Sep 052018
 
 September 5, 2018  Posted by at 2:18 pm Finance Tagged with: , , , , , , , , , , , , ,  


Pablo Picasso The actor 1904

 

 

I’ve had a few comments lately wondering why I’m against Brexit, while before the referendum I was not. Someone even remembered I had been talking about Beautiful Brexit back in 2016. It’s real simple. Brexit could be, or could have been, a good idea. There’s a lot wrong with the way the European Union is set up. There’s nothing democratic about Germany always having the last say when it comes to important decisions. Slaughtering the entire nation of Greece on the altar of saving Deutsche and Commerzbank says it all.

But Brexit today is not the same -anymore- as it was before or during the June 23 2016 vote. What happened is that nothing happened. The Brits wasted two whole years and change, and the complexity of the process never allowed for that kind of delay. There are many thousands of pages of EU rules and regulations that not only has the UK been bound by over the past 45 years, but that have shaped its own society.

It’s not just that these ties have to be untangled, they have to be replaced by other rules and regulations. And no, the UK can’t just go back to what they had before 1973; too much water under the bridge, both domestically and internationally. Politically, the EU may be a disaster, but the single market is quite the achievement. And they’re not going to risk it by letting London cherry-pick the rules it likes while leaving others behind. It’s a package deal.

But that is what the Brits, or at least the Tories, appear to have counted on: cherry-picking. They still do. It’s going to be a cold shower. And obviously, they’re going to blame it all on the EU, but that’s neither true nor credible. Still, expect a huge blame campaign. They’re practicing on Labour and its leader Jeremy Corbyn, who the entire UK press including the BBC and Guardian, who are supposed to balance out the slew of Murdoch rags that shape opinion, started accusing of anti-semitism a few weeks ago.

It’s as concerted an effort as the D-Notice gag orders issued earlier this year in the novichok cases. And now that the few media outlets who once had some degree of independence start saying the same things as their smut peers, Brits can safely assume they have no press left that attempts to inform them. It’s now all a propaganda machine.

 

As for Jeremy Corbyn, one can feel sorry for him, but he doesn’t even try to defend himself. Needs to take some cues from Trump? Still, if Corbyn’s a jew hater, I’m Napoleon. There’s nothing in the man’s life that points to that. Just saying that Palestinians are not treated fairly doesn’t mean you hate Jews. That this has become the thread of the ‘discussion’ is an ominous sign.

How are Brits supposed to find out what’s happening in their own country, let alone the rest of the world? There’s no-one left to tell them who doesn’t subscribe to pre-gurgitated ideas and politics. So Theresa May can claim today they know who poisoned the Skripals, and threaten further sanctions against Russia, without sharing any proof with anyone. She can do that because there are no media left in Britain that will ask questions.

If no. 10 says the Russians did it, everyone reports that. If the Blair section of the Labour party says their own leader is an anti-Semite, everyone reports that. Perhaps it’s no coincidence that both Huxley and Orwell were Brits. There is no proof needed anymore: the media will parrot anything the ‘authorities’ say.

Well, kiddo’s, enjoy it while you can, because Brexit is going to shatter that little controlled world of yours into very little pieces. Pretend won’t do it anymore after that. You will need proof for that one, in the form of actual food, and actual trade and jobs. And you won’t have those to offer.

 

Today, Bloomberg reports that both Germany and the UK are willing to accept less stringent conditions for Brexit, but after Brexit day, March 29 2019, goods can no longer move across borders the way they used to. Yes, there is a 21-month transition period, but British products will have to comply with ALL EU rules and laws to be sold to Europe, including Ireland. The same goes for products and services and people that move the opposite way. And in the meantime, the UK cannot close any trade deals with 3rd part countries that don’t comply with EU rules.

Taking control of the narrative(s), as has been the UK’s model, only gets you so far. Britain can trade with the EU, but it cannot simultaneously trade with the US under entirely different conditions. Likewise, London can let Polish people pick British fruits, but not without letting other Europeans work in Britain as well. These rules are broad, and there can be no exceptions, since 27 other countries will want them too.

Now, if only Britain had a press that would tell people what’s going on. It doesn’t. The press only parrots. And if only Jeremy Corbyn told his anti-Semitism accusers to shut up or be sued for libel, and unveil an actual alternative plan for how to do Brexit -or not-. Nobody’s seen any such plan, and Corbyn doesn’t say a thing.

The whole place is just swirling down the drain, watching silly weddings and cooking shows, sipping gin and dreaming of a lost empire nobody can actually remember anymore. And the pace of the swirling can be adapted a little, but no-one is trying to stop it from happening. Oh well, tragedy can be beautiful too.

 

 

Aug 072018
 
 August 7, 2018  Posted by at 1:01 pm Primers Tagged with: , , , , , , , , ,  


Vasily Polenov Christ among the teachers (doctors) 1896

 

This morning I woke up, looked around me, and saw a world sinking into a quagmire of voluntary censorship, a world willing to let someone far away choose what it can and cannot see of itself, and about itself. A world that no longer appears to recognize, or care, that this goes directly against its founding principles of liberty, freedom of speech, freedom of the press.

I can think of many reasons why someone would want to ban Infowars and Alex Jones, and I don’t even know them other than from incidental tweets and comments. But I also acknowledge that that is not the point. Just because you would like to ban a person or organization, just because you don’t agree with them, doesn’t mean you can, or should be able to.

And if Facebook, Google, Apple, Spotify and Pinterest -all within hours of each other-, think it’s a good idea to ban Jones regardless, they had better do a lot better than saying something about violating their ‘community standards’. They should identify specific instances where these alleged violations take place, and identify them publicly.

You can’t ban anyone on vague ‘standards’ from media that cover half the planet. Because that’s a danger to the entire planet, and to all of mankind. As Facebook and Google are very busy lobbying Washington, Brussels et al to drop any anti-trust charges against them, and let them continue to be private enterprises, they are shirking ever close to the various intelligence communities.

Politicians and secret agents alike have long recognized the potential Big Tech offers for controlling their populations. Long before those populations themselves have recognized the danger embedded in this potential. The treatment of Julian Assange and Infowars, 180º different as they are, puts all this in very sharp perspective.

How are you going to be informed, and stay informed, of what’s happening in the world, of what your government does and plans, if your media, both old and new, conspire to let you know only what they want you to, and to present a version of the world, of reality, that they invented in order to safeguard their future and that of their sponsors? Who’s going to tell you what happens behind the infinite layers of curtains?

What is most important here is not who Alex Jones is, or what he’s done and said. What’s most important is that he stands up for Julian Assange as the media, across the board, is either silent or actively smearing Assange with impunity. So for once, go to Infowars and sign the petition to Trump to Free Assange.. If anyone can get through to Trump, it’s Alex Jones, and they’re trying to prevent him from doing just that.

 

You’re being sold out, your rights and freedoms are being sold out, while you’re busy looking at pictures of what your friends had for dinner last night. And if that’s your thing, fine, but not before and until you’ve checked what is happening to your life and liberty, and that of your children, while you’re watching the next photo of a creme brulée or some cute kitten 1000 miles away.

We all know these things. And we’re all overloaded on info, so we’re all tired and developing headaches in echo chambers, and cute kittens are so much easier to deal with than petitions. But pretty soon, if you’re not careful, kittens will be the only thing you’re allowed to look at. Kittens and ‘news’ about evil Russians allegedly plotting to do to you exactly what your own governments already, and actually, do right now.

In one word: you’re being brainwashed. Brainwashed into handing over the liberties your ancestors fought very hard, and often lost their lives, to obtain and guarantee in your constitution. You can’t just give those things away, you have no right to. You owe it to them to protect what they fought for. If and when your government, your House and Senate, refuse to do that, then you will have to do it.

And that starts with protecting and standing up for Julian Assange. You don’t get to pick and choose which part of freedom you would like to protect, you either protect the entire concept or you do not. Freedom doesn’t mean you get to chop freedom into bits and pieces. And if you fail to stand up for the part you don’t like, you also fail to protect what you do like.

 

You don’t get to cherrypick, And neither should Google, Apple, and Facebook. Check your constitution for that one. Sure, we get it, it’s hard to stand up for Alex Jones. But if he can get chucked out for violating opaque ‘community standards’ of some private enterprise, then so can you. Well, unless you only look at kittens and desserts. But is that what you want your life to look like going forward?

This is about a principle engraved in the Constitution, and not just the American one. And of course there would always be people trying to get rid of that principle, because it got in the way of their personal power and interests. But that’s exactly why it’s in the Constitution. So it can’t just be eradicated at whim.

New media, social media, have taken the world by storm, and everyone has to scramble to keep up and think about what this means. What it should never ever mean, though, is that some parties get to use the confusion in order to trample on the Constitution. But that is what’s happening today.

We’ll resolve this eventually. You can’t let companies that have half the world as their clients continue as private enterprises; there’s far too much in the way of monopoly and anti-trust law to allow that to continue. But as long as this is not solved, Google and Facebook will be used as political tools, even while their legal status, and that of their policies, will be increasingly questionable.

So, you know, standing up for Alex Jones today equals standing up for the Constitution. That is harder for people to understand than it is that calling for Julian Assange to be protected and freed is. But it is the same thing. This is proven more than anything by the fact that Jones gets shut down at the very moment he seeks to protect Assange.

Swallow your pride and your disapproval of Alex Jones. Sign the petition to Trump to Free Assange.. It’s much bigger than your pride, or whatever you happen to like or dislike. This is about your future. And the people in the past who gave their lives to make it what it is. Don’t give it away. Prove Orwell wrong.

That we must defend Alex Jones just to stand up for Julian Assange should be all you need to know. You can’t defend Assange without also defending Infowars’ right to speak. And if they say things that go against the Constitution, a bunch of geeks in Silicon Valley should never be the judges of that.

 

 

Jul 052018
 


René Magritte The secret player 1927

 

There’s something wonderfully -though at the same time sadly- ironic in simultaneously contemplating America’s Independence Day and Greece’s NO! (OXI!) vote three years ago that was subsequently defeated by it own prime minister, Alexis Tsipras, at the behest of the European Union’s powers that be.

Where Americans managed to break free of their yoke in 1776, the Greeks did not. Indeed, they were betrayed by their own. There are certainly plenty of similarities with the Declaration of Independence to be made, plenty voices and forces that sought to defeat the Founding Fathers. In the end, the result is simple: the Americans succeeded in breaking free, the Greeks did not.

It’s just that this is not where the story halts; it’s not the whole story. You can say that the Greeks are not independent while the Americans are, but that is true in name only. What does that famous American independence consist of?

How free and independent are Americans really today? In 1956, Dwight Eisenhower famously talked about the military-industrial complex that the nation should beware of, but 62 years later is seems safe to say his warning was not heeded.

Donald Trump ran on a non-interventionist platform, but the military-industrial complex appears to have him gift-wrapped up and ready for delivery a year and a half into his presidency. Under Trump, the US have dropped more bombs than even under Obama, no small feat.

It is of course well understood that if you justify such action properly through the media, the people will buy about anything when it comes to waging war abroad, but it’s still not what people voted for. They are not independent of the war machine.

And you can take this one step further. You can ask how independent a nation can really be if its citizens never learn to have independent thought, if they are deliberately never taught how to think for themselves. How can you be independent if and when other people define your thought and views?

Every single American and European must recognize at least part of Caitlin Johnstone’s Babies. It may read as if it’s describing some Chinese or Soviet system, or even Huxley or Orwell, but there’s not really any plausible denial that at least some of what she says resonates with you:

 

Babies

When a baby is born, its parents teach it how to eat solid foods and walk and talk, which generally works out fine. Then they start teaching the baby all the lies their parents taught them, and things start to get messy. When the baby is old enough, they send it to school, where it spends twelve years being taught lies about how the world works so that one day it will be able to watch CNN and say “Yes, this makes perfect sense” instead of “This is ridiculous” or “Why does this whole entire thing seem completely fake?” or “I want to punch Chris Cuomo in the throat.”

The baby is taught history, which is the study of the ancient, leftover propaganda from whichever civilization happened to win the wars in a given place at a given time. The baby is taught geography, so that later on when its country begins bombing another country, the baby’s country won’t be embarrassed if its citizens cannot find that country on a globe. The baby is taught obedience, and the importance of performing meaningless tasks in a timely manner.

This prepares the baby for the half century of pointless gear-turning it will be expected to undertake after graduation. The baby is taught that it lives in a free country, with a legitimate electoral system which facilitates meaningful elections of actual representatives in a real government. It is never taught that those elections, representatives and government are all owned and operated by the very rich, who use them to ensure policies which make them even richer while keeping everyone else as poor as possible so that they won’t have to share political power.

And so you get to, have to, wonder if this is what the Founding Fathers would have wanted. Were they intending for America to be a nation filled with obedient sheeple? Since they themselves were revolting against a power that wanted for them to be just that, it doesn’t seem likely.

Beyond the issue of slavery, which would take another 90 years to come on the agenda, and another 90 after that to lead to the abolishment of racial separation (and likely another 90 for the next step), the Fathers appear to have sought actual independence. There are precious few signs that they would have looked kindly upon the military-industrial complex.

Or the existing political parties for that matter, replete with ‘life-long’ politicians who label themselves ‘public servants’ but whose careers depend entirely on lobbyists and the corporate powers they serve, which donate the campaign cash needed to get the ‘public servants’ elected and re-elected.

Power corrupts absolutely. And it crushes independence. Since all US politicians need corporate money to build and sustain their careers, isn’t it ironic that they, too, would celebrate Independence Day? Independent from what?

Sure, you can celebrate that you no longer depend on British rule, and their tea, but if and when you simply swap one dependency for another, what does the word independence even mean any more?

At least that’s something the Greeks have an answer to. They depend on Europe’s largest nations and their banks. They had a chance to break that dependency, and voted to do exactly that, only to see their Independence Day crushed by the first prime minister in decades who was not part of an age-old corrupt system.

Their quiet despair should be shared by Americans too, who are free and independent men and women in name only, and who depend on Washington and Wall Street’s deeply entrenched power brokers perhaps more then ever in their history.

The Greeks have no options left; they voted for the one independent party there was three years ago, and were betrayed with a kiss. America voted Trump into the White House and though he seemed independent, he also seems to have been eaten alive by the Deep State and the war machine.

Independence appears to mean, first of all, not relying on entrenched power blocks for your lives and livelihoods, the ability to make your own decisions, to reap the fruit of your own labor. Has America been further away from that at any time since 1776 than it is today?

