confronting the beast that former Fed Chairman Alan Greenspan unleashed over 30 years ago: the “Greenspan put” that provided asymmetric support to financial markets by easing policy aggressively during periods of market distress while condoning froth during upswings. Since the October 19, 1987 stock-market crash, investors have learned to count on the Fed’s unfailing support, which was justified as being consistent with what is widely viewed as the anchor of its dual mandate: price stability. With inflation as measured by the Consumer Price Index averaging a mandate-compliant 2.1% in the 20-year period ending in 2017, the Fed was, in effect, liberated to go for growth.

And so it did. But the problem with the growth gambit is that it was built on the quicksand of an increasingly asset-dependent and ultimately bubble- and crisis-prone US economy. Greenspan, as a market-focused disciple of Ayn Rand, set this trap. Drawing comfort from his tactical successes in addressing the 1987 crash, he upped the ante in the late 1990s, arguing that the dot-com bubble reflected a new paradigm of productivity-led growth in the US. Then, in the early 2000s, he committed a far more serious blunder, insisting that a credit-fueled housing bubble, inflated by “innovative” financial products, posed no threat to the US economy’s fundamentals. As one error compounded the other, the asset-dependent economy took on a life of its own.

Someone better collect some pieces on Mattis from 2 years ago. Won’t look anything like the sainthood declarations he’s getting today.

• Trump, Annoyed By Resignation Letter, Pushes Out Mattis Early (R.)

U.S. President Donald Trump on Sunday said he was replacing Defense Secretary Jim Mattis two months earlier than had been expected, a move officials said was driven by Trump’s anger at Mattis’ resignation letter and its rebuke of his foreign policy. On Thursday, Mattis had abruptly said he was quitting, effective Feb. 28, after falling out with Trump over his foreign policy, including surprise decisions to withdraw all troops from Syria and start planning a drawdown in Afghanistan. Trump has come under withering criticism from fellow Republicans, Democrats and international allies over his decisions about Syria and Afghanistan, against the advice of his top aides and U.S. commanders.

The exit of Mattis, highly regarded by Republicans and Democrats alike, added to concerns over what many see as Trump’s unpredictable, go-it-alone approach to global security. Trump said Deputy Defense Secretary Patrick Shanahan would take over on an acting basis from Jan. 1. In announcing his resignation, Mattis distributed a candid resignation letter addressed to Trump that laid bare the growing divide between them, and implicitly criticized Trump for failing to value America’s closest allies, who fought alongside the United States in both conflicts. Mattis said that Trump deserved to have a defense secretary more aligned with his views.

Trump, who tweeted on Thursday that Mattis was “retiring, with distinction, at the end of February,” made his displeasure clear on Saturday by tweeting that the retired Marine general had been “ingloriously fired” by former President Barack Obama and he had given Mattis a second chance.

The only interesting question: why go public with something so ordinary?

• Mnuchin Holds Calls With Heads Of America’s 6 Biggest Banks Amid Shutdown (F.)

No need to panic. That was the message Treasury Secretary Steven Mnuchin sought to convey after holding unscheduled Sunday afternoon calls with the heads of the largest banks in America, Jamie Dimon of JPMorgan, Brian Moynihan of Bank of America, Michael Corbat of Citigroup, Tim Sloan of Wells Fargo, David Solomon of Goldman Sachs and James Gorman of Morgan Stanley. In a statement released by Treasury, Mnuchin said these CEOs confirmed “markets continue to function properly.” These bankers also assured Mnuchin their firms have the liquidity to fund themselves and their lending activities, and reported no clearance or margin issues on their trades, Treasury said.

A decade ago, such calls and terse press releases were routine Sunday events as Treasury officials, the Federal Reserve, and bank heads worked together to stem the worst financial panic since the Great Depression. This time, however, Mnuchin’s unusual efforts come amid a growing economy where credit is flowing freely. Instead of a financial panic, his comments seemed aimed at market concerns coming from political turmoil in Washington.

On Monday, Mnuchin will convene a call with the President’s Working Group on financial markets “to discuss coordination efforts to ensure normal market operations,” bringing together the Board of Governors of the Federal Reserve System, the Securities and Exchange Commission, the Commodities Futures Trading Commission, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Commission.

They’re all grossly overvalued.

• Facebook Is The ‘Biggest Concern’ Among The FAANGs (CNBC)

One industry analyst has sounded the alarm on Facebook, calling the company the “biggest concern” among the so-called FAANG stocks. “The digital economy operates on trust, and they’ve broken trust on so many levels,” Ray Wang, principal analyst and founder at Silicon Valley-based Constellation Research, told CNBC’s “Squawk Box” on Monday. The FAANG stocks consist of Silicon Valley tech giants Facebook, Amazon, Apple, Netflix and Google-parent Alphabet.

Wang said many of Facebook’s trust woes have been “centralized” around Chief Operating Officer Sheryl Sandberg, who was in the spotlight after a New York Times report in mid-November about the executive and the social media company’s internal operations. The Times report came on the back of a series of scandals and incidents which have mired Facebook in controversy and sent its stock sinking in 2018. As of its last close after extended hours trade on Dec. 21, the company’s stock price was more than 40 percent off its 52-week high. Asked about the possibility of Sandberg departing from Facebook, Wang said it was “in the rumor category.”

China’s afraid of the exchange rate.

• China Won’t Resort To Massive Monetary Stimulus Next Year – PBOC (CNBC)

China will not resort to “flood-like” stimulus in monetary policy next year, although it will consider more cuts as needed to reserves held at commercial banks, local media quoted a central bank adviser as saying in a report on Tuesday. The Chinese economy will face downward pressure in 2019, while the pace of growth will gradually stabilize, the 21st Century Business Herald quoted Sheng Songcheng, an advisor to the People’s Bank of China (PBOC), as saying. “Monetary policy will remain prudent and won’t be a ‘flood.’ Otherwise, funds will likely flow into the property sector again,” Sheng was quoted as saying by the state-backed newspaper.

There remains room for further cuts in banks’ reserve requirement ratios (RRRs), and Sheng does not recommend broad-based reductions in interest rates, it said. China will bolster support next year for its economy, the world’s second-largest, by cutting taxes and keeping liquidity ample, the official Xinhua news agency said after last week’s Central Economic Work Conference, an annual closed-door gathering of party leaders and policymakers. [..] On exchange rates, the central bank adviser said China should defend the yuan at the key seven-per-dollar level. “The key threshold of seven per dollar is very important. If the yuan weakens past that crucial point, the cost of stabilizing the exchange rate will be greater,” Sheng was quoted as saying.

The level of incompetence is sobering.

Police tell BBC News they “cannot discount the possibility that there may have been no drone at all”.