 

 

Apr 052018
 
 April 5, 2018  Posted by at 12:11 pm Finance Tagged with: , , , , , , , , , , , , ,  


Herbert Ponting Scott’s Terra Nova Expedition, Antarctica 1911

 

Something must be terribly wrong with the world. A few days ago Elizabeth Warren agreed with Trump on China, now Bernie Sanders agrees with him about Amazon. What’s happening?

 

Bernie Sanders Agrees With Trump: Amazon Has Too Much Power

Independent Vermont senator and 2016 presidential hopeful Bernie Sanders echoed President Donald Trump in expressing concern about retail giant Amazon. Sanders said that he felt Amazon had gotten too big on CNN’s “State of the Union” Sunday, and added that Amazon’s place in society should be examined.

“And I think this is, look, this is an issue that has got to be looked at. What we are seeing all over this country is the decline in retail. We’re seeing this incredibly large company getting involved in almost every area of commerce. And I think it is important to take a look at the power and influence that Amazon has,” said Sanders.

A backlash against Facebook, a backlash against Amazon. Are these things connected? Actually, yes, they are connected. But not in a way that either Trump or Sanders has clued in to. Someone who has, a for now lone voice, is David Stockman. Here’s what he wrote last week.

 

The Donald’s Blind Squirrel Nails An Acorn

It is said that even a blind squirrel occasionally finds an acorn, and so it goes with the Donald. Banging on his Twitter keyboard in the morning darkness, he drilled Jeff Bezos a new one – or at least that’s what most people would call having their net worth lightened by about $2 billion:

“I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!” You can’t get more accurate than that. Amazon is a monstrous predator enabled by the state, but Amazon’s outrageous postal subsidy – a $1.46 gift card from the USPS stabled on each box – isn’t the half of it.

The real crime here is that Amazon has been exempted from making a profit, and the culprit is the Federal Reserve’s malignant regime of Bubble Finance. The latter has destroyed financial discipline entirely and turned the stock market into the greatest den of speculation in human history. That’s why Bezos can kill established businesses with impunity.

The casino allows him to run a pernicious business model based on “price to destroy”, rather than price for profit and a return on capital. Needless to say, under a regime of sound money and honest capital markets Amazon would be a far more benign economic creature. That’s because no real investors would value AMZN’s money-loosing e-Commerce business at $540 billion – nor even a small fraction of that after 25-years of profitless growth.

The bubble economy, the everything bubble, that we have been forced into, with QE, ultra-low rates, central banks buying trillions in what at least used to be assets, and massive buybacks that allow companies to raise their ‘value’ into the stratosphere, has enabled a company like Amazon to kill off its competition, which consists of many thousands of retailers, that do have to run a profit.

It’s a money scheme that allows many of the most ‘valuable’ tech companies to elbow their way into our lives, in ways that may seem beneficial to us at first, but in reality will only leave us behind with much less choice, far less competition, and many, many fewer jobs. Once it’s done someone will mention ‘scorched earth’. But for now they are everybody’s darlings; they are, don’t you know, the tech giants, the brainchildren of the best that the best among us have to offer.

They don’t all work the exact same way, which may make it harder to recognize what they have in common. For some it’s easier to see than for others. It’s also difficult to list them all. Here’s a few: Apple, Amazon, Facebook, Google (Alphabet), Tesla, Uber, Airbnb, Monsanto. Let’s go through the list.

 

Apple ? Yes, Apple too. But they make real things! Yes, but just as Apple CEO Tim Cook seeks to distance his company from the likes of Facebook on morals and ethics, he can’t deny that Apple sells a zillion phones to a large extent because everybody uses them to look at Facebook and Alphabet apps until their faces are blue. If data ethics are the only problem Cook sees, he’s in trouble.

Silicon Valley infighting shows that the industry does have an idea what is going wrong, in ways that should have already led to many more pronounced worries and investigations.

 

Silicon Valley Rivals Take Shots At Facebook

Mr. Cook, who has long sought to differentiate Apple on privacy matters, contrasted its focus on selling devices with Facebook and Google’s ad-based businesses that are built on user data. Asked what he would do if he were Facebook CEO Mark Zuckerberg, Mr. Cook replied: “I wouldn’t be in this situation.”

[..] Days earlier, François Chollet, an artificial intelligence engineer at Google, sought to draw a line between his company and Facebook. He tweeted that Google products like search and Gmail help users “to do more, to know more.” Facebook’s newsfeed, he wrote, “manipulates your worldview and seeks to maximally waste your time.”

[..] In January, Salesforce.com CEO Marc Benioff, whose company sells business software services, said that the addictive nature of social media means it should be regulated like a health issue.“I think that you do it exactly the same way that you regulated the cigarette industry,” Mr. Benioff told CNBC when asked how Facebook should be regulated. Some of the most cutting rebukes have come from people who know Facebook well.

In November, Sean Parker, the founding president of Facebook, said that Facebook executives, including himself, were “exploiting a vulnerability in human psychology” by designing a platform built on social validation. Mr. Parker didn’t respond to a request for comment.

Facebook generally hasn’t responded to the criticism, but it did after sharp comments from its former vice president of growth, Chamath Palihapitiya. “The short-term, dopamine-driven feedback loops that we have created are destroying how society works,” Mr. Palihapitiya said at a talk at Stanford University in November.

I would expect to hear a lot more of that sort of thing. Big Tech is changing the world in more ways than one. And spying on people Facebook-style is merely one of a long list of them. So yes, Apple certainly also belongs in that list. Facebook doesn’t build the devices people use to see what their friends had for breakfast, Apple does that. Moreover, Apple profits hugely from stock buybacks, so it fits in Stockman’s bubble finance definition of Amazon, too.

The failure of politics to investigate, and act against, those dopamine-driven feedback loops which exploit a vulnerability in human psychology in order to maximally waste your time and sell you product after product that you never (knew you) wanted is downright bizarre. Politicians only started talking about Facebook when a topic connected to Trump and Russia was linked to it.

 

Amazon: Trump can’t act fast enough on the tax situation and the US Postal deal. Not that that will solve the issue. Amazon, like all the companies on my list, can only be cut down to size if and when the everything bubble is. They are, after all, its children.

The most pernicious aspect of the Amazon ‘business model’, which all these firms share, and all are able to live by thanks to the central banks and the “greatest den of speculation in human history” they have created, is the prospect of world domination in their respective fields. They all hold in front of speculators the promise that they can crush all competition, or nearly all. Scorched earth, flat earth.

 

Facebook: their place in the list is obvious. What is it, 2.5 billion users? And what they don’t have is divvied up between them and Google when they buy up apps like Instagram. Officially competitors, but they have the exact same goals. And, like me, you may think: what’s the problem, just ban them from collecting all that data. Facebook has no reason to know, at least not one that serves us, where you were last Friday, and with whom. And just in case you missed that bit, they do.

But there their connection to the intelligence world comes in. Their platforms are better than anything the NSA has ever been able to develop. So we can say we don’t want Zuckerberg and Alphabet spying on us, but our own spies do want to do just that. That makes any kind of backlash much harder to succeed. And it doesn’t matter if you delete your Facebook account, they’ll find you anyway. Friend of a friend. We all have friends who are on Facebook, rinse and repeat.

The only hope there is, with Facebook as with the other companies, is for investors and speculators to dump their holdings in massive numbers. And that will only happen when the central bank Ponzi collapses. And it will, but by then we have a whole new set of problems.

 

Google: largely the same set of issues that Facebook has. Its tentacles are everywhere. Former CEO Eric Schmidt’s connections to the Pentagon should be really all you need to know. The EU may have issued all sorts of complaints and fines on competition grounds, but that makes no difference.

The one country with an effective response to Google and Facebook is China, that has largely banned both and built its own versions of their products. Which allows Beijing to ban people from boarding planes, buying homes etc., if their ‘social credit’ is deemed too low. If you want to be scared about where Big Tech’s powers can lead, look no further.

 

Tesla: Elon Musk has built a fantasy (and maybe I should put Paypal in this list too) on what everyone thinks must be done to ‘save the planet’ (yeah, build cars…) by grossly overstating the number of cars he can build, and financing his growth on not only speculation, but also on spectacular amounts of government subsidies (politicians want to save the planet, too).

And now he needs additional financing again. He will probably get it, again, but the Amazon backlash might have people take another look. One fine day… Fits David Stockman’s complaint to a t(ee), doesn’t have to make a profit. Musk has perfected that model.

 

Uber and Airbnb: why anyone anywhere would want to send money generated in their community, by renting out cars and apartments in that same community, to a bunch of people in Silicon Valley, is beyond me. Someone should set this up as an international effort that makes it easy for a community, a city etc., to provide this kind of service and make the profits benefit their own cities.

But like Amazon, they are free to run any competition into the ground because no profits are required until they have conquered the world. And then they can go nuts. It may look like a business model, but it isn’t. It’s a soon to be orphaned bubble child..

 

Monsanto: less obvious perhaps as an entry in the Big Tech list, but very much warranting a spot. And of course it stands for the entire chemical-seeds field. From Agent Orange to your children’s dinner plate. Monsanto has more lawyers and lobbyists on its payroll than it has scientists, but then its lofty goals outdo even those of Google or Amazon.

Facebook may focus on your addiction to human contact, but Bayer, DuPont, Syngenta et al have decided to make your food so addicted to their chemicals that they will in the future profit from every bite served on your table. How they will grow that food long term without any insects, bees or birds left is unclear, but they don’t seem to care much. As for profits? Monsanto seeks to rule the world, and for now care as little about profits as they do about insects.

 

Zuckerberg may claim that he only wants to improve Facebook’s service, but when that is done through for instance the 2012 so-called Transmission of Anger experiment in which the company tried to alter their users’ emotional states -and succeeded-, by manipulating their friends’ postings, that claim becomes pure ridicule. Selling off user data to scores of developers doesn’t help either. But do you see Congress tackling him in any serious way next week? Neither do I.

Because there’s one huge catch to the scenario that David Stockman -and I- painted, of the whole tech bubble collapsing when the financial bubble does. It is the links tech companies have built to intelligence. A group of Google employees wrote a letter to their CEO Sundar Pichai to protest the company’s involvement in “weaponized AI”, in the shape of Project Maven, a military surveillance engine to-be.

These people undoubtedly mean well, but they’re far too late. They will have to leave the “don’t be evil” company to actually not be evil. Because it’s not a big step from weaponized AI to killer robots. Microsoft is also part of the project, and Amazon is. If you work there and don’t want to be evil, you know what to do.

Yeah, it’s about our safety, and security, and political and military and economic power. But it’s also about spying on people, in even worse ways than Facebook does. So even as the central bank bubble, and the tech bubble, go poof, some of these companies may be saved by their military ties.

That sound you hear is George Orwell turning in his grave.

 

 

Mar 212018
 
 March 21, 2018  Posted by at 2:21 pm Finance Tagged with: , , , , , , , , , , ,  


Hildegard von Bingen (1098-1179) German artist, philosopher, composer, mystic Cosmic Tree

 

All of a sudden, politicians in the EU, UK, and USA all want to talk to Mark Zuckerberg. That’s a bad enough sign all by itself. It means they all either have been asleep, complicit, or they’re not very bright. The media tries to convince us the Facebook ‘scandal’ is about Trump, Russia (yawn..) and elections. It’s not. Not even close.

If Zuckerberg ever shows up for any of these meetings with ‘worried’ politicians, he’ll come with a cabal of lawyers in tow, and they’ll put the blame on anyone but Facebook and say the company was tricked by devious parties who didn’t live up to their legal agreements.

After that, the argument won’t be whether Facebook broke any laws for allowing data breaches, but whether their data use policy itself is, and always was, illegal. Now, Facebook has been around for a few years, with their policies, and nobody ever raised their voices. Not really, that is.

And then it’ll all fizzle out, amid some additional grandstanding from all involved, face-saving galore, and more blame for Trump and Russia.

 

The new European Parliament chief Antonio Tajani said yesterday: “We’ve invited Mark Zuckerberg to the European Parliament. Facebook needs to clarify before the representatives of 500 million Europeans that personal data is not being used to manipulate democracy.”

That’s all you need to know, really. Personal data can be used to manipulate anything as long as it’s not democracy. Or at least democracy as the Brussels elite choose to define it.

First: this is not about Cambridge Analytica, it’s about Facebook. Or rather, it’s about the entire social media and search industry, as well as its connections to the intelligence community. Don’t ever again see Google or Facebook as not being part of that.

What Facebook enabled Cambridge Analytica to do, it will do ten times bigger itself. And it sells licences to do it to probably thousands of other ‘developers’. The CIA and NSA may have unlimited powers, but prior to Alphabet and Facebook, they never had the databases. They do now, and they’re using them. ‘Manipulate democracy’? What democracy?

Then: 50 million is nothing. Once the six degrees of separation giant squid gets going, there’s no stopping it. The Cambridge Analytica thing supposedly started with a few hundred thousand people who consented to having their data used for ‘academic’ purposes. From there it’s easy to get to 50 million. It’s harder to stop there than it is to go to hundreds of millions. It’s the six degrees of separation.

Facebook allegedly has over 2 billion user accounts, and their algorithms don’t stop there either. If anything, 50 million is a bit of a failure. What you should understand in this is that Cambridge Analytica are a bunch of loose cannons (yeah, yeah, those dark videos look so incriminating..) and nobody knows what they ever captured.

The real issue lies elsewhere. And we can figure it out. All we need is a few glances into the past. This first article is from June 30 2014. It contains all you read today, and more. Just a bit less Russia and Trump.

 

Facebook Reveals News Feed Experiment To Control Emotions

It already knows whether you are single or dating, the first school you went to and whether you like or loathe Justin Bieber. But now Facebook, the world’s biggest social networking site, is facing a storm of protest after it revealed it had discovered how to make users feel happier or sadder with a few computer key strokes. It has published details of a vast experiment in which it manipulated information posted on 689,000 users’ home pages and found it could make people feel more positive or negative through a process of “emotional contagion”.

In a study with academics from Cornell and the University of California, Facebook filtered users’ news feeds – the flow of comments, videos, pictures and web links posted by other people in their social network. One test reduced users’ exposure to their friends’ “positive emotional content”, resulting in fewer positive posts of their own. Another test reduced exposure to “negative emotional content” and the opposite happened.

The study concluded: “Emotions expressed by friends, via online social networks, influence our own moods, constituting, to our knowledge, the first experimental evidence for massive-scale emotional contagion via social networks.”

The question is simple, isn’t it? Do you want to provide a bunch of, well, geeks, with the ability to change how you feel, just so their employers can make -more- money off of you? That is 1984. That is thought control. And Facebook is some modern honey trap.

Lawyers, internet activists and politicians said this weekend that the mass experiment in emotional manipulation was “scandalous”, “spooky” and “disturbing”. On Sunday evening, a senior British MP called for a parliamentary investigation into how Facebook and other social networks manipulated emotional and psychological responses of users by editing information supplied to them.

Jim Sheridan, a member of the Commons media select committee, said the experiment was intrusive. “This is extraordinarily powerful stuff and if there is not already legislation on this, then there should be to protect people,” he said. “They are manipulating material from people’s personal lives and I am worried about the ability of Facebook and others to manipulate people’s thoughts in politics or other areas. If people are being thought-controlled in this kind of way there needs to be protection and they at least need to know about it.”

Um, so 4 years ago, there was a call for a parliamentary investigation in Britain and a member of the Commons media select committee proclaimed there should be legislation to protect people. Wonder how that panned out? Read the news today. Time stood still.

But there’s of course much more going on. You can claim that people should know about their thoughts being controlled, but that’s nonsense. Nobody in their right mind would, provided the arguments are honestly laid out, permit any such thing.

Moreover, it’s not just their own emotions that are being manipulated, it’s those of their friends and family too. If you are deeply unhappy, they may not see you expressing your distress; it can be easily filtered out so you appear in great spirits. Your friends feel good but someone wants you sad? No problem.

And there’s yet another aspect, one that Facebook may try to use for legal reasons: ever since the days of Edward Bernays, advertisements, and media in a broader sense, are shaped to influence what you think and feel. It sells soda, it sells cars, and it sells wars.

So yeah, people should know about all this, but the role of politicians and parliaments must also be to eradicate it altogether and forever from the societies that vote them in power. Or to tell their voters that they think it’s acceptable, and by the way, they too use deception to get more votes.

A Facebook spokeswoman said the research, published this month in the journal of the Proceedings of the National Academy of Sciences in the US, was carried out “to improve our services and to make the content people see on Facebook as relevant and engaging as possible”. She said: “A big part of this is understanding how people respond to different types of content, whether it’s positive or negative in tone, news from friends, or information from pages they follow.”

But other commentators voiced fears that the process could be used for political purposes in the runup to elections or to encourage people to stay on the site by feeding them happy thoughts and so boosting advertising revenues. In a series of Twitter posts, Clay Johnson, the co-founder of Blue State Digital, the firm that built and managed Barack Obama’s online campaign for the presidency in 2008, said: “The Facebook ‘transmission of anger’ experiment is terrifying.”

He asked: “Could the CIA incite revolution in Sudan by pressuring Facebook to promote discontent? Should that be legal? Could Mark Zuckerberg swing an election by promoting Upworthy [a website aggregating viral content] posts two weeks beforehand? Should that be legal?”

The ‘transmission of anger’ experiment. This is the world you live in.

Well, no, none of it should be legal. And none of it would be if people knew what was going on.

It was claimed that Facebook may have breached ethical and legal guidelines by not informing its users they were being manipulated in the experiment, which was carried out in 2012. The study said altering the news feeds was “consistent with Facebook’s data use policy, to which all users agree prior to creating an account on Facebook, constituting informed consent for this research”.

But Susan Fiske, the Princeton academic who edited the study, said she was concerned. “People are supposed to be told they are going to be participants in research and then agree to it and have the option not to agree to it without penalty.”

James Grimmelmann, professor of law at Maryland University, said Facebook had failed to gain “informed consent” as defined by the US federal policy for the protection of human subjects, which demands explanation of the purposes of the research and the expected duration of the subject’s participation, a description of any reasonably foreseeable risks and a statement that participation is voluntary. “This study is a scandal because it brought Facebook’s troubling practices into a realm – academia – where we still have standards of treating people with dignity and serving the common good,” he said on his blog.

Ah, academia, you unblemished child. We never knew you. Incidentally, what appears to be creeping through between the lines here is that Facebook’s data use policy was prepared from the start, 14+ years ago, for exactly these kinds of ‘experiments’. Which gives a whole new dimension to the discussion today.

It is not new for internet firms to use algorithms to select content to show to users and Jacob Silverman, author of Terms of Service: Social Media, Surveillance, and the Price of Constant Connection, told Wire magazine on Sunday the internet was already “a vast collection of market research studies; we’re the subjects”.

“What’s disturbing about how Facebook went about this, though, is that they essentially manipulated the sentiments of hundreds of thousands of users without asking permission,” he said. “Facebook cares most about two things: engagement and advertising.

If Facebook, say, decides that filtering out negative posts helps keep people happy and clicking, there’s little reason to think that they won’t do just that. As long as the platform remains such an important gatekeeper – and their algorithms utterly opaque – we should be wary about the amount of power and trust we delegate to it.”

Robert Blackie, director of digital at Ogilvy One marketing agency, said the way internet companies filtered information they showed users was fundamental to their business models, which made them reluctant to be open about it.

“To guarantee continued public acceptance they will have to discuss this more openly in the future,” he said. “There will have to be either independent reviewers of what they do or government regulation. If they don’t get the value exchange right then people will be reluctant to use their services, which is potentially a big business problem.”

Feel a bit more awake now? Remember, that was a 2012 study. Let’s move on to 2016, when Shoshana Zuboff penned the following for German paper Franfurter Allgemeine. Just in case you thought it was all about Facebook. This is a bit more abstract, but worth it, in all its length (which I don’t have space for).

 

The Secrets of Surveillance Capitalism

[..] The game is no longer about sending you a mail order catalogue or even about targeting online advertising. The game is selling access to the real-time flow of your daily life –your reality—in order to directly influence and modify your behavior for profit. This is the gateway to a new universe of monetization opportunities: restaurants who want to be your destination. Service vendors who want to fix your brake pads.

Shops who will lure you like the fabled Sirens. The “various people” are anyone, and everyone who wants a piece of your behavior for profit. Small wonder, then, that Google recently announced that its maps will not only provide the route you search but will also suggest a destination.

This is just one peephole, in one corner, of one industry, and the peepholes are multiplying like cockroaches. Among the many interviews I’ve conducted over the past three years, the Chief Data Scientist of a much-admired Silicon Valley company that develops applications to improve students’ learning told me:

“The goal of everything we do is to change people’s actual behavior at scale. When people use our app, we can capture their behaviors, identify good and bad behaviors, and develop ways to reward the good and punish the bad.

[..] There was a time when we laid responsibility for the assault on behavioral data at the door of the state and its security agencies. Later, we also blamed the cunning practices of a handful of banks, data brokers, and Internet companies. Some attribute the assault to an inevitable “age of big data,” as if it were possible to conceive of data born pure and blameless, data suspended in some celestial place where facts sublimate into truth.

I’ve come to a different conclusion: The assault we face is driven in large measure by the exceptional appetites of a wholly new genus of capitalism, a systemic coherent new logic of accumulation that I call surveillance capitalism. Capitalism has been hijacked by a lucrative surveillance project that subverts the “normal” evolutionary mechanisms associated with its historical success and corrupts the unity of supply and demand that has for centuries, however imperfectly, tethered capitalism to the genuine needs of its populations and societies, thus enabling the fruitful expansion of market democracy.

[..] the application of machine learning, artificial intelligence, and data science for continuous algorithmic improvement constitutes an immensely expensive, sophisticated, and exclusive twenty-first century “means of production.” [..] the new manufacturing process converts behavioral surplus into prediction products designed to predict behavior now and soon.

[..] these prediction products are sold into a new kind of meta-market that trades exclusively in future behavior. The better (more predictive) the product, the lower the risks for buyers, and the greater the volume of sales. Surveillance capitalism’s profits derive primarily, if not entirely, from such markets for future behavior.

And then we get to today. For more examples of the same, and for confirmation that even though all of this stuff was known -let alone knowable- years ago, nothing has changed.

 

Ex-Facebook Insider Says Covert Data Harvesting Was Routine

Hundreds of millions of Facebook users are likely to have had their private information harvested by companies that exploited the same terms as the firm that collected data and passed it on to Cambridge Analytica, according to a new whistleblower.

Sandy Parakilas, the platform operations manager at Facebook responsible for policing data breaches by third-party software developers between 2011 and 2012, told the Guardian he warned senior executives at the company that its lax approach to data protection risked a major breach. “My concerns were that all of the data that left Facebook servers to developers could not be monitored by Facebook, so we had no idea what developers were doing with the data,” he said.

[..] That feature, called friends permission, was a boon to outside software developers who, from 2007 onwards, were given permission by Facebook to build quizzes and games – like the widely popular FarmVille – that were hosted on the platform. The apps proliferated on Facebook in the years leading up to the company’s 2012 initial public offering, an era when most users were still accessing the platform via laptops and computers rather than smartphones.

Facebook took a 30% cut of payments made through apps, but in return enabled their creators to have access to Facebook user data. Parakilas does not know how many companies sought friends permission data before such access was terminated around mid-2014. However, he said he believes tens or maybe even hundreds of thousands of developers may have done so. Parakilas estimates that “a majority of Facebook users” could have had their data harvested by app developers without their knowledge.

[..] During the time he was at Facebook, Parakilas said the company was keen to encourage more developers to build apps for its platform and “one of the main ways to get developers interested in building apps was through offering them access to this data”. Shortly after arriving at the company’s Silicon Valley headquarters he was told that any decision to ban an app required the personal approval of the chief executive, Mark Zuckerberg…

OK, to summarize: Mark Zuckerberg will be fine, apart from some stock losses. Facebook’s data use policies may not conform to every single piece of legislation in every country Facebook operates in, but they’ve been there since 2004. So lawmakers are as culpable as the company is.

There’ll be big words, lots of them. And there may be people leaving Facebook. But the platform is addictive, and 2 billion addicts is a very large target group. Some other company may develop a competitor and promise ‘better’ policies and conditions, but the big money is in the very thing discussed today: manipulating people’s data, and thereby manipulating their behavior.

Perhaps if news media and advertizers were so inclined, they’d explain to their readers and viewers exactly that, but in the end they A) all do it to some extent, and B) are all connected to Facebook and Google to some extent.

But the main driving force is and will remain the intelligence agencies, who have come to depend on ‘social media’ for the one thing they themselves were incapable of providing, but saw Alphabet and Facebook incite gullible people themselves to provide: an artificial intelligence driven database that knows more about you than you know yourself.

That the intelligence community today is powered by artificial intelligence is pretty out there to start with. That AI would give it the means to predict your future behavior, and manipulate you into that behavior seemingly at will, is something that warrants reflection.

George Orwell could not have foreseen this.

 

 

Mar 172018
 
 March 17, 2018  Posted by at 2:16 pm Finance Tagged with: , , , , , , , , , , , ,  


Jacobello Alberegno The Beast of the Apocalypse 1360-90

 

The Guardian ran an article yesterday by one of its editors, David Shariatmadari, that both proves and disproves its own theme at the same time: “An Information Apocalypse Is Coming”. Now, I don’t fancy the term apocalypse in a setting like this, it feels too much like going for a cheap thrill, but since he used it, why not.

My first reaction to the headline, and the article, is: what do you mean it’s ‘coming’? Don’t you think we have such an apocalypse already, that we’re living it, we’re smack in the middle of such a thing? If you don’t think so, would that have anything to do with you working at a major newspaper? Or with your views of the world, political and other, that shape how you experience ‘information’?

Shariatmadari starts out convincingly and honestly enough with a description of a speech that JFK was supposed to give in Dallas right after he was murdered, a speech that has been ‘resurrected’ using technology that enables one to make it seem like he did deliver it.

 

An Information Apocalypse Is Coming. How Can We Protect Ourselves?

“In a world of complex and continuing problems, in a world full of frustrations and irritations, America’s leadership must be guided by the lights of learning and reason, or else those who confuse rhetoric with reality, and the plausible with the possible will gain the popular ascendancy with their seemingly swift and simple solutions to every world problem.”

John F Kennedy’s last speech reads like a warning from history, as relevant today as it was when it was delivered in 1963 at the Dallas Trade Mart. His rich, Boston Brahmin accent reassures us even as he delivers the uncomfortable message. The contrast between his eloquence and the swagger of Donald Trump is almost painful to hear.

Yes, Kennedy’s words are lofty ones, and they do possess at least some predictive qualities. But history does play a part too. Would we have read the same in them that we do now, had Kennedy not been shot right before he could deliver them? Hard to tell.

What’s more, not long before JFK was elected president America had been in the tight and severe grip of J. Edgar Hoover and Joseph McCarthy’s anti-communist campaign, in which lots of reality was replaced with rhetoric, something Kennedy undoubtedly had in mind while writing the speech. JFK was not just addressing future threats, he was talking about the past as well.

But the writer slips into a much bigger faux pas right after: injecting Trump into the picture. It’s fine if someone doesn’t like Trump, but naming him there and then, in an article about ‘information apocalypse’, also means confusing objectivity with regards to your topic with subjectivity concerning your political ideas. While the Kennedy speech item relates to -advancing(?)- technology, a valid part of the apocalypse, mentioning Trump has nothing to do with that apocalypse, at least not objectively. Back to David Shariatmadari:

The problem is, Kennedy never spoke these words. He was killed before he made it to the Trade Mart. You can only hear them now thanks to audio technology developed by a British company, CereProc. Fragments of his voice have been taken from other speeches and public appearances, spliced and put back together, with neural networks employed to mimic his natural intonation. The result is pretty convincing, although there’s a machine-like ring to some of the syllables, a synthetic stutter. Enough to recognise, if you already know, that this is a feat of technology, not oratory.

We like to think of innovation as morally neutral. We empower scientists and engineers to range freely in the hope they might discover things that save labour and lives. The ends to which these are put aren’t the responsibility of the researchers. The agile robots produced by Boston Dynamics might look like they could cheerfully pin you up against a wall and snap your neck, but do we really want to close off this avenue of research? After all, they might equally be capable of performing life-saving surgery. The methods used to resurrect JFK can also help people with illnesses such as motor neurone disease – like the late Stephen Hawking – that affect their ability to speak.

It’s certainly true that we are so ‘geared’ towards progress, we ‘conveniently’ forget and ignore that every next step carries its own shadow side, every yin comes with its yang. ‘Progress’ and ‘innovation’ – and related terms- ring so positive in our eyes and ears it borders on -wilful- blindness. That blindness is set to play a major role in our future, and in our acceptance as gospel of a lot of ‘information’.