• Gatwick Drones Pair ‘No Longer Suspects’ (BBC)

A man and woman arrested in connection with drone sightings that grounded flights at Gatwick Airport have been released without charge. The 47-year-old man and 54-year-old woman, from Crawley, West Sussex, had been arrested on Friday night. Sussex Police said there had been 67 reports of drone sightings – having earlier cast doubt on “genuine drone activity”. Det Ch Supt Jason Tingley said no footage of a drone had been obtained. And he said there was “always a possibility” the reported sightings of drones were mistaken.

However, he later confirmed the reported sightings made by the public, police and airport staff from December 19 to 21 were being “actively investigated”. “We are interviewing those who have reported these sightings, are carrying out extensive house-to-house inquiries, and carrying out a forensic examination of a damaged drone found near the perimeter of the airport.” Det Ch Supt Tingley said it was “a working assumption” the device could be connected to their investigation, but officers were keeping “an open mind”.

‘We are working with human beings saying they have seen something..’ Cue 150,000 ruined holidays.

• Gatwick Police Say They Cannot Discount Possibility There Was No Drone (Ind.)

Detectives investigating the Gatwick drone attacks which caused three days of chaos for passengers say it is possible there never were any drones. Police do not have any footage of the flying machines at the airfield and are relying on accounts from witnesses and the discovery of a damaged device. The revelation by Detective Chief Superintendent Jason Tingley came after the couple arrested by Sussex Police on Friday night were released without charge. Asked about speculation there never was a drone, he said: “Of course, that’s a possibility. We are working with human beings saying they have seen something. “Until we’ve got more clarity around what they’ve said, the detail – the time, place, direction of travel, all those types of things – and that’s a big task.”

Mr Tingley said one of the “working theories” was that the damaged drone found close to the airport in Sussex was responsible for causing the disruption. “Always look at it with an open mind, but actually it’s very basic common sense that a damaged drone, which may have not been there at a particular point in time has now been seen by an occupier, a member of the public, and then they’ve told us, ‘we’ve found this’. “Then we go and forensically recover it and do everything we can at that location to try and get a bit more information.” [..] Gatwick Airport has offered a £50,000 reward through Crimestoppers for information leading to the arrest and conviction of those responsible for the chaos.

It doesn’t matter what anybody does, Trump still hoards the attention.

• ‘Home Alone’: Bored Trump Tweets Up Storm During Christmas Shutdown (RT)

With the US government shut down due to the dispute over funding President Donald Trump’s border wall, and his family in Florida, the chief executive has chosen to spend the Christmas holiday taking potshots at critics on Twitter. Funding for about a quarter of US government services ran out on Friday at midnight, as Senate Democrats refused to endorse a House funding bill that would’ve given Trump $5.7 billion for the border wall. Trump was supposed to celebrate Christmas at Mar-a-Lago with his family, but elected to stay in the White House instead, tweeting up a storm.

Trump tweeted twenty times on Thursday, as the shutdown loomed. He continued posting on Friday (ten), Saturday (seven) and Sunday (eight), then ramped up the schedule on Monday, with ten tweets by the early afternoon. In addition to his usual complaints about “Fake News” and Democrats, Trump has also taken aim at the Federal Reserve, praised Saudi Arabia, and dismissed Washington’s envoy to the anti-ISIS coalition as an “Obama appointee” who gave Iran $1.8 billion “in CASH” as part of the “horrific” nuclear deal. He also complained, tongue firmly in cheek, about being “all alone (poor me) in the White House waiting for the Democrats to come back and make a deal on desperately needed Border Security.”

I am all alone (poor me) in the White House waiting for the Democrats to come back and make a deal on desperately needed Border Security. At some point the Democrats not wanting to make a deal will cost our Country more money than the Border Wall we are all talking about. Crazy!

— Donald J. Trump (@realDonaldTrump) December 24, 2018

Though Trump’s Twitter tirades usually trigger the trolls, that last one brought up a multitude of call-backs to the president’s cameo in 1992’s Christmas comedy ‘Home Alone 2: Lost in New York.’

Debt Rattle December 19 2018

Dec 192018

December 19, 2018 Posted by Raúl Ilargi Meijer at 10:01 am Finance Tagged with: Belgium, Brexit, Fed, Flynn, Green New Deal, Greenspan, honey mushroom, Hungary, oil, Powell, troops, Trump 7 Responses »

Francisco Goya Fire at night 1793-94

• Fed Expected To Move Forward With Rate Hike, Despite Trump (CNBC)

• Has “BTFD” Become “STFR”? (Roberts)

• Oil Slump Could Get Much Worse Amid Oversupply Concerns (CNBC)

• Alan Greenspan Has A New Warning For Investors: ‘Run For Cover’ (CNBC)

• Revenge Of The Spies: Flynn Case Shows Extent Of Anti-Trump #Resistance (Malic)

• This Radical Plan to Fund the ‘Green New Deal’ Just Might Work (Ellen Brown)

• Thousands Of British Troops On Standby For No-Deal Brexit (Ind.)

• New ‘Integrity Initiative’ Leaks: Military Ties, Infiltration of European Media (RT)

• Either The EU Ditches Neoliberalism Or Its People Will Ditch The EU (Wight)

• Belgian PM Charles Michel Resigns After No-Confidence Motion (G.)

• France, Hungary, Serbia: Is Half Of Europe Protesting? (DW)

• Hungary’s Opposition Plans More Protests After ‘Slave Law’ Passes (G.)

• One of Earth’s Largest Living Things Even Bigger Than Previously Thought (Ind.)

As long as Powell hints that hikes will be slower, the ‘markets’ will cheer.

• Fed Expected To Move Forward With Rate Hike, Despite Trump (CNBC)

The Federal Reserve is expected to raise interest rates by a quarter point Wednesday and also signal it will not be raising rates as much as it had previously forecast. Strategists say that may soothe volatile financial markets, but the Fed has a tough task in terms of explaining its actions in a way that will not sound too alarmist about the economy or too unconcerned about deteriorating financial conditions. The Fed will be taking the fed funds rate range to 2.25 to 2.50 percent, and Fed watchers expect it to remove language in its post-meeting statement that says it will continue with ‘gradual’ rate increases.

According to its forecast, the Fed was expected to raise interest rates three more times next year, but economists now expect that will change to show two more hikes next year, with another possible in 2020. “The economy is decelerating. They were too optimistic on their outlook, but by the same token, they’re going to have to walk a fine line that they’re not overly concerned. They’re just going to take it down a notch,” said George Goncalves, head of fixed income strategy at Nomura. The Fed’s rate hike is coming against a backdrop of financial market turbulence. Markets have been reacting to concerns about rising interest rates as well as concerns trade wars and weaker global data could lead to a recession.

Fed Chairman Jerome Powell, unlike other Fed chairs, has also faced a stream of criticism from the White House, with President Donald Trump protesting rate hiking policy and in a tweet on Tuesday, the Fed’s balance sheet policy. “I do think the Fed will try and likely succeed in sending a comforting tone to the equity market. I think the market is forcing the Fed to deliver a very dovish hike. We think 2019 dots will come to two. 2020 will show one hike but just above 3 percent. The Fed will make some changes to show they are less on a pre-set course and more data dependent,” aid Mark Cabana, head of U.S. short rate strategy at Bank of America Merrill Lynch.