“Dual use” of technology is not a new problem. Nuclear physics gave us both energy and bombs. What is new is the democratisation of advanced IT, the fact that anyone with a computer can now engage in the weaponisation of information; 2016 was the year we woke up to the power of fake news, with internet conspiracy theories and lies used to bolster the case for both Brexit and Donald Trump.

Ouch! See, he does it again. This is not an objective discourse on ‘information disinformation’, but a way to make people think -through a method he’s supposed to be exposing- that ‘fake news’ led to Brexit and Trump. That’s a political view, not a neutral one. Yes, there are many voices out there who connect ‘fake news’ directly to things they don’t like, but that’s just a trap.

And as I said, it may have to do with the fact that the writer works for a major newspaper, which of course he wants to, and wishes to, see as some kind of beacon against fake news, but if he lets his own personal views slip into an objective treatment of a topic this easily, it automatically becomes self-defeating.

There is no proof that Trump and Brexit’s success are down to fake news more than their opposite sides, ‘fake news’ is everywhere, and that very much includes the Guardian. The coverage of the UK government accusations against Russia in the poisoning case proves that more than ever.

You can be anti-Trump, anti-Brexit and anti-Putin all you want, but they don’t define fake news or an information apocalypse, any more than ‘commies’ did in the days of Hoover and McCarthy.

We may, however, look back on it as a kind of phoney war, when photoshopping and video manipulation were still easily detectable. That window is closing fast. A program developed at Stanford University allows users to convincingly put words into politicians’ mouths. Celebrities can be inserted into porn videos. Quite soon it will be all but impossible for ordinary people to tell what’s real and what’s not.

That is am almost bewildering line. Does the writer really think ‘ordinary people’ can today tell apart what’s real and what’s not? If his paper had honestly covered his country’s, and his government’s, involvement in the wars all over the Middle East and North Africa over the past decades, would his readers still be supportive of the politicians that today inhabit Westminster?

Or does the paper prefer supporting the incumbents over Nigel Farage and Donald Trump, because it owes its reputation and position and revenues to supporting the likes of Theresa May and Tony Blair? Yeah, I know, with a critical view, yada yada, but when has the Guardian labeled any UK politician a war criminal? Much easier to go after Farage, isn’t it? The question is: what part of this is fake, and what is not?

What will the effects of this be? When a public figure claims the racist or sexist audio of them is simply fake, will we believe them? How will political campaigns work when millions of voters have the power to engage in dirty tricks? What about health messages on the dangers of diesel or the safety of vaccines? Will vested interests or conspiracy theorists attempt to manipulate them?

This appears to make sense, but it does not really. We are way past that. ‘Ordinary people’ have already lost their capacity to tell truth from fiction. Newspapers and TV stations have long disseminated the views of their owners, it’s just that they now have -newfound- competition from a million other sources: the blessings of social media.

The core issue here is that 1984 is not some point in the future, as we for some reason prefer to think. We are living 1984. Perhaps the fact that we are now 34 years past it should give us a clue about that? People tend to think that perhaps Orwell was right, but his predictions were way early. Were they, though?

Also: Orwell may not have foreseen the blessings and trappings of social media, but he did foresee how governments and their media sympathizers would react to them: with more disinformation.

Unable to trust what they see or hear, will people retreat into lives of non-engagement, ceding the public sphere to the already powerful or the unscrupulous? The potential for an “information apocalypse” is beginning to be taken seriously.

This is a full-blown time warp. If it is true that people only now take the potential for an “information apocalypse” seriously, they are so far behind the curve ball that one must question the role of the media in that. Why didn’t people know about that potential when it was an actual issue? Why did nobody tell them?

The problem is we have no idea what a world in which all words and images are suspect will look like, so it’s hard to come up with solutions.

Yes, we do have an idea about that, because we see it around us 24/7. Maybe not with images as fully fabricated as the JFK speech, but the essence is manipulation itself, not the means by which it’s delivered.

Perhaps not very much will change – perhaps we will develop a sixth sense for bullshit and propaganda, in the same way that it has become easy to distinguish sales calls from genuine inquiries, and scam emails with fake bank logos from the real thing.

David, we ARE all bullshitters, we all lie all the time, for a myriad of reasons, to look better, to feel better, to seem better, to get rich, to get laid. It’s who we are. We lie to ourselves most of all. A sixth sense against bullshit and propaganda is the very last thing we will ever develop, because it would force us to face our own bullshit.

But there’s no guarantee we’ll be able to defend ourselves from the onslaught, and society could start to change in unpredictable ways as a result. Like the generation JFK was addressing in his speech, we are on the cusp of a new and scary age. Rhetoric and reality, the plausible and the possible, are becoming difficult to separate. We await a figure of Kennedy’s stature to help us find a way through. Until then, we must at the very least face up to the scale of the coming challenge.

We are not “on the cusp of a new and scary age”, we are in the smack middle of it. We haven’t been able to separate rhetoric and reality, the plausible and the possible, for ages. What’s different from 100 years ago, or 50 years ago, is that now we are faced with an information overload so severe that this in itself makes us less capable of separating chaff from wheat.

So yes, that perhaps is new. But bullshit and propaganda are not. And labeling Trump and Brexit the main threats misses your own topic by miles. You could make an equally valid point that they are the results of many years of bullshit and propaganda by old-style politics and old-style media.

Maybe they’re what happens when ‘ordinary people’ switch off from an overload of bullshit and propaganda forced upon them by people and institutions they grew up to trust. And then feel they were betrayed by. A sixth sense after all.

 

 

Nov 132017
 
 November 13, 2017  Posted by at 2:17 pm Finance Tagged with: , , , , , , , , , , ,  


Jackson Pollock Man with knife 1940

 

There can be little doubt that the British, in general, have a sense of humor. And that’s perhaps the lens through which we should view the country these days. After all, what other options do we have? A comment yesterday to a Guardian article sums up the situation quite perfectly in just a few words (note: Dignitas has something to do with assisted dying):

Brexit is rapidly becoming like someone who booked a trip to Dignitas when they were told they were dying and has now been told there’s a cure. But they’re going to Switzerland anyway, because they can’t face dealing with Ryanair’s customer service team.

There are two main British political parties, Tories and Labour, which fight each other whenever and wherever they can. Moreover, each party has several camps that fight each other even more, if at all possible. The George W.- friendly Tony Blair Orchestra in the Labour Party seems to have lost out to the actually left-wing Jeremy Corbynistas for now, but they won’t give up without a fight (power is their only hobby). Blair is still commenting from the sidelines on Corbyn’s perceived follies while his faithful lament about how their Tone was misled by 43 into bombing Iraq.

The Tories have gone full-monty Monty Python. John Cleese et al must feel at least a pang of jealousy. 40 Tory MPs have allegedly gathered to demand for PM Theresa May to quit. A whole bunch of both Labour and Tory lawmakers threaten to tackle her over not allowing them a vote in any Brexit deal (which for now is entirely hypothetical). Other voices across party lines demand the resignation -or sacking- of foreign not-so-very-ministerial Boris Johnson.

One Tory MP, the Rt. Hon. John Redwood MP, who’s also Chief Global Strategist for Charles Stanley, wrote an op-ed in the FT telling investors to pull their money out of the UK. You can’t make that kind of stuff up. Or you can, but no-one would believe a word. The Python crew would have never made a dime if they had started out today, because life in Britain has now seriously trumped art. When the other guys are funnier without even trying, maybe comedy’s not your thing.

And that’s how we slide seamlessly right down into Theresa May and the Holy Grail, the probably best representation of what is going on. May never wanted a Brexit, but she’s so power hungry that she jumped at a chance of defending what she doesn’t believe in. By the way, apart maybe from Corbyn, all the actors in this comedy are in it not because they care for their country, but for themselves, exclusively. Brilliant video, by the way.

 

 

Not that Brexit is necessarily such a terrible thing. Putting distance between yourselves and the European Union may well be the most sensible thing there is. Because Brussels is now defined more than anything by what it has done -and failed to do- to Greece, to the refugees and to Catalonia. And it will never be able to shake that off. The EU, just like the UK, is ruled by people who care only about themselves. Our political systems self-select for sociopaths, with precious few exceptions.

Even if you see Brexit as a purely economical move, which most people do even though it’s very much not true, the British people should rejoice knowing that they won’t be the ones forking over for the next pan-European bank bailout. Then again, they’ll have to bail out their own banks. Which have grown way out of hand, the price paid for wanting to become a global finance center.

Nor will the British people be forced to pay up for the newly-revived, scary-as-hell and unholy idea of a European army, an idea that originated in the 1950s and has re-gained support the very moment Britain voted for Brexit:

 

EU To Sign Defense Pact, May Allow Limited British Role

France, Germany and 20 other EU governments are set to sign a defense pact on Monday they hope marks a new era of European military integration to cement unity after Britain’s decision to quit the bloc. In Europe’s latest attempt to lessen its reliance on the United States, the 22 governments will create a formal club that should give the European Union a more coherent role in tackling international crises.

“We’ve never come this far before,” said a senior EU official said of EU defense integration efforts that date back to a failed bid in the 1950s. “We are in a new situation.” The election of pro-European Emmanuel Macron as France’s president and warnings by U.S. President Donald Trump that European allies must pay more towards their security have propelled the project forward, diplomats said.

[..] A system to spot weaknesses across EU armed forces, in coordination with U.S.-led NATO, is due to start in a pilot stage, while a multi-billion-euro EU fund to support the pact is still under negotiation. Long blocked by Britain, which feared the creation of an EU army, defense integration was revived by France and Germany after Britons voted to leave the EU in June 2016.

[..] London is not part of the initiative but British officials have been pressing for third country involvement. Britain’s aerospace industry and its biggest defense firm BAE Systems fear losing out, diplomats said. Britain may be able to join in, but only on an exceptional basis if it provides substantial funds and expertise.

They don’t even know who’ll be the leader of this European Army. There are plenty of reasons this was voted down 60 years ago and left in the dustbin ever since. A German supreme commander, anyone? The female German minister of defence just yesterday let slip that she supports regime change in Poland. That’s all you should need to know.

This is presented in Brussels as a money saver. European countries have too many different weapons systems, is the reasoning, and need to become ‘more efficient’. I bet you right here and now that it will cost Europe an arm and an extra leg or two-three. But not Britain. Which can also, simultaneously, if and when sensible people are in office, ditch its grandiose notions of being an empire or world power, and cut its armed forces by 50 or 75%.

And while they’re at it, cut its arms industry into little pieces and flush them down the Thames. Brexit can be an opportunity, a chance for the country to fully re-invent itself. But first, the Python-styled tragic comedy starring Theresa and Boris will have to be played to its tragic finale. To that end, and since it just wouldn’t feel fair to leave him out, let’s make sure we reserve a role for George Orwell as well – it comes natural:

 

UK Government Tensions Rise After Leak Of ‘Orwellian’ Memo Sent To May

The tensions in Theresa May’s government intensified on Sunday night ahead of this week’s vital votes on the Brexit bill, as ministers accused Boris Johnson and Michael Gove of sending an “Orwellian” set of secret demands to No 10. As an increasingly weakened prime minister faces the possibility of parliamentary defeats on the bill, government colleagues have said they are aghast at the language used by the foreign secretary and the environment secretary in a joint private letter.

The leaked letter – a remarkable show of unity from two ministers who infamously fell out during last year’s leadership campaign – appeared to be designed to push May decisively towards a hard Brexit and limit the influence of former remainers. It complained of “insufficient energy” on Brexit in some parts of the government and insisted any transition period must end in June 2021 – a veiled attack on the chancellor, Philip Hammond.

A decision as big and defining as Brexit should always have been executed by a government, or a coalition, in which as broad a spectrum of the population as possible is represented. It’s crazy to let just one party push through their version, especially when views are so divergent and tensions run this high. The Tories have just a slight majority.

But really, all Labour have to do is wait until May and Boris and Gove and all the others run out of gas and their engine seizes. They lost two ministers in a week and more will follow. So Labour makes a peace offer, knowing full well it won’t be accepted, but has to be made just for form.

As per tomorrow, May’s EU Withdrawal Bill will be discussed in Parliament and the next episode of Theresa May and the Holy Grail can start. John Cleese will be watching, thinking every five minutes: “Why didn’t I think of that?”. The Bill will be ripped to shreds, between a Hard Brexit and a No Brexit side, and hundreds of amendments, and May will be ripped along with it.

Even her chances of lasting just the week are slim. She has to turn to Labour for support, but she can’t. If she does, Boris will smell his opportunity for the top post. He might even get it, but that would lead to something awfully close to civil war; still, maybe that’s inevitable anyway, and perhaps it would be a good thing. Cards on the table.

 

UK Labour Makes Brexit Offer to May as Future in Balance

Keir Starmer, the party’s Brexit spokesman, wrote to May on Monday telling her there was a “sensible majority” in Parliament to secure a two-year transition deal for after Brexit. That would allow Britain to stay inside the European Union’s single market and customs union after 2019 while it completes trade talks with the bloc. He said the opposition to such an arrangement came from Conservatives.

“Over recent weeks, it has become increasingly clear that you alone do not have the authority to deliver a transitional deal with Europe and to take the necessary steps to protect jobs and the economy,” Starmer wrote in the letter, which was released by his office.

May is unlikely to welcome Labour’s offer, which highlights the fragility of her position. The premier, who lost two cabinet ministers in a week to different scandals, has received a letter from pro-Brexit rival Boris Johnson demanding a bolder approach to the divorce, the Mail on Sunday reported. And 40 Conservative lawmakers back a challenge to her leadership, The Sunday Times said, just eight short of the number that triggers a vote.

[..] May’s landmark Brexit legislation, the EU Withdrawal Bill, returns to Parliament on Tuesday, where it faces hundreds of proposed amendments to be considered over eight days of debate. Even with the backing of Northern Ireland’s Democratic Unionist Party, May only has a slim majority. Tories who want to keep close ties to the EU have put their names on many of the measures, suggesting the government will have to back down or be defeated.

They’re talking about dates and timelines to present proposals to the EU, but they’ll never agree on any. And even if they do, Brussels will be ready to tear them to pieces. It’s hard to see how a Brexit will ever happen, but it’s easy to see that if it ever does, it’ll be an absolutely fabulous mess. And then even John Cleese won’t be laughing anymore.