“..what happens when these algo’s reverse course and rather than “buying the f***ing dip,” they begin to “sell the f***ing rallies” instead..?”

This is where I leave Lance Roberts behind. That graph simply tells me, to the extent that further graphs lose their meaning, that every single thing, the only thing, that happened since 2009 was central banks.

• Has “BTFD” Become “STFR”? (Roberts)

Kevin Wilson recently penned a piece for Seeking Alpha that made a great point about where the markets are currently. To wit: “Famous market observer Art Cashin mentioned a metaphor in October 2017 that resonated with me. He said (words to the effect that) at that moment, market players had only the protection provided by pictures of lifeboats, not the lifeboats themselves. This is just like the Titanic, whose measly 16 lifeboats looked nice, but left many hundreds on board with no means of escape when the ship sank. That is the current market situation in a nutshell. Players seem to believe that their positions are diversified enough to protect them in a downturn, and in any case, many appear to expect no major drawdown in spite of many months of extreme volatility. I would argue that the risk is far greater than perceived by many, and the protections most have in place are quite inadequate.”

Indeed, that is the case. As I noted in this past weekend’s newsletter, while the S&P 500 has declined only marginally for 2018, the devastation across markets has been dramatically worse. In other words, traditional diversification, which is considered the “defacto” portfolio protection strategy by the mainstream media, has not worked. Over the last several weeks, I have been discussing the transition of the market from “bullish” to “bearish.” “The difference between a ‘bull market’ and a ‘bear market’ is when the deviations begin to occur BELOW the long-term moving average on a consistent basis.”

There goes the Saudi budget: ‘Uncertainty and volatility reign once again. ‘

• Oil Slump Could Get Much Worse Amid Oversupply Concerns (CNBC)

Oil prices are likely to fall even further over the coming weeks, analysts told CNBC Tuesday, as a sharp sell-off in global equities combines with intensifying fears about a market that could soon to be awash with crude. The latest wave of energy market selling comes amid reports of swelling inventories and forecasts of record U.S. and Russian output. Heightened worries of a possible economic slowdown in 2019 have also added downward pressure to the value of a barrel of oil. “The only way is down,” Tamas Varga, senior analyst at PVM Oil Associates, said in a research note published Tuesday.

“There are lots of variables regarding next year’s oil balance but based on available data, information and sentiment, it is fair to say that any price rally will be met by fierce resistance from the sellers’ side,” Varga said. Brent crude fell as much as 4 percent to as low as $57.20 a barrel on Tuesday, on track to register its third consecutive session of declines. The international benchmark has since trimmed some of its losses to trade down 2.7 percent. Meanwhile, U.S. West Texas Intermediate (WTI) dipped further below $50 a barrel on Tuesday, after settling below the psychologically important level for the first time in more than a year in the previous session. U.S. crude stood at $47.94 at around 11:00 a.m. ET, trading 4 percent lower.

Scrooge and the Grinch in one person.

• Alan Greenspan Has A New Warning For Investors: ‘Run For Cover’ (CNBC)

Alan Greenspan, the former Federal Reserve chief who called out the tech-fueled rally of the mid-1990s as “irrational exuberance,” is now giving investors a new warning. In a CNN interview, Greenspan said it was unlikely that the current market would stabilize and then take another big leg higher. “It would be very surprising to see it sort of stabilize here, and then take off again,” Greenspan said. Markets could still go up, but “at the end of that run, run for cover.” Greenspan told CNN the bull market is over, pointing to how stocks have fumbled in recent days.

On Tuesday, stocks rallied but they tumbled on Monday and have been in a decline since October, weighed by concerns over global trade conflict and slowing global economies. The S&P was on track, as of Monday’s close, for the worst December since 1931. [..] In the CNN interview, Greenspan said the U.S. could be headed into “stagflation,” an economy characterized by high inflation and high unemployment such as was seen in the 1970s. “How long it lasts or how big it gets, it’s too soon to tell.”

Strangest thing for me yesterday was the judge accusing Flynn of treason, only to apologize for that accusation minutes later.

• Revenge Of The Spies: Flynn Case Shows Extent Of Anti-Trump #Resistance (Malic)

President Donald Trump’s ill-fated first national security adviser Michael Flynn will twist in the wind for another three months or more, before he can face a sentence for getting caught in a FBI ambush while doing his job. Flynn was supposed to be sentenced on Tuesday, ending the year-long legal saga that destroyed his reputation, nearly bankrupted him, and even endangered his family. Then, in a bizarre last-minute twist, his lawyers asked for a delay. The next status hearing will be in March, with the actual sentencing who knows when. At one point in the hearing, Judge Emmett Sullivan urged Flynn to reconsider his guilty plea, telling him that the violation he was admitting to amounted to treason – only to walk back the comments minutes later.

The media, predictably, gave far more coverage to the original statement than the retraction. It’s the perfect example of the collective hysteria that has followed Flynn’s case from the very beginning. Despite the publication of FBI documents showing that agents interviewing Flynn in January 2017 did not think he misled them, intentionally or otherwise, about the content of his conversations with Russian ambassador to the US Sergey Kislyak, Flynn chose to stand by his guilty plea from a year ago. His reasons for this are a mystery. What is not a mystery, however, is how the people involved in railroading Flynn are the same ones implicated in the institutional #Resistance to the Trump administration.

[..] In the orgy of sensationalist reporting that has gripped the US mainstream media for the past two years, Flynn’s actual transgression has been lost to the din of shouting “treason” and “RUSSIA.” What he pleaded guilty to is lying to FBI investigators about his calls with Kislyak. The contacts themselves were right and proper, mind you: it was literally his job to reach out to foreign diplomats on behalf of the president-elect. So, why was the FBI even probing them?

That is where things get interesting. Somebody from the Obama administration – we still don’t know who – “unmasked” Flynn’s name from the classified NSA intercepts of his conversations with the Russian ambassador. This somehow got to Acting Attorney General Sally Yates, who testified that she reached out to the White House with concerns about Flynn being blackmailed. It also somehow got to the Washington Post. There was talk of the Logan Act, an obscure 200-year-old law never used to prosecute anyone.

I have a bunch of questions and doubts, but I like Ellen Brown.

Question 1: Is it a good idea to spend trillions on Green New Deals? How much of it would be geared towards decreased energy use?

Question 2: Is Abenomics really the success Ellen claims it is?

• This Radical Plan to Fund the ‘Green New Deal’ Just Might Work (Ellen Brown)

[..] the “Green New Deal” promoted by Rep.-elect Alexandria Ocasio-Cortez, D-N.Y., appears to be forging a political pathway for solving all of the ills of society and the planet in one fell swoop. Her plan would give a House select committee “a mandate that connects the dots” between energy, transportation, housing, health care, living wages, a jobs guarantee and more. But even to critics on the left, it is merely political theater, because “everyone knows” a program of that scope cannot be funded without a massive redistribution of wealth and slashing of other programs (notably the military), which is not politically feasible.