 

 

Nov 132017
 
 November 13, 2017  Posted by at 9:42 am Finance Tagged with: , , , , , , , , , ,  


Mark Twain in Nikola Tesla’s lab 1894

 

John Hussman Forecasts A Decade Of Stock Losses (BI)
One In Five American Households Have ‘Zero Or Negative’ Wealth (MW)
Top Tech Stocks’ $1.7 Trillion Gain Eclipses Canada’s Economy (BBG)
Bitcoin Plunges 29% From Record High (BBG)
The End Of “The End Of History” (Luongo)
Warnings From the “China Beige Book” (Rickards)
UK Government Tensions Rise After Leak Of ‘Orwellian’ Memo Sent To May (G.)
More Than A Third Of UK Home Sellers Cut Asking Price (G.)
Fossil Fuel Burning Set To Hit Record High In 2017 (G.)
The Decisions Behind Monsanto’s Weed-Killer Crisis (R.)
Weed-Killer Prompts Angry Divide Among US Farmers (AFP)
Millions On Brink Of Famine In Yemen As Saudi Arabia Tightens Blockade (G.)

 

 

Big fall, big rise and an even bigger fall.

John Hussman Forecasts A Decade Of Stock Losses (BI)

As the equity bull market has climbed into rarefied air, investors have continuously come up with new ways to rationalize the rally. Right now, they like to cite earnings growth, which has expanded for several quarters after a prolonged rough patch. They also frequently mention interest rates that, despite hawkish signals from central banks, have remained low, supplying the market with a seemingly endless supply of cheap money. On the other side of the spectrum, John Hussman, the president of the Hussman Investment Trust and a former economics professor, thinks that the investment community is unwisely ignoring the most stretched valuations in history on the heels of a nearly 300% bull market run. Ever the outspoken bear, Hussman says investors are being willfully ignorant, which has stocks at risk of a drop that could reach 63% and send the market spiraling into a full decade of negative returns.

It wouldn’t be the first time in history this has happened. But Hussman thinks this crash will be different, because the reasons for market instability are “purely psychological” this time around, according to a recent blog post. At the root of Hussman’s pessimistic market view are stock valuations that look historically stretched by a handful of measures. According to his preferred valuation metric — the ratio of non-financial market cap to corporate gross value-added (Market Cap/GVA) — stocks are more expensive than they were in 1929 and 2000, periods that immediately preceded major market selloffs. “US equity market valuations at the most offensive levels in history,” he wrote in his November monthly note. “We expect that more extreme valuations will only be met by more severe losses.”

Those losses won’t just include the 63% plunge referenced above – it’ll also be accompanied by a longer 10 to 12 year period over which the S&P 500 will fall, says Hussman. He cites the chart below, which shows how closely 12-year expected returns for the benchmark have historically tracked Market Cap/GVA, which is shown in inverted fashion. Note that the expected trajectory for Market Cap/GVA shows the S&P 500 veering into negative territory. The psychology behind the market’s willingness to accept lofty stock valuations stems from the flawed rationale that prices are justified by low interest rates, says Hussman. To him, the US economy is growing too slowly for this to be true, and that any belief to the contrary gives people false confidence.

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While other reports say some 70% live paycheck to paycheck. Which one is true? At least it should be clear that the US is not doing well at all.

One In Five American Households Have ‘Zero Or Negative’ Wealth (MW)

Millions of Americans are living on the edge. One in five households has zero or negative wealth, according to a report released this week by the Institute for Policy Studies, a progressive think tank based in Washington, D.C. What’s more, an even greater share of African-American (30%) and Latino (27%) households are “underwater” financially. The combined impact of $1 trillion in credit-card debt, $1.4 trillion in student loan debt, and stagnant wages are taking a toll. U.S. homes have regained value since the Great Recession, but many households have not. “Millions of American families struggle with zero or negative wealth, meaning they owe more than they own,” the report found. “This means that they have nothing to fall back on if an unexpected expense comes up like a broken down car or illness.” And inequality could get worse through new tax cuts for the wealthy.

President Trump’s tax proposals won’t give America’s middle class the reprieve they need to grow their wealth and recover from the financial crash, said Josh Hoxie, who heads up the Project on Opportunity and Taxation at the Institute for Policy Studies. A recent analysis by the Joint Committee on Taxation concluded that taxes would decline for all income groups, with the biggest percentage-point decline for millionaires. After-tax income would rise by nearly 7% for households earning over $1 million per year, compared to less than 2% for those earning between $50,001 and $1 million, as MarketWatch recently reported. And less than 1% for those earning less than $50,000, according to Ernie Tedeschi, an economist at Evercore IS investment banking advisory firm who worked in the Treasury Department under President Obama.

Looking at private income, such as earnings and dividends, and government benefits like Social Security, the income of families near the top increased roughly 90% from 1963 to 2016, while the income of families at the bottom rose less than 10%, according to a separate report released last month by the Urban Institute, a nonprofit policy group based in Washington, D.C., while most other groups have been left behind. And that gap between rich and poor is only going to get worse, Hoxie said. The wealthiest 25 individuals in the U.S., including co-founder Bill Gates, Amazon CEO Jeff Bezos and Facebook CEO Mark Zuckerberg, own $1 trillion in combined assets. These 25 — a group equivalent to the active roster of a major league baseball team — hold more wealth than the bottom 56% of the U.S. population.

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Completely nuts.

Top Tech Stocks’ $1.7 Trillion Gain Eclipses Canada’s Economy (BBG)

Between the FAANG quintet and China’s rivaling BAT companies, gains in the world’s top technology shares are nearing a whopping $1.7 trillion in market value this year. That’s more than Canada’s entire economy, and exceeds the worth of Germany’s biggest 30 companies put together. The eight tech giants – Facebook, Amazon, Apple, Netflix and Google parent Alphabet, as well as their Asian peers Baidu, Alibaba and Tencent – have amassed as much money in 2017 as PIMCO, one of the world’s biggest fund managers, has done in about 46 years. While the stocks have seen a meteoric rise this year, their combined market value came off highs last week amid a global selloff in which the year’s high flyers had a bigger retreat. A recent breakdown in the correlation between high-yield bonds and the tech-heavy Nasdaq 100 Index suggests the slide in junk may spread further.

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Confidence.

Bitcoin Plunges 29% From Record High (BBG)

Bitcoin plunged as the cancellation of a technology upgrade prompted some users to switch out of the cryptocurrency, spooking speculators who had profited from a more than 800% surge this year. The cryptocurrency has dropped 9.5% since late Friday, extending its slide from last week’s record to as much as 29%, according to data compiled by Coinmarketcap.com and Bloomberg. Bitcoin cash, a rival that split from the original bitcoin in August, has jumped nearly 40% since Friday. Bitcoin cash is gaining popularity because of its larger block size, a characteristic that makes transactions cheaper and faster than the original. When a faction of the cryptocurrency community canceled plans to increase bitcoin’s block size on Wednesday – a move that would have created another offshoot – some supporters of bigger blocks rallied around bitcoin cash.

The resulting volatility has been extreme even by bitcoin’s wild standards and comes amid growing interest in cryptocurrencies among regulators, banks and fund managers. While skeptics have called bitcoin’s rapid advance a bubble, it has become too big for many on Wall Street to ignore. Even after shrinking by as much as $38 billion since Wednesday, bitcoin boasts a market value of $101 billion. Supporters of bitcoin’s technology upgrade “are now switching support to bitcoin cash,” said Mike Kayamori, head of Tokyo-based Quoine, the world’s second most-active bitcoin exchange over the past day. “There’s a panic about what’s happening. People shouldn’t panic. Just hold on to both coins until we see how it plays out.”

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A different view from most.

The End Of “The End Of History” (Luongo)

The path to draining the swamp is a circuitous one but, in my mind, it’s hard to argue where things are headed. They are not headed towards confrontation with Iran but actually the opposite. The most rabidly anti-Iranian segment of the Saudi Royal house is impoverished and imprisoned. CNN will be sold and go out of business to allow for the Time-Warner/AT&T merger. Jeff Zucker is out. Add another scalp to Steve Bannon’s belt along with Harvey Weinstein, Kevin Spacey and so many to come. Will the vestiges of the neoconservative establishment in the U.S. and Israel continue to sabre-rattle and try to undermine what is happening? Yes.

They’ve been doing that since the day Trump was elected just over a year ago, but it hasn’t stopped the momentum. Why? Because Putin was on the job outmaneuvering them at every turn. Trump made a deal with the neocons back in August to cede them control of foreign policy and, in effect, outsourced cleaning up the Middle East to Putin. But, predictably they also didn’t follow through with their end of the bargain. Trump learned, like Putin did, the John McCain’s of the world don’t keep to their deals. They are ‘not agreement capable.’ And, as such, since the last failure to repeal Obamacare Trump has gone after every pillar of support these people had. It will end with Hillary Clinton’s indictment. But in the meantime it will look like the world is on the brink of world war.

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“Xi is ready to undertake reform of the financial system, which means shutting down insolvent companies and banks.”

Warnings From the “China Beige Book” (Rickards)

The China Beige Book, CBB, says that China had been covering up and smoothing over problems related to weak growth and excessive debt in order to provide a calm face to the world in advance of the National Congress of the Communist Party of China, which took place last month. CBB also makes it clear that the much-touted “rebalancing” of the Chinese economy away from investment and manufacturing toward consumption and spending has not occurred. Instead China has doubled down on excess capacity in coal, steel and manufacturing and has continued its policy of wasteful investment fueled with unpayable debt. It’s become obvious that the first cracks are starting to appear in China’s Great Wall of Debt. The Chinese debt binge of the past 10 years is a well-known story.

Chinese corporations have incurred dollar-denominated debts in the hundreds of billions of dollars, most of which are unpayable without subsidies from Beijing. China’s debt-to-equity ratio is over 300%, far worse than America’s (which is also dangerously high) and comparable to that of Japan and other all-star debtors. China’s trillion-dollar wealth management product (WMP) market is basically a Ponzi scheme. New WMPs are used to redeem maturing WMPs, while most of the market is simply rolled over because the underlying real estate and infrastructure projects cannot possibly repay their debts. A lot of corporate lending is simply one company lending to another, which in turns lends to another, giving the outward appearance of every company holding good assets, but in which none of the companies can actually pay its creditors.

It’s an accounting game with no real money behind it and no chance of repayment. All of this is well-known. What is not known is when it will end. When will confidence be lost in such a way that the entire debt house of cards crumbles? When will a geopolitical shock or natural disaster trigger a loss of confidence that ignites a financial panic? There was little prospect of this in the past year because President Xi Jinping was keeping a lid on trouble before the recently concluded National Congress of the Communist Party of China. With the congress behind him, Xi is ready to undertake reform of the financial system, which means shutting down insolvent companies and banks. Now the first bankruptcies have begun to appear.

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None of these people give one hoot about their country. They care about themselves only.

UK Government Tensions Rise After Leak Of ‘Orwellian’ Memo Sent To May (G.)

The tensions in Theresa May’s government intensified on Sunday night ahead of this week’s vital votes on the Brexit bill, as ministers accused Boris Johnson and Michael Gove of sending an “Orwellian” set of secret demands to No 10. As an increasingly weakened prime minister faces the possibility of parliamentary defeats on the bill, government colleagues have said they are aghast at the language used by the foreign secretary and the environment secretary in a joint private letter. The leaked letter – a remarkable show of unity from two ministers who infamously fell out during last year’s leadership campaign – appeared to be designed to push May decisively towards a hard Brexit and limit the influence of former remainers. It complained of “insufficient energy” on Brexit in some parts of the government and insisted any transition period must end in June 2021 – a veiled attack on the chancellor, Philip Hammond.

They urged the prime minister to ensure members of her top team fall behind their Brexit plans by “clarifying their minds” and called for them to “internalise the logic”. But the leak drew a bitter response from supporters of a soft Brexit, who suggested that May would now be forced to either discipline the pair or further weaken her position, which has already been tested by the recent resignations of Priti Patel and Michael Fallon and continuing pressure on Johnson and Damian Green. One cabinet minister told the Guardian: “It is not surprising that they [Gove and Johnson] would express their view. But what is surprising is that they would write this down and use this kind of language in a letter to the prime minister. “Some have described it as Orwellian, and it is. It is not helpful when people try and press their views in untransparent way.”

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It’s just starting. London falling.

More Than A Third Of UK Home Sellers Cut Asking Price (G.)

More than a third of home owners trying to sell their house have been forced to reduce their asking price, with the number of price cuts at their highest level since 2012, according to Rightmove. Traditionally house sellers are often forced to cut asking prices in the pre-Christmas period but this year the nation appears to be holding a collective autumn sale, said the property website. Rightmove, which claims to list 90% of the houses being sold in the UK, said 37% of current sellers had dropped their asking price, with a typical 0.8% or £2,392 price reduction. It also warned that those who recently put their property on the market were being too optimistic by not discounting by more. The mass price cut will be seen as further evidence that the market has slowed dramatically, particularly in London where prices have been falling.

Last week the Royal Institution of Chartered Surveyors said the overall UK property market had stalled. Rics also warned that it expected the market to remain subdued in the coming months as sales stay flat or fall in most regions. Rightmove director, Miles Shipside, said the slowdown in the housing market, the recent interest rate rise and the prediction that further rises were on the horizon suggested bigger reductions in house prices in the near future. “Given that the market has been price-sensitive for a while and a five-year high proportion of sellers are slashing their prices, some sellers and their agents are over-pricing. These sellers may well be asking themselves if they could have saved some time and stress by pricing a lot more conservatively at the start.”

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As you’re being pleasantly entertained with that dumb Paris agreement.

Fossil Fuel Burning Set To Hit Record High In 2017 (G.)

The burning of fossil fuels around the world is set to hit a record high in 2017, climate scientists have warned, following three years of flat growth that raised hopes that a peak in global emissions had been reached. The expected jump in the carbon emissions that drive global warming is a “giant leap backwards for humankind”, according to some scientists. However, other experts said they were not alarmed, saying fluctuations in emissions are to be expected and that big polluters such as China are acting to cut emissions. Global emissions need to reach their peak by 2020 and then start falling quickly in order to have a realistic chance of keeping global warming below the 2C danger limit, according to leading scientists. Whether the anticipated increase in CO2 emissions in 2017 is just a blip that is followed by a falling trend, or is the start of a worrying upward trend, remains to be seen.