A network of public banks could fund the Green New Deal in the same way President Franklin Roosevelt funded the original New Deal. At a time when the banks were bankrupt, he used the publicly owned Reconstruction Finance Corp. as a public infrastructure bank. The Federal Reserve could also fund any program Congress wanted, if mandated to do so. Congress wrote the Federal Reserve Act and can amend it. Or the Treasury itself could do it, without the need to even change any laws. The Constitution authorizes Congress to “coin money” and “regulate the value thereof,” and that power has been delegated to the Treasury. It could mint a few trillion-dollar platinum coins, put them in its bank account and start writing checks against them.

What stops legislators from exercising those constitutional powers is simply that “everyone knows” Zimbabwe-style hyperinflation will result. But will it? Compelling historical precedent shows that this need not be the case. Michael Hudson, professor of economics at the University of Missouri-Kansas City, has studied the hyperinflation question extensively. He writes that disasters such as Zimbabwe’s fiscal troubles were not due to the government printing money to stimulate the economy. Rather, “Every hyperinflation in history has been caused by foreign debt service collapsing the exchange rate. The problem almost always has resulted from wartime foreign currency strains, not domestic spending.”

As long as workers and materials are available and the money is added in a way that reaches consumers, adding money will create the demand necessary to prompt producers to create more supply. Supply and demand will rise together and prices will remain stable. The reverse is also true. If demand (money) is not increased, supply and GDP will not go up. New demand needs to precede new supply. Infrastructure projects of the sort proposed in the Green New Deal are “self-funding,” generating resources and fees that can repay the loans. For these loans, advancing funds through a network of publicly owned banks would not require taxpayer money and could actually generate a profit for the government. That was how the original New Deal rebuilt the country in the 1930s at a time when the economy was desperately short of money.

The title of my article yesterday very much reflects Brexit: Chaos in 2018, Mayhem in 2019.

• Thousands Of British Troops On Standby For No-Deal Brexit (Ind.)

Thousands of troops have been put on standby to handle any fallout of Britain crashing out of the European Union without having secured a withdrawal deal. The government has said that, with 100 days to go until Brexit day on 29 March, it will implement all of its no-deal planning “in full” – following a clash in cabinet reflected in the wider Tory Party. Senior ministers went head-to-head, with one group demanding “no deal” become Britain’s central planning assumption, while others including the chancellor branded departing without an agreement a “unicorn” idea. Jeremy Hunt, foreign secretary, is said to have told colleagues their party would never be forgiven if it fails to deliver Brexit, but other Conservatives vowed to do everything in their power to stop a no-deal scenario.

In yet another day of Brexit high drama, defence secretary Gavin Williamson revealed he had made 3,500 troops ready to “support any government department on any contingencies they may need”. While he told MPs there had been no request for the troops yet, he said “What we are doing is putting contingency plans in place, and what we will do is have 3,500 service personnel held at readiness, including regulars and reserves, in order to support any government department on any contingencies they may need.” The Ministry of Defence later confirmed the troops would be put on alert in addition to the 5,000 already on standby to deal with potential terror attacks.

[..] Ministers have already announced plans to stockpile food and medicines, chartering ferries to bring in extra supplies and providing extra resources for border agencies. Downing Street said that advice on no-deal preparations would also be going out to households by various channels over the coming weeks. The Treasury will supply an additional £2bn on top of the £2bn already provided, with the Home Office receiving £500m for border security and handling the settlement scheme for EU nationals who want to remain in the country. Another £400m will go to Defra, the environment department, for projects including ensuring clean drinking water, which the UK treats with chemicals and gases imported from the EU.

More British troops, just with different weapons.

“The goal was to establish “key influencers” on social media and determine who is “friendly” to the UK.”

• New ‘Integrity Initiative’ Leaks: Military Ties, Infiltration of European Media (RT)

It’s been over a month since hackers began exposing the Scotland-based ‘Integrity Initiative’ as a UK government-funded propaganda outfit — and gradually new details of the organization’s clandestine activities have come to light. The documents were leaked by a group which claims to be associated with the Anonymous hackers. The first batch of leaks revealed the Integrity Initiative (II) was stealthily operating “clusters” of influencers across Europe working to ensure pro-UK narratives dominate the media. The second batch showed that the organization was also running disinformation campaigns domestically — specifically a smear campaign against Labour leader Jeremy Corbyn; all done under the guise of combatting “Russian propaganda.”

Now, a third batch of leaks has exposed that the project allegedly operated much like a modern-day version of Operation Mockingbird — a secretive 1950s project whereby the CIA worked hand-in-glove with willing journalists in major media outlets to ensure certain narratives were adhered to. Only this time, it’s a UK-funded organization with deep links to the intelligence services and military passing itself off as a non-partisan “charity.”

[..] 3. Skripal ‘monitoring campaign’ The II leapt into action after the poisoning of ex-Russian spy Sergei Skripal in March and supposedly put together a proposal to monitor social media discussion to “evaluate how the incident is being perceived” across Europe. The goal was to establish “key influencers” on social media and determine who is “friendly” to the UK. Lists of tweets on the Skripal affair were put together, along with country reports detailing how journalists in Europe were responding, the leak suggests. One report noted that in Italy, doubts about the UK narrative had been raised by “high-quality newspapers” and suggested that an “effective, discrete and articulated information campaign” must be directed at key figures in Italian politics and media.

Neoliberalism simply failed to rise people’s living standards, so why should they support it any longer?

• Either The EU Ditches Neoliberalism Or Its People Will Ditch The EU (Wight)

De Gaulle took a dim view of the UK in the postwar period, considering London a proxy of Washington. It was a view that gained common currency within French political circles after the debacle known to history as the Suez Crisis, when in 1956 the French and British entered into an ill-fated military pact with Israel to seize control of the Suez Canal from Egypt and effect the overthrow of the country’s Arab nationalist president Gamal Abdul Nasser. President Eisenhower forced the British into a humiliating retreat, threatening a series of punitive measures to leave London in no doubt of its place in the so-called special relationship. The French had been eager to continue with the Suez operation and were disgusted at London’s craven climb down in the face of Eisenhower’s intervention.

In 1958, two years after the Suez debacle, De Gaulle entered the Elysee Palace as French president. Thereafter, the humiliation of Suez still raw, he embarked on an assertion of the country’s independence from Washington that contrasted with Britain’s slavish and unedifying subservience. The French leader withdrew France from NATO’s integrated command and twice blocked Britain’s entry into the European Economic Community (EEC) – the previous incarnation of today’s EU – on the basis that London would be a US Trojan horse if admitted. There is, given this history, delicious irony in the fact that the country responsible for injecting the poison of neoliberalism into the EU – the UK under its fanatical leader Margaret Thatcher – is currently embroiled in a messy divorce from the bloc.