Much will depend on the fast implementation of the global climate deal sealed in Paris in 2015 and this is the focus of the UN summit of the world’s countries in Bonn, Germany this week. The nations must make significant progress in turning the aspirations of the Paris deal into reality, as the action pledged to date would see at least 3C of warming and increasing extreme weather impacts around the world. The 12th annual Global Carbon Budget report published on Monday is produced by 76 of the world’s leading emissions experts from 57 research institutions and estimates that global carbon emissions from fossil fuels will have risen by 2% by the end of 2017, a significant rise.

“Global CO2 emissions appear to be going up strongly once again after a three-year stable period. This is very disappointing,” said Prof Corinne Le Quéré, director of the Tyndall Centre for Climate Change Research at the UK’s University of East Anglia and who led the new research. “The urgency for reducing emissions means they should really be already decreasing now.” “There was a big push to sign the Paris agreement on climate change but there is a feeling that not very much has happened since, a bit of slackening,” she said. “What happens after 2017 is very open and depends on how much effort countries are going to make. It is time to take really seriously the implementation of the Paris agreement.” She said the hurricanes and floods seen in 2017 were “a window into the future”.

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Farmers are using dicamba because they get it on their crops anyway from the neighbors. There’s not much time left to stop Monsanto from effectively owning all our food.

The Decisions Behind Monsanto’s Weed-Killer Crisis (R.)

In early 2016, agri-business giant Monsanto faced a decision that would prove pivotal in what since has become a sprawling herbicide crisis, with millions of acres of crops damaged. Monsanto had readied new genetically modified soybeans seeds. They were engineered for use with a powerful new weed-killer that contained a chemical called dicamba but aimed to control the substance’s main shortcoming: a tendency to drift into neighboring farmers’ fields and kill vegetation. The company had to choose whether to immediately start selling the seeds or wait for the U.S. Environmental Protection Agency (EPA) to sign off on the safety of the companion herbicide. The firm stood to lose a lot of money by waiting.

Because Monsanto had bred the dicamba-resistant trait into its entire stock of soybeans, the only alternative would have been “to not sell a single soybean in the United States” that year, Monsanto Vice President of Global Strategy Scott Partridge told Reuters in an interview. Betting on a quick approval, Monsanto sold the seeds, and farmers planted a million acres of the genetically modified soybeans in 2016. But the EPA’s deliberations on the weed-killer dragged on for another 11 months because of concerns about dicamba’s historical drift problems. That delay left farmers who bought the seeds with no matching herbicide and three bad alternatives: Hire workers to pull weeds; use the less-effective herbicide glyphosate; or illegally spray an older version of dicamba at the risk of damage to nearby farms.

The resulting rash of illegal spraying that year damaged 42,000 acres of crops in Missouri, among the hardest hit areas, as well as swaths of crops in nine other states, according to an August 2016 advisory from the U.S. Environmental Protection Agency. The damage this year has covered 3.6 million acres in 25 states, according to Kevin Bradley, a University of Missouri weed scientist who has tracked dicamba damage reports and produced estimates cited by the EPA. The episode highlights a hole in a U.S regulatory system that has separate agencies approving genetically modified seeds and their matching herbicides.

Monsanto has blamed farmers for the illegal spraying and argued it could not have foreseen that the disjointed approval process would set off a crop-damage crisis. But a Reuters review of regulatory records and interviews with crop scientists shows that Monsanto was repeatedly warned by crop scientists, starting as far back as 2011, of the dangers of releasing a dicamba-resistant seed without an accompanying herbicide designed to reduce drift to nearby farms.

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“Farmers need it desperately,” said Perry Galloway. “If I get dicamba on (my products), I can’t sell anything,” responded Shawn Peebles.”

Weed-Killer Prompts Angry Divide Among US Farmers (AFP)

When it comes to the herbicide dicamba, farmers in the southern state of Arkansas are not lacking for strong opinions. “Farmers need it desperately,” said Perry Galloway. “If I get dicamba on (my products), I can’t sell anything,” responded Shawn Peebles. The two men know each other well, living just miles apart in the towns of Gregory and Augusta, in a corner of the state where cotton and soybean fields reach to the horizon and homes are often miles from the nearest neighbor. But they disagree profoundly on the use of dicamba. Last year the agro-chemical giant Monsanto began selling soy and cotton seeds genetically modified to tolerate the herbicide. The chemical product has been used to great effect against a weed that plagues the region, Palmer amaranth, or pigweed – especially since it became resistant to another herbicide, glyphosate, which has become highly controversial in Europe over its effects on human health.

The problem with dicamba is that it vaporizes easily and is carried by the wind, often spreading to nearby farm fields – with varying effects. Facing a surge in complaints, authorities in Arkansas early this summer imposed an urgent ban on the product’s sale. The state is now poised to ban its use between April 16 and October 31, covering the period after plants have emerged from the soil and when climatic conditions favor dicamba’s dispersal.

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This is who we are. This is caused by people we support, that we call our friends.

Millions On Brink Of Famine In Yemen As Saudi Arabia Tightens Blockade (G.)

Abdulaziz al-Husseinya lies skeletal and appears lifeless in a hospital in Yemen’s western port city of Hodeidah. At the age of nine, he weighs less than one and a half stone, and is one of hundreds of thousands of children in the country suffering from acute malnutrition. Seven million people are on on the brink of famine in war-torn Yemen, which was already in the grip of the world’s worst cholera outbreak when coalition forces led by Saudi Arabia tightened its blockade on the country last week, stemming vital aid flows. Al-Thawra hospital, where Abdulaziz is being treated, is reeling under the pressure of more than two years of conflict between the Saudi-led coalition and Iranian-allied Houthi rebels. Its corridors are packed, with patients now coming from five surrounding governorates to wait elbow-to-elbow for treatment.

Less than 45% of the country’s medical facilities are still operating – most have closed due to fighting or a lack of funds, or have been bombed by coalition airstrikes. As a result, Al-Thawra is treating some 2,500 people a day, compared to 700 before the conflict escalated in March 2015. [..] Aid agencies are now warning that Yemen’s already catastrophic humanitarian crisis could soon become a “nightmare scenario” if Saudi Arabia does not ease the blockade of the country’s land, sea and air ports – a move that the kingdom insists is necessary after Houthi rebels fired a ballistic missile towards Riyadh’s international airport this month. United Nations humanitarian flights have been cancelled for the past week and the International Committee of the Red Cross (ICRC), along with Médecins Sans Frontières (MSF), have been prevented from flying vital medical assistance into the country.

More than 20 million Yemenis – over 70% of the population – are in need of humanitarian assistance that is being blocked. Following international pressure, the major ports of Aden and Mukalla were reopened last week for commercial traffic and food supplies, along with land border crossings to neighbouring Oman and Saudi Arabia, but humanitarian aid and aid agency workers remained barred from entering the country on Sunday. UN aid chief Mark Lowcock has said if the restrictions remain, Yemen will face “the largest famine the world has seen for many decades, with millions of victims”.

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Mar 162017
 
 March 16, 2017  Posted by at 2:53 pm Finance Tagged with: , , , , , , ,  


Marc Riboud Sur les Quais de Paris 1953

 

The Dutch elections on Wednesday have provided a whole bunch of Orwellian narratives. PM Mark Rutte’s right wing VVD party, actually the ‘business’ -or should we say ‘rent-seekers’ in 2017- party, who lost some 20% of the seats they had obtained in the previous parliamentary election in November 2012, down from 41 to 33 seats, is declared the big winner. While Geert Wilders’ very right wing party, PVV, won 25% more seats -it went from 16 to 20- and is the big loser.

Moreover, Rutte’s coalition partner, labor PvdA, gave up 29 out of 38 seats to end up with just 9. That’s a loss of over 75%. Together, the coalition partners went from 79 seats in the 2012 election to 42 in 2017. That’s an almost 50% less. Not that it could prevent Rutte from proudly declaring: “We want to stick to the course we have – safe and stable and prosperous..” Makes you wonder who the ‘we’ are that he’s talking about.

That course he wants to stick to had a finance minister named Dijsselbloem, and his party just lost by over 75%. So he won’t be back. But perhaps the EU can pull another ‘Tusk’, and leave him in place in Brussels as chairman of the Eurogroup no matter what voters in his own country think of him. Still, declaring your intention to ‘stick to the course’ when your coalition has just been sawed in half, it’s quite something.

 

The only reasons Rutte’s VVD ended up being the biggest party all have to do with Wilders. The anxiety over the election all had to do with polls. Wilders is a one man party and a a one trick pony. If he would leave, his party would dissolve. And his sole ‘message’ is that Islam is bad and should vanish from first Holland and then Europe. He doesn’t really have any other political program points. Ok, there’s Brussels. Doesn’t like that either.

Perhaps that’s why he largely shunned the pre-election debates. Problem with that is, these things attract a lot of TV viewers, crucial free air-time. All in all, since he’s his own worst enemy in many respects, it’s not that much of a surprise that Wilders’ support collapsed, and that’s just if we were to take Dutch pollsters more serious than their counterparts in the US and UK.

Talking of which, according to Rutte, those are the countries where ‘the wrong kind of populism’ has won and delivered Trump and Brexit. And of course there are lots of people who agree with that. What either they, or Rutte himself, would label ‘the right kind of populism’ is unclear. Maybe Rutte himself is the right kind of populist?

 

The row with Turkey over the weekend must have helped Rutte quite a bit. Not only were his actions in the row met with approval by a large majority of the Dutch population, including just about all other party leaders, the Dutch also got to think about what WIlders would do in such a situation. And there can be no doubt that Rutte is seen as much more of a statesman than Wilders.

Not that the row is over. After Turkey announced yesterday it would return 40 Dutch cows (?!) , today Turkish Foreign Minister Cavusoglu said Europe’s politicians are “taking Europe toward an abyss”, and: “Soon religious wars will break out in Europe. That’s the way it’s going.” There can be no doubt that a shouting war like this with Wilders as one of the participants would take on a whole different shape, and a different choice of words.

What Rutte’s going to do next is form a new coalition, this time not with the left but with the center-right, and no-one will be able to tell the difference. If Dutch, and European, and global, politics have one main problem, it’s that. Left is right and right is left and winners are losers. If a guy like Dijsselbloem can squeeze Greek society dry in his capacity as Eurogroup head, while he runs as a leftist candidate in his own country, and loses hugely, anything goes.

 

All those who think they can see in the Dutch experience, a sign that Marine Le Pen’s chances in France’s presidential elections in April and May have dropped a lot, would appear to be delusional. Judging from reactions in the financial markets, many seem to be. But Le Pen is much less of a fringe figure than Wilders is, and she certainly wouldn’t shun a debate. It’s true that her Front National is a one-woman operation, bit she has a much clearer political program than Wilders does.

And she doesn’t have an opponent like Rutte, who’s become a formidable presence domestically, as anyone would be who can be PM for many years and not be put out by the curb. The man who should be Le Pen’s main adversary is not; Hollande is out by that curb and doesn’t even dare run again. His Socialist party has become a joke. The next strongest opponent should be François Fillon, but he’s all but gone now he’s been placed under formal investigation.

That leaves only Emmanual Macron, an independent without a party and without a program. In France, you can be elected president in such a situation, but your hand are tied in all sorts of ways, because you need parliament to vote for things.

..the nuances of the French political system put Macron in a spot of bother. The president derives their power from the support of a majority in the lower house of parliament, the National Assembly. Macron was a minister for the Socialist Party government but quit in 2016 to form his own political movement. Now he doesn’t even have a party, let alone a majority. Although the constitution of the French Fifth Republic, created by Charles De Gaulle in 1958, extended presidential powers, it did not enable the president to run the country.

There are only a few presidential powers that do not need the prime minister’s authorisation. The president can appoint a prime minister, dissolve the National Assembly, authorise a referendum and become a “temporary dictator” in exceptional circumstances imperilling the nation. They can also appoint three judges to the Constitutional Council and refer any law to this body. While all important tasks, this does not, by any stretch of the imagination, amount to running a country. The president can’t suggest laws, pass them through parliament and then implement them without the prime minister.

The role of a president is best defined as a “referee”. Presidential powers give the ability to oversee operations and act when the smooth running of institutions is impeded. So a president is able to step in if a grave situation arises or to unlock a standoff between the prime minister and parliament, such as by announcing a referendum on a disputed issue or by dismissing the National Assembly.

So, why does everyone see the president as the key figure? In a nutshell, it’s because the constitution has never been truly applied. There lies the devilish beauty of French politics. A country known since the 1789 revolution for its inability to foster strong majorities in parliament has succeeded, from 1962, in providing solid majorities.

Perhaps those who believe that what happened in Holland is also likely to happen in France are swayed by the notion that both are part of the EU. But they are very different countries and cultures, and different political systems. And Le Pen is no Wilders. She doesn’t say crazy things anymore, she’s cleansed the public image of her party by getting rid of her father, and she keeps any remaining extremists out of view.

There is still plenty suspicion in France about her, and about her party, but there are also a lot of people who agree with a lot of what she says. The perhaps most noteworthy statement she’s made recently is that she would step down if she loses the referendum about membership of the EU she intends to launch if elected president. That should keep Brussels on their toes. Marine means what she says. And a lot of French people may get to like her for that. In a political landscape in which the competition keeps shooting itself in the foot.

Another thing about Le Pen is that her political program contains quite a few bits and bolts that could be labeled leftist; a 35-hour work week, retirement at 60, lower energy prices. It’s just that she wants to reserve these things for the French. Foreigners, especially, Muslims, are not invited. And she is very much opposed to neo-liberalism and globalization:

They’ve made an ideology out of it. An economic globalism which rejects all limits, all regulation of globalization, and which consequently weakens the immune defences of the nation state, dispossessing it of its constituent elements: borders, national currency, the authority of its laws and management of the economy, thus enabling another globalism to be born and to grow: Islamist fundamentalism..

Le Pen’s popularity does not come from an overwhelming innate racism in France -though such a thing certainly exists-. It comes instead from the formidable failure that the country’s immigration policy has been for many decades. At the outskirts of major cities ghetto’s have been allowed to form in which those that come from former French colonies, especially in Africa, feel trapped with no way out. The French tend to feel superior to all other people, and the political system has let the situation slip completely out of hand.

Now France, and Europe is general, will have to deal with this mess. So far, the main European reaction is to turn Greece into a prison camp for a new wave of refugees and migrants. That can of course only make things worse. And it doesn’t solve any of the existing problems. Which makes the rise of Marine Le Pen inevitable.

And Wilders too; he’s the no. 2 party in Holland, because his party won 33% more seats than in 2012 to go from 15 to 20. That 33% gain, versus Rutte’s 20% loss, makes Wilders a loser in the eyes of many ‘relieved’ observers.

Winners are losers, and as is evident in Le Pen’s social policies for the French, in European coalition governments that contain Labor and right wing parties, and in the course of the Democratic party in the US, left is definitely the same as right.

Orwell always wins. Next problem: the actual left are not represented by anyone anymore.


MarcRiboud Sur les Quais de Paris 1953

 

The Dutch elections on Wednesday have provided a whole bunch of Orwellian narratives. PM Mark Rutte’s right wing VVD party, actually the ‘business’ -or should we say ‘rent-seekers’ in 2017- party, who lost some 20% of the seats they had obtained in the previous parliamentary election in November 2012, down from 41 to 33 seats, is declared the big winner. While Geert Wilders’ very right wing party, PVV, won 25% more seats -it went from 16 to 20- and is the big loser.

Moreover, Rutte’s coalition partner, labor PvdA, gave up 29 out of 38 seats to end up with just 9. That’s a loss of over 75%. Together, the coalition partners went from 79 seats in the 2012 election to 42 in 2017. That’s an almost 50% less. Not that it could prevent Rutte from proudly declaring: “We want to stick to the course we have – safe and stable and prosperous..” Makes you wonder who the ‘we’ are that he’s talking about.

That course he wants to stick to had a finance minister named Dijsselbloem, and his party just lost by over 75%. So he won’t be back. But perhaps the EU can pull another ‘Tusk’, and leave him in place in Brussels as chairman of the Eurogroup no matter what voters in his own country think of him. Still, declaring your intention to ‘stick to the course’ when your coalition has just been sawed in half, it’s quite something.

 

The only reasons Rutte’s VVD ended up being the biggest party all have to do with Wilders. The anxiety over the election all had to do with polls. Wilders is a one man party and a a one trick pony. If he would leave, his party would dissolve. And his sole ‘message’ is that Islam is bad and should vanish from first Holland and then Europe. He doesn’t really have any other political program points. Ok, there’s Brussels. Doesn’t like that either.

Perhaps that’s why he largely shunned the pre-election debates. Problem with that is, these things attract a lot of TV viewers, crucial free air-time. All in all, since he’s his own worst enemy in many respects, it’s not that much of a surprise that Wilders’ support collapsed, and that’s just if we were to take Dutch pollsters more serious than their counterparts in the US and UK.

Talking of which, according to Rutte, those are the countries where ‘the wrong kind of populism’ has won and delivered Trump and Brexit. And of course there are lots of people who agree with that. What either they, or Rutte himself, would label ‘the right kind of populism’ is unclear. Maybe Rutte himself is the right kind of populist?

 

The row with Turkey over the weekend must have helped Rutte quite a bit. Not only were his actions in the row met with approval by a large majority of the Dutch population, including just about all other party leaders, the Dutch also got to think about what WIlders would do in such a situation. And there can be no doubt that Rutte is seen as much more of a statesman than Wilders.

Not that the row is over. After Turkey announced yesterday it would return 40 Dutch cows (?!) , today Turkish Foreign Minister Cavusoglu said Europe’s politicians are “taking Europe toward an abyss”, and: “Soon religious wars will break out in Europe. That’s the way it’s going.” There can be no doubt that a shouting war like this with Wilders as one of the participants would take on a whole different shape, and a different choice of words.

What Rutte’s going to do next is form a new coalition, this time not with the left but with the center-right, and no-one will be able to tell the difference. If Dutch, and European, and global, politics have one main problem, it’s that. Left is right and right is left and winners are losers. If a guy like Dijsselbloem can squeeze Greek society dry in his capacity as Eurogroup head, while he runs as a leftist candidate in his own country, and loses hugely, anything goes.

 

All those who think they can see in the Dutch experience, a sign that Marine Le Pen’s chances in France’s presidential elections in April and May have dropped a lot, would appear to be delusional. Judging from reactions in the financial markets, many seem to be. But Le Pen is much less of a fringe figure than Wilders is, and she certainly wouldn’t shun a debate. It’s true that her Front National is a one-woman operation, bit she has a much clearer political program than Wilders does.

And she doesn’t have an opponent like Rutte, who’s become a formidable presence domestically, as anyone would be who can be PM for many years and not be put out by the curb. The man who should be Le Pen’s main adversary is not; Hollande is out by that curb and doesn’t even dare run again. His Socialist party has become a joke. The next strongest opponent should be François Fillon, but he’s all but gone now he’s been placed under formal investigation.

That leaves only Emmanual Macron, an independent without a party and without a program. In France, you can be elected president in such a situation, but your hand are tied in all sorts of ways, because you need parliament to vote for things.

..the nuances of the French political system put Macron in a spot of bother. The president derives their power from the support of a majority in the lower house of parliament, the National Assembly. Macron was a minister for the Socialist Party government but quit in 2016 to form his own political movement. Now he doesn’t even have a party, let alone a majority. Although the constitution of the French Fifth Republic, created by Charles De Gaulle in 1958, extended presidential powers, it did not enable the president to run the country.

There are only a few presidential powers that do not need the prime minister’s authorisation. The president can appoint a prime minister, dissolve the National Assembly, authorise a referendum and become a “temporary dictator” in exceptional circumstances imperilling the nation. They can also appoint three judges to the Constitutional Council and refer any law to this body. While all important tasks, this does not, by any stretch of the imagination, amount to running a country. The president can’t suggest laws, pass them through parliament and then implement them without the prime minister.

The role of a president is best defined as a “referee”. Presidential powers give the ability to oversee operations and act when the smooth running of institutions is impeded. So a president is able to step in if a grave situation arises or to unlock a standoff between the prime minister and parliament, such as by announcing a referendum on a disputed issue or by dismissing the National Assembly.

So, why does everyone see the president as the key figure? In a nutshell, it’s because the constitution has never been truly applied. There lies the devilish beauty of French politics. A country known since the 1789 revolution for its inability to foster strong majorities in parliament has succeeded, from 1962, in providing solid majorities.

Perhaps those who believe that what happened in Holland is also likely to happen in France are swayed by the notion that both are part of the EU. But they are very different countries and cultures, and different political systems. And Le Pen is no Wilders. She doesn’t say crazy things anymore, she’s cleansed the public image of her party by getting rid of her father, and she keeps any remaining extremists out of view.

There is still plenty suspicion in France about her, and about her party, but there are also a lot of people who agree with a lot of what she says. The perhaps most noteworthy statement she’s made recently is that she would step down if she loses the referendum about membership of the EU she intends to launch if elected president. That should keep Brussels on their toes. Marine means what she says. And a lot of French people may get to like her for that. In a political landscape in which the competition keeps shooting itself in the foot.

Another thing about Le Pen is that her political program contains quite a few bits and bolts that could be labeled leftist; a 35-hour work week, retirement at 60, lower energy prices. It’s just that she wants to reserve these things for the French. Foreigners, especially, Muslims, are not invited. And she is very much opposed to neo-liberalism and globalization:

They’ve made an ideology out of it. An economic globalism which rejects all limits, all regulation of globalization, and which consequently weakens the immune defences of the nation state, dispossessing it of its constituent elements: borders, national currency, the authority of its laws and management of the economy, thus enabling another globalism to be born and to grow: Islamist fundamentalism..

Le Pen’s popularity does not come from an overwhelming innate racism in France -though such a thing certainly exists-. It comes instead from the formidable failure that the country’s immigration policy has been for many decades. At the outskirts of major cities ghetto’s have been allowed to form in which those that come from former French colonies, especially in Africa, feel trapped with no way out. The French tend to feel superior to all other people, and the political system has let the situation slip completely out of hand.

Now France, and Europe is general, will have to deal with this mess. So far, the main European reaction is to turn Greece into a prison camp for a new wave of refugees and migrants. That can of course only make things worse. And it doesn’t solve any of the existing problems. Which makes the rise of Marine Le Pen inevitable.

And Wilders too; he’s the no. 2 party in Holland, because his party won 33% more seats than in 2012 to go from 15 to 20. That 33% gain, versus Rutte’s 20% loss, makes Wilders a loser in the eyes of many ‘relieved’ observers.

Winners are losers, and as is evident in Le Pen’s social policies for the French, in European coalition governments that contain Labor and right wing parties, and in the course of the Democratic party in the US, left is definitely the same as right.

Orwell always wins. Next problem: the actual left are not represented by anyone anymore.

 

 

Oct 252016
 
 October 25, 2016  Posted by at 9:26 am Finance Tagged with: , , , , , , , , , ,  Comments Off on Debt Rattle October 25 2016


NPC Grief monument, Rock Creek cemetery, Washington DC 1915

The Eurozone Is Turning Into A Poverty Machine (Tel.)
Barclays Warns ‘Politics of Rage’ Will Slow Global Growth (BBG)
China Capital Outflows Highest Since Data Publishing Began In 2010 (BBG)
Credit Card Lending To US Subprime Borrowers Is Starting To Backfire (WSJ)
Bank of England Optimism Evaporates in Long-Term Debt (BBG)
The Deficit Is Too Small, Not Too Big (McCulley)
Welcome to the George Orwell Theme Park of Democracy (Jim Kunstler)
How Democrats Killed Their Populist Soul (Matt Stoller)
Hillary Clinton Is The Republican Party’s Last, Best Hope (Heat St.)
Clinton Ally Aided Campaign of FBI Official’s Wife (WSJ)
M5S Blasts Italian Constitutional Reform Proposed By PM Renzi (Amsa)
100 Million Canadians By 2100? Key Advisers Back Ambitious Goal (CP)
A 1912 News Article Ominously Forecasted Climate Change (Q.)
Refugee Camp On Lesbos Damaged In Riots As Rumors Fly (Kath.)
Ex-US Ambassador To Ukraine Geoffrey Pyatt Now Ambassador To Greece (Kath.)

 

 

Why does this truth have to come from the right wing press?

The Eurozone Is Turning Into A Poverty Machine (Tel.)

There are constant bank runs. The bond markets panic, and governments along its southern perimeter need bail-outs every few years. Unemployment has sky-rocketed and growth remains sluggish, no matter how many hundreds of billions of printed money the ECB throws at the economy. We are all tediously aware of how the euro-zone has been a financial disaster. But it is now starting to become clear that it is a social disaster as well. What often gets lost in the discussion of growth rates, bail-outs and banking harmonisation is that the eurozone is turning into a poverty machine. As its economy stagnates, millions of people are falling into genuine hardship. Whether it is measured on a relative or absolute basis, rates of poverty have soared across Europe, with the worst results found in the area covered by the single currency.

There could not be a more shocking indictment of the currency’s failure, or a more potent reminder that living standards will only improve once the euro is either radically reformed or taken apart. Eurostat, the statistical agency of the European Union, has published its latest findings on the numbers of people “at risk of poverty or social exclusion”, comparing 2008 and 2015. Across the 28 members, five countries saw really significant rises compared with the year of the financial crash. In Greece, 35.7pc of people now fall into that category, compared with 28.1pc back in 2008, a rise of 7.6 percentage points. Cyprus was up by 5.6 points, with 28.7pc of people now categorised as poor. Spain was up 4.8 points, Italy up 3.2 points and even Luxembourg, hardly known for being at risk of deprivation, up three points at 18.5pc.

It was not so bleak everywhere. In Poland, the poverty rate went down from 30.5pc to over 23pc. In Romania, Bulgaria, and Latvia, there were large falls compared to the 2008 figures – in Romania for example the percentage was down by seven points to 37pc. What was the difference between the countries where poverty went up dramatically, and those where it went down? You guessed it. The largest increases were all countries within the single currency. But the decreases were all in countries outside it. It gets worse. “At risk of poverty” is defined as living on less than 60pc of the national median income. But that median income has itself fallen over the last seven years, because most countries inside the eurozone have yet to recover from the crash. In Greece, the median income has dropped from €10,800 a year to €7,500 now.

[..] Why should Greece and Spain be doing so much worse than anywhere in Eastern Europe? Or why Italy should be doing so much worse than Britain, when the two countries were at broadly similar levels of wealth in the Nineties? (Indeed, the Italians actually overtook us for a while in GDP per capita.) Even a traditionally very successful economy such as the Netherlands, which has not been caught up in any kind of financial crisis, has seen big increases in both relative and absolute poverty. In fact, it is not very hard to work out what has happened. First, a dysfunctional currency system has choked off economic growth, driving unemployment up to previously unbelievable levels. After countries went bankrupt and had to be bailed out, the EU, along with the ECB and the IMF, imposed austerity packages that slashed welfare systems and cut pensions. It is not surprising poverty is increasing under those conditions.

Read more …

If you ask me, they’ve got it the wrong way around. If growth hadn’t slowed down, there’d be much less rage.

Barclays Warns ‘Politics of Rage’ Will Slow Global Growth (BBG)

Brexit, rising populism across Europe, the ascent of Donald Trump in America, and the backlash against income inequality everywhere. A slew of political and economic forces have nurtured a growing narrative that globalization is now on life support—a potential game-changer for global financial markets, which have staged a rapid expansion since the end of the Cold War thanks to unfettered cross-border flows. No more: Trade volumes have stalled while the “politics of rage” has taken root in advanced economies, driven by a collapse in the perceived legitimacy of political and economic institutions, a new report from Barclays warns.

The result, the bank says, is an oncoming protectionist lurch—restrictions on the free movement of goods, services, labor, and capital—combined with an erosion of support for supranational bodies, from the EU to the WTO. “Even mild de-globalization likely will slow the pace of trend global growth,” Marvin Barth, head of European FX strategy at Barclays, writes in the report. “A sense of economic and political disenfranchisement due to imperfect representation in national governments and delegation of sovereignty to supranational and intergovernmental organisations” has generated the backlash, he said. He cites as a major factor the collapse in support for centrist parties in advanced economies and adds that the role of income inequality may be overstated.

The report echoes Harvard University economist Dani Rodrik’s earlier contention that democracy, sovereignty, and globalization represent a “trilemma.” Expansion of cross-border trade links—and the attendant increase in the power of supranational authorities to adjudicate economic matters—is a direct threat to representative democracy, and vice-versa. The veto Monday of the EU’s free trade deal with Canada by the Belgian region of Wallonia—whose leader said the deadline to secure backing for the deal was “not compatible with the exercise of democratic rights”—is a sharp illustration of this trilemma.

Read more …

Breaking the dollar peg is a dangerous game, given the amount of debt denominated in USD. It can get expensive quite fast.