The EU in its current form is a latter-day prison house of nations locked inside a neoliberal straitjacket and single currency. Not only can’t it survive on this basis, but it also does not deserve to. Ultimately, either Europe’s political establishment decouples from Washington and its works – the Trump administration notwithstanding – or its peoples will decouple from them and theirs. As things stand, the latter proposition is far more likely.

Belgian Cabinets are notorious for taking forever to form.

• Belgian PM Charles Michel Resigns After No-Confidence Motion (G.)

Belgium’s government of four years has fallen on the issue of migration after the country’s parliament rejected an appeal from prime minister, Charles Michel, for its support for a minority administration. Michel was forced to offer his resignation to the King of the Belgians, Philippe, after the Socialist party, with support from the Greens, proposed a vote of no confidence in his administration. The country is now braced for a snap election in January. The head of Michel’s party said the opposition had rejected the government’s “fair offer” in order to secure a political scalp. “The Socialist opposition and Greens wanted a trophy and have it”, said David Clarinval, chairman of the liberal Reform Movement party.

[..] The N-VA, a Flemish nationalist party with hardline views on immigration, walked out of the government earlier this month over Michel’s signature to a UN migration pact providing for a common global approach to migrant flows. The draft UN accord lays down 23 objectives to open up legal migration and better manage a global flow of 250 million people, 3% of the world population. The US dropped out of talks on the pact last year and countries including Italy, Hungary, Austria, Poland, Bulgaria, Slovakia and Australia have rejected it. The deal is expected to be ratified at the UN headquarters in New York on 19 December.

Employers can ‘ask’ employees to work 400 hrs of overtime per year without compensation.

• France, Hungary, Serbia: Is Half Of Europe Protesting? (DW)

People have taken to the streets to protest against a labor law in Hungary, against tuition costs in Albania and against state violence in Serbia. Germany, meanwhile, has seen its first “yellow vest” style demonstration. Looking at the photos, one could mistake the sea of lights in Budapest for a festive holiday event. The people who gathered in Hungary’s capital Sunday night weren’t holding candles, however, but smartphones. And their message is political, not religious. They are demanding Prime Minister Viktor Orban take back a law that allows companies to ask their employees to work 400 hours overtime per year.

Since the measure was passed in parliament last Wednesday, more and more people have been protesting what has been called a “slave law.” In some cases, the rallies were overshadowed by violence. The protests on Sunday started off peaceful, but police later resorted to teargas again. With around 10,000 or even 15,000 participants, Sunday’s rally was the biggest event so far in a series of protests the likes of which Hungary hasn’t seen during Orban’s eight years in power. France is experiencing similar unrest with the “yellow vest” protests. Is the climate in Europe’s streets growing more heated?

Of course Orban blames it all on Soros. He may come to regret ignoring his people’s anger. Same feelling as with Macron.

• Hungary’s Opposition Plans More Protests After ‘Slave Law’ Passes (G.)

Hungary’s beleaguered political opposition has vowed to keep up the pressure on the country’s far-right prime minister, Viktor Orbán, after a week of protests in which thousands came on to the streets of Budapest, and four MPs were roughed up by security guards after attempting to get their demands across on state television. The protests were triggered by a so-called “slave law”, passed amid chaotic scenes in the Hungarian parliament last Wednesday, which allows employers to force employees to work overtime, and lets them delay payment for up to three years. It was passed together with legislation that provides for greater government control over the court system, the latest move by Orbán’s Fidesz party to capture independent state institutions.

A number of different opposition parties are cooperating on a joint strategy to keep pressure on the government. “We’re closely cooperating on a daily basis, and are planning roadblocks and further demonstrations if the president signs this into law,” said Tímea Szabó, of the opposition LMP party. She also said the opposition would announce civil disobedience action, though she refused to specify what it had in mind.

[..] “Brace yourselves for a new kind of democracy, one born of a carefully managed revolution by remote control,” wrote government spokesman Zoltán Kovács in a blogpost about the protests. “The revolution unfolds with protest leaders from a band of the usual suspects, many of them trained abroad and with close ties to Soros networks.” Kovács also pointed the finger at the international media, claiming they were overselling the protests, and at the “stomach-churning opportunism” of the liberal Belgian politician Guy Verhofstadt, who tweeted his support for the protests and used the hashtag #O1G, which refers to a Hungarian meme insulting Orbán in vulgar language. Kovács described Verhofstadt as “one of Soros’s henchmen in Brussels”.

Living organisms that are 1000s of years old and span 100s a of acres.

• One of Earth’s Largest Living Things Even Bigger Than Previously Thought (Ind.)

A giant honey mushroom considered a contender for the largest organism on the planet is both much larger and much older than previously thought. Scientists first studied the enormous fungus, which lives deep underground in a Michigan forest, in 1992. Then they estimated it was 1,500 years old, and the extensive mass of underground fibres and mushrooms that formed it weighed 100,000kg and stretched 15 hectares. Returning to the site, the same team used more rigorous testing to estimate the fungus was in fact closer to 2,500 years old.

They also discovered that it weighed 400,000kg and stretched over 70 hectares. This makes the enormous honey mushroom, which mostly consists of an underground network of tendrils wrapped around tree roots, heavier than three blue whales. “I view these estimates as the lower bound… The fungus could actually be much older,” said Professor James Anderson, a biologist at the University of Toronto who undertook both studies. [..] While the Michigan fungus is large, it is outclassed by another honey mushroom from Oregon that is even larger. There is also the Pando aspen in Utah, a forest originating from a single underground parent clone that is thought to weigh up to 6 million kg.

Armillaria mellea, Honey Fungus, taken in Whitewebbs Wood, Enfield, UK

Debt Rattle November 24 2018

Nov 242018

November 24, 2018 Posted by Raúl Ilargi Meijer at 10:33 am Finance Tagged with: Assange, Brexit, crypto, Ecuador, FANGMAN, Gibraltar, Labour, Macron, McDonnell, Mnuchin, oil, Trump 12 Responses »

Joseph Mallord William Turner The Sun Rising over Water 1825-30

• Britain’s Opposition Labour Party Plots Overthrow Of Capitalism (R.)

• This Sell-Off is Just One Step in Methodical Unwind of Stock Prices (WS)

• Oil Plunges More Than 6% Despite Potential OPEC Cut (R.)

• Bitcoin Loses 25% Of Its Remaining Value During Thanksgiving Week (CNBC)

• Trump Dismisses Report He Is Unhappy With Treasury’s Mnuchin (R.)

• Holiday Doings and Undoings (Kunstler)

• Rising Fuel Price Protests Should Serve As A Red Alert For Macron (I.ie)

• Gibraltar Rocks Final Stages Of Brexit Negotiation (AFP)

• Ecuador Ousts Its London Ambassador, ‘Last Diplomat Assange Knew’ (RT)

• Prosecution of Julian Assange, America’s Betrayal of Its Own Ideals (CD)

• Why You Should Care About the Julian Assange Case (Taibbi)

• Anonymous Blows Lid Off Huge Psyop In Europe Funded By UK & US (RT)

You really think you can win an election saying this?

• Britain’s Opposition Labour Party Plots Overthrow Of Capitalism (R.)

The British Labour Party’s would-be finance minister, John McDonnell, has a message for the world: he is deadly serious about overthrowing capitalism and building a socialist society. McDonnell, 67, who describes Karl Marx as one of his main influences, has been at the vanguard of a left-wing revival in Britain’s main opposition party under fellow socialist Jeremy Corbyn. He has promised sweeping nationalization, higher public spending and an overhaul of the banking system. Asked about his entry in the Who’s Who directory of influential people which lists his passion for “generally fermenting the overthrow of capitalism”, McDonnell said it was a joke about beer-making, but he agrees with the principle.

“I believe it. I am serious in my intent. I want to transform this economy,” McDonnell told Reuters in an interview. “That means evolving into a system which can achieve that equality, that democracy, that fairness, and tackles the major challenges that we are facing.” With PM Theresa May’s grip on power looking ever more vulnerable as she faces the most perilous crisis of her premiership struggling to win backing for her Brexit deal, Labour are increasingly confident that they will be the next guardians of the world’s fifth-largest economy. McDonnell’s gambit is that the social discontent in Britain which fueled the shock 2016 Brexit vote runs much deeper, and that voters who feel left behind by decades of unchecked capitalism and wounded by years of public spending cuts will rally to his call.

“(It was) like everyone’s grievance went into one vote,” McDonnell said. The polls show that is only part of the picture: voters are tired of economic austerity and unhappy with May’s Brexit negotiations, but Labour are only marginally ahead of the ruling Conservative Party. Some commentators have suggested they should be polling better against a government in disarray. Nevertheless, the combination of an unsated appetite for change and a Brexit-inspired political crisis which has trashed the centrist orthodoxy of British politics, has left Labour confident they will soon win power. McDonnell said his ambition is create the most radical government in modern British history even as the country is grappling with its exit from the EU, the most complex negotiations in Europe since the end of World War Two.

[..] McDonnell has outlined a program of nationalizing the railways, energy and water companies and the postal service, raising taxes on businesses and the wealthy. This would be combined with increased spending on education, skills training, and health care, and harnessing the financial sector to help fund a huge infrastructure investment. At his party’s annual conference two months ago, McDonnell did little to conceal the scale of his ambition. Businesses were stunned by his plan to force all large companies to hand over a tenth of their equity to their workforce.

Possible.

• This Sell-Off is Just One Step in Methodical Unwind of Stock Prices (WS)

It was an ugly Monday and Tuesday followed by a Wednesday that at first look like a real bounce but ended with the indices giving up their gains. This was followed, mercifully, by Thursday when markets were closed, which was followed unmercifully by Friday, during which the whole schmear came unglued again. The S&P 500 index dropped 0.7% on Friday to 2,632 and 3.8% for Thanksgiving week, though this week is usually – by calendar black-magic – a good week, according to the Wall Street Journal: During Thanksgiving weeks going back a decade, the S&P 500 rose on average 1.3%. This leaves the S&P 500 index 1.5% in the hole year-to-date. It’s now back where it had first been on November 30, 2017:

Clearly, when seen over the longer term, the sell-off for now still belongs to the small-fry among sell-offs, with S&P 500 down just 10.5% from its peak:

The Dow dropped 0.7% on Friday and 4.4% during Thanksgiving week, to 24,286. It’s 1.75% in the hole for the year. Technically speaking, it’s not even in a correction, being down only 9.9% from its peak. And the Nasdaq, dropped 0.5% on Friday and 4.3% during Thanksgiving week. According to the Wall Street Journal, during Thanksgiving week over the past 20 years, the Nasdaq rose on average 1.3%. So this is no good for calendar-black-magic aficionados. Where’s the free-wheeling holiday spirit? The Nasdaq is now down 14.7% from its peak at the end of August but remains up 0.5% year-to-date. The Russell 2000 small-caps index edged down today and is down 14.5% from its peak on August 31. It’s 3% in the hole year-to-date and right back where it had first been on September 27, 2017:

The seven FANGMAN stocks – Facebook, Amazon, Netflix, Google’s parent Alphabet, Microsoft, Apple, and NVIDIA – fell 1.3% on Friday in combined market cap. Over Thanksgiving week, they have now plunged 6.7%, or by $259 billion. Those are real dollars gone in four trading days with just seven stocks. Since their combined market-cap peak of $4.63 trillion at the end of August, nearly $1 trillion — $994 billion to be precise – has dissolved into ambient air, as their combined market cap has plunged 21.5% in ca. 12 weeks. But if you look at them as individual stocks, it’s even worse. The saving grace for the group as a whole was Microsoft, the second largest stock by market cap, which is threatening to become the largest stock shortly if Apple continues to fall at this pace. Three of the seven have already plunged by 38% to nearly 50%. Two more have plunged by 26% to 27%.

What is it, 34% since the high this year?

• Oil Plunges More Than 6% Despite Potential OPEC Cut (R.)

Oil prices slumped more than 6 percent on Friday, with Brent set for a 12-percent plunge this week, as fears that supply would overpower demand intensified, even as major producers considered cutting output. Oil supply, led by U.S. producers, is growing faster than demand and to prevent a build-up of unused fuel such as the one that emerged in 2015, OPEC is expected to start trimming output after a meeting on Dec. 6. But this has done little so far to prop up prices, which have dropped more than 20 percent so far in November, in a seven-week streak of losses. Deep trade disputes between the world’s two biggest economies and oil consumers, the United States and China, have weighed upon the market.

“The market is pricing in an economic slowdown – they are anticipating that the Chinese trade talks are not going to go well,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “The market doesn’t believe that OPEC is going to be able to act swiftly enough to offset the coming slowdown in demand.” [..] Market fears over weak demand intensified after China reported its lowest gasoline exports in more than a year amid a glut of the fuel in Asia and globally. Stockpiles of gasoline have surged across Asia, with inventories in Singapore, the regional refining hub, rising to a three-month high while Japanese stockpiles also climbed last week. Inventories in the United States are about 7 percent higher than a year ago.

Starting to feel serious.

• Bitcoin Loses 25% Of Its Remaining Value During Thanksgiving Week (CNBC)

Bitcoin continued its move lower Friday, struggling to find footing after a week of pain for the world’s largest cryptocurrency. The digital asset hit a low of $4,119 Friday, according to data from CoinDesk, bringing its seven-day losses to more than 25 percent. In dollar terms, bitcoin’s value dropped by about $1,400 over that time frame. Other cryptocurrencies didn’t hold up this week either. Not a single one in the top 28 by market capitalization was trading in the green Friday, according to CoinMarketCap.com. XRP, the second-largest by market capitalization, fell 6 percent Friday, bringing its one-week losses to 10 percent. Ether was down 7 percent in 24 hours and lost roughly 30 percent for the week.

The total market capitalization for cryptocurrencies fell to $138.6 billion Friday, according to CoinMarketCap data, its lowest level since September 2017. Since its peak, the market has lost about $700 billion in value, according to the data. The tumble for bitcoin started abruptly last week when it fell below $6,000 and hit a new low for the year. The plunge followed what had been a surprisingly calm few months for bitcoin and a break from the rest of its volatile trading year. Since then, prices have hit new 13-month lows and struggled to move out of the $4,300 range. The price dips are a stark contrast from last Thanksgiving when the cryptocurrency was entering a hot streak thanks to a wave of new retail investors. Since that holiday week last year, prices are down by more than 55 percent.

“They never like to ask me for a quote b/c it would kill their story..”

• Trump Dismisses Report He Is Unhappy With Treasury’s Mnuchin (R.)

U.S. President Donald Trump said on Twitter on Friday that he was quite happy with Treasury Secretary Steven Mnuchin’s performance, after The Wall Street Journal reported that the president was dissatisfied with Mnuchin. “I am extremely happy and proud of the job being done by @USTreasury Secretary @stevenmnuchin1,” Trump said in a tweet. The Journal reported that Trump blames Mnuchin for the appointment of Federal Reserve Chairman Jerome Powell, who has been steadily raising U.S. interest rates. Trump is concerned that higher rates could undercut economic gains ahead of his 2020 reelection bid, the newspaper reported.

Quoting unnamed sources, the Journal said Trump has also expressed displeasure with Mnuchin over stock market turbulence and the Treasury secretary’s skepticism about the White House trade actions against China. “The FAKE NEWS likes to write stories to the contrary, quoting phony sources or jealous people, but they aren’t true. They never like to ask me for a quote b/c it would kill their story,” Trump said on Twitter. Trump has repeatedly criticized the Fed’s rate increases under Powell. In October, he called the Fed “crazy,” “ridiculous” and “my biggest threat.”

A year ago when Trump picked Powell to head the Federal Reserve, Mnuchin, a former Goldman Sachs banker, was a strong advocate of his nomination. The Wall Street Journal, citing a person familiar with the matter, said Trump, in a conversation with someone who praised Mnuchin’s performance, mentioned stock market volatility and said: “If he’s so good, why is this happening?”

“..Somehow I doubt that this Christmas will win the Bing Crosby star of approval.”

• Holiday Doings and Undoings (Kunstler)

Somehow I doubt that this Christmas will win the Bing Crosby star of approval. Rather, we see the financial markets breaking under the strain of sustained institutionalized fraud, and the social fabric tearing from persistent systemic political dishonesty. It adds up to a nation that can’t navigate through reality, a nation too dependent on sure things, safe spaces, and happy outcomes. Every few decades a message comes from the Universe that faking it is not good enough. The main message from the financials is that the global debt barge has run aground, and with it, the global economy. That mighty engine has been chugging along on promises-to-pay and now the faith that sustained those promises is dissolving.

China, Euroland, and the USA can’t possibly meet their tangled obligations, and are running out of tricks for rigging, gaming, and jacking the bond markets, where all those promises are vested. It boils down to a whole lot of people not getting paid, one way or the other — and it’s really bad for business. Our President has taken full credit for the bubblicious markets, of course, and will be Hooverized as they gurgle around the drain. Given his chimerical personality, he may try to put on an FDR mask — perhaps even sit in a wheelchair — and try a few grand-scale policy tricks to escape the vortex. But the net effect will surely be to make matters worse — for instance, if he can hector the Federal Reserve to buy every bond that isn’t nailed to some deadly derivative booby-trap.

But then he’ll only succeed in crashing the dollar. Remember, there are two main ways you can go broke: You can run out of money; or you can have plenty of worthless money.

Urban vs rural. Just like in America.

• Rising Fuel Price Protests Should Serve As A Red Alert For Macron (I.ie)

Within the space of a week, the gilets jaunes have managed to tap into wider discontent with Macron’s presidency and policies, gaining opposition support and momentum as a result. These are not the usual protests or strikes co-ordinated by political parties or unions in France. With no official organisation, no identified leader and no political affiliation, the gilets jaunes phenomenon has been almost completely co-ordinated on social media where it declares “[This] comes about only from the French people”. [..] one thing is certain: their actions have chimed with the public. This despite chaos across France last weekend with roads blocked by protesters at some 2,000 locations. Two people were killed – one when a driver panicked and accidentally accelerated their car into the crowd – in the protests and hundreds reported injured.

Nevertheless, a number of polls have shown that almost three-quarters of French voters approve of the demonstrations, one survey found that more than half of those who voted for Macron support them. The planned tax increases – the price of diesel is due to go up another 6.5 cents per litre and petrol by 2.9 cents – are to come into force in January. They follow a 23pc rise in the cost of diesel and 15pc in petrol in the past year. Internationally, Macron has made much of his commitment to battling climate change and these hikes are part of his domestic policies on that front. His ministers have also argued that the higher price of crude globally also necessitates a rise but protesters complain that fuel taxes have been increasing steadily over the past four years.

One survey this week found that 82pc believe Macron should drop the plans. It also showed that particular demographics – the self-employed and business leaders, plus pensioners and low-income households – were most supportive of the gilets jaunes. The episode also highlights the rift between France’s urban elite and those in its poor rural peripheries. Workers who rely on their cars to get to their jobs in the countryside are particularly aggrieved by the planned tax increases.

One more topic they try to push into the limitless future.

• Gibraltar Rocks Final Stages Of Brexit Negotiation (AFP)

Preparations for a summit to endorse Britain’s deal to quit the European Union risked running aground on the rock of Gibraltar Friday, as Spain defended its veto over the fate of the tiny territory. Britain’s Prime Minister Theresa May and leaders of the other 27 EU member states are to meet Sunday to approve their divorce agreement and set a course for negotiating their future post-Brexit relationship. But Spanish officials emerged from talks Friday warning that Prime Minister Pedro Sanchez might not attend unless it is guaranteed that no future accord on EU relations involving Gibraltar will be signed without Madrid’s specific assent.

Visiting Cuba, Sanchez said that if the Gibraltar row is not resolved, he might not go to Brussels on Sunday, warning: “If there’s no agreement, it’s very clear hat will happen, there very probably won’t be a European Council.” In Brussels, Luis Marco Aguiriano Nalda, Spain’s secretary of state for European affairs, said Madrid wanted London to put in writing that it shared Madrid’s interpretation of the negotiated Brexit deal regarding Gibraltar. “We have demanded that it be published by the British authorities before the European Council on Sunday,” he said. In London, however, a Downing Street source said he did not know what document Aguiriano could be referring to and added: “We have negotiated on behalf of the whole of the UK family. That includes Gibraltar and the overseas territories.”

The torture never stops.

• Ecuador Ousts Its London Ambassador, ‘Last Diplomat Assange Knew’ (RT)

Ecuador’s President Lenin Moreno has terminated the credentials of his UK ambassador, who has been at the center of negotiating the fate of WikiLeaks co-founder Julian Assange, as concerns mount over the whistleblower’s safety. The decree, with which Moreno effectively sacked Ecuador’s London ambassador Abad Ortiz, was published by WikiLeaks on Wednesday. The document does not offer any explanation as to why Ortiz, who had been his country’s ambassador to the UK since 2015, is now being permanently recalled. Nor does it name a successor for the outgoing diplomat. The decree is effective immediately.

WikiLeaks tweeted that Abad, appointed to the office under President Rafael Correa, was the last diplomat the long-term self-exiled editor knew in the embassy. “All diplomats known to Assange have now been transferred away from the embassy,” the whistleblowing site claimed. This new and sudden twist in the Assange saga has been met with concern by his supporters, with some suggesting that Moreno is doing Washington’s bidding by removing people who might have stood by Assange and opposed his potential handover to the British police – which is expected to bring about a swift extradition to the US. The dismissal has been called “a silent pro-US coup.”

Best piece on Assange in a while, from Nozomi Hayase.

• Prosecution of Julian Assange, America’s Betrayal of Its Own Ideals (CD)

Just as the Founding Fathers of the United States, by revolting against the autocratic rule of King George were regarded as traitors, by aiding ordinary people expose and defy unjust secret law, WikiLeaks too has been branded as an enemy of the state. Trump’s Secretary of State and the former CIA director, Mike Pompeo calls WikiLeaks a non-state hostile intelligence agency, claiming that the organization threatens American values and needs to be shut down. Members of the US Congress urged the Ecuadorian President to persecute Assange, calling him a “dangerous criminal” and a “threat to global security”. While all these vicious verbal attacks are thrown at him, Assange remains in confinement, over the past months, being completely shut out from the outside, being continually deprived of fresh air, access to medical care and sunlight by the UK government in violation of UN rulings.

All wars start and are fueled by lies and propaganda. Once it was the Vietnam War, where under the command of the US President Lyndon B. Johnson, the Gulf of Tonkin lies unleashed military forces into Southeast Asia. Then came the invasion of Iraq with the former Secretary of State Colin Powell’s speech at the UN, falsely claiming Iraq had ‘Weapons of Mass Destruction’. This battle against free speech is another secret war of this empire. It now has become a fog of war, where with the hype of Russia Gate that was created out of thin air, the public was prevented from seeing who the real enemies are.

Taibbi’s piece is okay, and he says some good things, but he doesn’t appear to like Assange, and fails to hide that.

Valid point he makes: The -secret- charges vs Assange have nothing to do with Trump, they pre-date his presidency by years.

• Why You Should Care About the Julian Assange Case (Taibbi)

It always seemed that Assange viewed his primary role as being a pain in the ass to this increasingly illegitimate system of secrets, a pure iconoclast who took satisfaction in sticking it to the very powerful. I didn’t always agree with its decisions, but Wikileaks was an understandable human response to an increasingly arbitrary, intractable, bureaucratic political system. That it even had to exist spoke to a fundamental flaw in modern Western democracies — i.e. that our world is now so complex and choked with secrets that even releasing hundreds of thousands of documents at a time, we can never be truly informed about the nature of our own societies. Moreover, as the Snowden episode showed, it isn’t clear that knowing unpleasant secrets is the same as being able to change them.

In any case, the institutions Wikileaks perhaps naively took on once upon a time are getting ready to hit back. Frankly it’s surprising it’s taken this long. I’m surprised Assange is still alive, to be honest. If Assange ends up on trial, he’ll be villainized by most of the press, which stopped seeing the “lulz” in his behavior for good once Donald Trump was elected. The perception that Assange worked with Vladimir Putin to achieve his ends has further hardened responses among his former media allies. As to the latter, Assange denies cooperating with the Russians, insisting his source for the DNC leak was not a “state actor.” It doesn’t matter. That PR battle has already been decided.

Courts have held reporters cannot be held liable for illegal behavior of sources. [..] It’s always been the source’s responsibility to deal with that civil or criminal risk. The press traditionally had to decide whether or not leaked material was newsworthy, and make sure it was true. The government has been searching for a way to change that equation. The Holy Grail would be a precedent that forces reporters to share risk of jail with sources. Separate from Assange, prosecutions of leakers have sharply escalated in the last decade. The government has steadily tiptoed toward describing publishers as criminal conspirators.

It’s impossible to know exactly what recent news about an indictment means until we see it (the Reporters’ Committee for the Freedom of the Press has already filed a motion to unseal the charges). If there is a case, it could be anything in the federal criminal code, perhaps even unrelated to leaks. Who knows? But the more likely eventuality is a prosecution that uses the unpopularity of Assange to shut one of the last loopholes in our expanding secrecy bureaucracy. Americans seem not to grasp what might be at stake. Wikileaks briefly opened a window into the uglier side of our society, and if publication of such leaks is criminalized, it probably won’t open again.

Europe needs an enemy. Or rather, NATO does.

• Anonymous Blows Lid Off Huge Psyop In Europe Funded By UK & US (RT)

Anonymous has published documents which it claims have unearthed a massive UK-led psyop to create a “large-scale information secret service” in Europe – all under the guise of countering “Russian propaganda.” In a document dump on November 5, the group exposed the UK-based ‘Integrity Initiative’, said to have been established by the ominously titled Institute for Statecraft in 2015. The main objective is “to provide a coordinated Western response to Russian disinformation and other elements of hybrid warfare.” The Institute for Statecraft is affiliated with the NATO HQ Public Diplomacy Division and the Home Office-funded ‘Prevent’ program, so objectivity is, of course, at the forefront of their work.

Operating on a budget of £1.9 million (US$2.4 million), the secretive Integrity Initiative consists of “clusters” of local politicians, journalists, military personnel, scientists and academics. The team is dedicated to searching for and publishing “evidence” of Russian interference in European affairs, while themselves influencing leadership behind the scenes, the documents claim. The UK establishment appears to be conducting the very activities of which it and its allies have long-accused the Kremlin, with little or no corroborating evidence. The program also aims to “change attitudes in Russia itself” as well as influencing Russian speakers in the EU and North America, one of the leaked documents states.

At present, the vast network allegedly has clusters for Spain, France, Germany, Italy, Greece, the Netherlands, Lithuania, Norway, Serbia, and Montenegro… but there’s more! According to the Anonymous leak, major plans to expand the sphere of influence throughout eastern Europe, the US, and Canada, as well as the MENA region, are allegedly underway. The clusters’ work is apparently done under absolute secrecy via concealed contacts embedded throughout British embassies, the leak claims, some of which are listed as part of the documentation.

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