China Capital Outflows Highest Since Data Publishing Began In 2010 (BBG)

The offshore yuan traded near a record low as Chinese policy makers signaled they are willing to allow greater currency flexibility amid a slump in exports and an advance in the dollar. The exchange rate was at 6.7836 a dollar as of 1:01 p.m. in Hong Kong, after dropping to 6.7885, the weakest intraday level in data going back to 2010. In Shanghai, the currency was little changed at 6.7760, close to a six-year low and past the 6.75 year-end median forecast in a Bloomberg survey. The Chinese currency has come under increased pressure on signs that investors are taking more money out of the country. A gauge of the dollar rose to a seven-month high versus major currencies Monday as traders bet that the Federal Reserve may raise borrowing costs soon.

Unlike the yuan selloff earlier this year which sparked a global market rout, there’s no sense of panic yet as policy makers maintain a steady exchange rate against other currencies. “The central bank is tolerating more orderly depreciation of the yuan,” said Gao Qi, a Singapore-based foreign-exchange strategist at Scotiabank. “But it will step in to avoid market panic arising from a sharp yuan depreciation. The 6.8 level is critical in the near term.” [..] The onshore yuan has weakened 4.2% this year, the most in Asia. It has declined in all but two sessions this month as some analysts speculated that the central bank has reduced support following the yuan’s inclusion in the IMF’s basket of reserves on Oct. 1.

A net $44.7 billion worth of payments in the Chinese currency left the nation last month, according to data released by the State Administration of Foreign Exchange. That’s the most since the government started publishing the figures in 2010. [..] Chinese policy makers have downplayed the importance of the yuan-dollar exchange rate, saying they aim to keep the yuan steady against a broad basket of currencies. A Bloomberg gauge mimicking China Foreign Exchange Trade System’s yuan index against 13 major currencies has been little changed around 94 since August after falling more than 6 percent in the previous eight months.

Read more …

Imagine my surprise.

Credit Card Lending To US Subprime Borrowers Is Starting To Backfire (WSJ)

Credit-card lending to subprime borrowers is starting to backfire. Missed payments on credit cards that lenders issued recently are higher than on older cards, according to new data from credit bureau TransUnion. Nearly 3% of outstanding balances on credit cards issued in 2015 were at least 90 days behind on payments six months after they were originated. That compares with 2.2% for cards that were given out in 2014 and 1.5% for cards in 2013. The poorer performance on newer cards pushed up the 90-day or more delinquency rate for all credit cards to 1.53% on average nationwide in the third quarter. That’s the highest level since 2012.

The recent increase in subprime lending is one of the big contributors. Lenders ramped up subprime card lending in 2014 and have been doling out more of these cards recently. They issued just over 20 million credit cards to subprime borrowers in 2015, up some 20% from 2014 and up 56% from 2013, according to Equifax. Separately, missed payments in states with large oil or energy sectors continue to worsen. The share of card balances that were at least 90 days past due increased 12% in Oklahoma, 10% in Texas and 20% in Wyoming in the third quarter from a year prior, according to TransUnion.

Read more …

Really? They thought Carney could save the day?

Bank of England Optimism Evaporates in Long-Term Debt (BBG)

Long-term sterling bonds suggest investors are quickly losing confidence in the Bank of England’s ability to support debt markets through the U.K.’s departure from the EU. Holders have lost about 10% in as little as seven weeks on long-dated notes issued by Vodafone, British American Tobacco and WPP. The bond sales took place after the central bank announced plans in August to buy corporate debt, sparking investor optimism. The mood has since soured because of concerns about a so-called hard Brexit, sterling’s tumble and the outlook for inflation. “With the benefit of hindsight, August was the best time to issue,” said Srikanth Sankaran, head of European Credit and ABS strategy at Morgan Stanley. “The market was more focused on the Bank of England’s support rather than the longer-term Brexit risk.”

Read more …

McCulley used to be something big at PIMCO. He’s right, but it’s doubtful a change of course would be sufficient at this point. Austerity has killed a lot.

The Deficit Is Too Small, Not Too Big (McCulley)

[..] while Clinton gets my vote, her insistence at the final debate that her proposed fiscal program will not “add a penny” to the national debt is fouling my wonk serenity this morning. Every penny of new expenditure, she says, will be “paid for” with a new penny of tax revenue. Her deficit-neutral fiscal proposal is, I readily acknowledge, better than the status quo, as her proposed new spending would add 100 cents on the dollar to the nation’s aggregate demand, while her proposed tax increases would not subtract 100 cents on the dollar. Why? Because she proposes getting the new tax revenue from those with a low marginal propensity to spend, or alternatively, a high marginal propensity to save. To wit, from the not poor, including yes, the rich.

Thus, in simple Keynesian terms, there is some solace in her deficit-neutral fiscal package: It would be net stimulative to the economy, because it would – in technical terms – drive down the private sector’s savings rate. In less technical terms, it would take money from people who don’t live paycheck to paycheck, who would still spend the same, but just have less left over to save. And I have no problem with that. What sends me around the bend is the notion that the only way to boost aggregate demand is to drive down the private-sector savings rate, in the context of holding constant the public sector’s savings rate. But, you retort: The public sector, notably at the federal level, has a negative savings rate; it runs a deficit! Are you nuts?

No, I am not. Unless faced with an incipient inflation threat, born of an overheated economy, there is no reason whatsoever that the public sector should ever have a positive savings rate. What it should have is a positive, a bigly positive, investment rate. And in fact, a higher public investment rate and a lower public savings rate are exactly what our economy presently needs. Yes, a larger fiscal deficit. [..] investment drives aggregate demand, which begets aggregate production and thus, aggregate income, the fountain from which savings flow. Thus, if and when there is insufficient aggregate demand to foster full employment at a just income distribution, the underlying problem is a deficiency of investment, not savings. More investment is the solution, and investment is constrained not by a shortage of savings, but literally a deficiency of investment itself.

Read more …

“..the demonization of Russia – a way more idiotic exercise than the McCarthyite Cold War hysteria..”

Welcome to the George Orwell Theme Park of Democracy (Jim Kunstler)

If Trump loses, I will essay to guess that his followers’ next step will be some kind of violence. For the moment, pathetic as it is, Trump was their last best hope. I’m more comfortable about Hillary — though I won’t vote for her — because it will be salutary for the ruling establishment to unravel with her in charge of it. That way, the right people will be blamed for the mismanagement of our national affairs. This gang of elites needs to be circulated out of power the hard way, under the burden of their own obvious perfidy, with no one else to point their fingers at. Her election will sharpen awareness of the criminal conduct in our financial practices and the neglect of regulation that marked the eight years of Obama’s appointees at the Department of Justice and the SEC.

The “tell” in these late stages of the campaign has been the demonization of Russia – a way more idiotic exercise than the McCarthyite Cold War hysteria of the early 1950s, since there is no longer any ideological conflict between us and all the evidence indicates that the current state of bad relations is America’s fault, in particular our sponsorship of the state failure in Ukraine and our avid deployment of NATO forces in war games on Russia’s border. Hillary has had the full force of the foreign affairs establishment behind her in this war-drum-banging effort, yet they have not been able to produce any evidence, for instance, in their claim that Russia is behind the Wikileaks hack of Hillary’s email.

[..] The media has been on-board with all this. The New York Times especially has acted as the hired amplifier for the establishment lies – such a difference from the same newspaper’s role in the Vietnam War ruckus of yesteryear. Today (Monday) they ran an astounding editorial “explaining” the tactical necessity of Hillary’s dishonesty: “In politics, hypocrisy and doublespeak are tools,” The Times editorial board wrote. Oh, well, that’s reassuring. Welcome to the George Orwell Theme Park of Democracy.

Read more …

Absolute must read by Stoller, American history you didn’t know.

How Democrats Killed Their Populist Soul (Matt Stoller)

While not a household name today, Wright Patman was a legend in his time. His congressional career spanned 46 years, from 1929 to 1976. In that near-half-century of service, Patman would wage constant war against monopoly power. As a young man, at the height of the Depression, he challenged Herbert Hoover’s refusal to grant impoverished veterans’ accelerated war pensions. He successfully drove the immensely wealthy Treasury Secretary Andrew Mellon from office over the issue. Patman’s legislation to help veterans recoup their bonuses, the Bonus Bill—and the fight with Mellon over it—prompted a massive protest by World War I veterans in Washington, D.C., known as “the Bonus Army,” which helped shape the politics of the Depression.

In 1936, he authored the Robinson-Patman Act, a pricing and antitrust law that prohibited price discrimination and manipulation, and that finally constrained the A&P chain store—the Walmart of its day—from gobbling up the retail industry. He would go on to write the Bank Secrecy Act, which stops money-laundering; defend Glass-Steagall, which separates banks from securities dealers; write the Employment Act of 1946, which created the Council of Economic Advisors; and initiate the first investigation into the Nixon administration over Watergate.

Far from the longwinded octogenarian the Watergate Babies saw, Patman’s career reads as downright passionate, often marked by a vitality you might see today in an Elizabeth Warren—as when, for example, he asked Fed Chairman Arthur Burns, “Can you give me any reason why you should not be in the penitentiary?” Despite his lack of education, Patman had a savvy political and legal mind. In the late 1930s, the Federal Reserve Board refused to admit it was a government institution. So Patman convinced the District of Columbia’s government to threaten foreclosure of all Federal Reserve Board property; the Board quickly produced evidence that it was indeed part of the federal government.

Read more …

Kind of like a second chapter to Stoller’s piece above.

Hillary Clinton Is The Republican Party’s Last, Best Hope (Heat St.)

While Trump has pushed a populist, anti-free trade message, Hillary champions the large multinational corporations that create jobs for everyday Americans. As secretary of state, she worked tirelessly to advance the Trans-Pacific Partnership, the “gold standard” of trade agreements. As a candidate, she expertly silenced the gullible radicals supporting Bernie Sanders by pretending she won’t sign TPP into law as president. (She will.) Hillary’s disdain for left-wing agitators does not end there. She has also gone to bat for the heroes in America’s fracking industry, telling environmentalists to “get a life” in emails uncovered by Wikileaks. [..]

One of the greatest sources of frustration for Republicans during the Obama presidency has been his weak-sauce, isolationist foreign policy. In the absence of strong American leadership, the world has plunged into chaos. Trump shares Obama’s ideology of avoiding foreign entanglements, even going so far as to question the need for NATO as Putin runs amok unchecked. It is precisely at this moment that America needs the hawkish leadership of Hillary Clinton to defend American exceptionalism and reassert our hegemony on the world stage. Among her fellow neoconservative war hawks, Hillary is admired for her sterling record on foreign policy — from supporting the invasion of Iraq in 2002 to her valiant efforts as secretary of state to persuade Obama to stop being such a pushover on the world stage.

During the Arab Spring in 2011, Hillary impressed upon Obama the need for a U.S.-led “coalition of the willing” to help mold the future of the Middle East in the name of freedom. Muammar Gaddafi wound up dead in a ditch. Later, when the president sought input on Syria, Hillary recommended force and arming rebel groups. Obama’s failure to follow her advice led to the current migrant crisis and ongoing tragedy in Syria. Bashar al-Assad is still alive and well. Imagine our enemies cowering in the shade as President Hillary’s massive drone armada blocks out the sun en route to visit death upon the enemies of freedom. Slay Queen, indeed. Voters looking for a reliable pro-business, conservative hawk to undo eight years of Obama’s feckless progressivism and combat the cancer of Trumpism need look no further than Hillary Rodham Clinton. She is the GOP’s last, best hope.

Read more …

Incredible. Just incredible.

Clinton Ally Aided Campaign of FBI Official’s Wife (WSJ)

The political organization of Virginia Gov. Terry McAuliffe, an influential Democrat with longstanding ties to Bill and Hillary Clinton, gave nearly $500,000 to the election campaign of the wife of an official at the FBI who later helped oversee the investigation into Mrs. Clinton’s email use. Campaign finance records show Mr. McAuliffe’s political-action committee donated $467,500 to the 2015 state Senate campaign of Dr. Jill McCabe, who is married to Andrew McCabe, now the deputy director of the FBI. The Virginia Democratic Party, over which Mr. McAuliffe exerts considerable control, donated an additional $207,788 worth of support to Dr. McCabe’s campaign in the form of mailers, according to the records.

That adds up to slightly more than $675,000 to her candidacy from entities either directly under Mr. McAuliffe’s control or strongly influenced by him. The figure represents more than a third of all the campaign funds Dr. McCabe raised in the effort. Mr. McAuliffe and other state party leaders recruited Dr. McCabe to run, according to party officials. She lost the election to incumbent Republican Dick Black. [..] Dr. McCabe announced her candidacy in March 2015, the same month it was revealed that Mrs. Clinton had used a private server as secretary of state to send and receive government emails, a disclosure that prompted the FBI investigation. At the time the investigation was launched in July 2015, Mr. McCabe was running the FBI’s Washington, D.C., field office, which provided personnel and resources to the Clinton email probe.

That investigation examined whether Mrs. Clinton’s use of private email may have compromised national security by transmitting classified information in an insecure system. [..] At the end of July 2015, Mr. McCabe was promoted to FBI headquarters and assumed the No. 3 position at the agency. In February 2016, he became FBI Director James Comey’s second-in-command. As deputy director, Mr. McCabe was part of the executive leadership team overseeing the Clinton email investigation, though FBI officials say any final decisions on that probe were made by Mr. Comey, who served as a high-ranking Justice Department official in the administration of George W. Bush.

Read more …

“Di Maio was also ironic about the endorsement of the reform received by Renzi from President Obama during a recent visit to Washington. “Let’s say it is not the first time Obama has intervened concerning a referendum in another country, he supported ‘Remain’ in England and ‘Brexit’ won. Now he is backing the Yes vote and so the No front should be reassured..”

M5S Blasts Italian Constitutional Reform Proposed By PM Renzi (Amsa)

The anti-establishment Five Star Movement (M5S) will vote No in the December 4 referendum on Constitutional reform because the law “deprives us of democratic rights”, party bigwig and Deputy House Speaker Luigi Di Maio said on Monday. “In our opinion, the title of the law does not in any way reflect its content, in the same way that the title of the Good School law does not in any way reflect the content of that reform,” Di Maio told radio broadcaster Rtl 102.5. The M5S recently lost a legal challenge against the question in the consultative referendum, which echoes the wording of the title of the constitutional law, arguing it amounts to a “deceptive” advertisement for the government’s position in favour of a Yes vote.

On December 4, Italians will be called to answer ‘yes’ or ‘no’ on a question that reads: “Do you approve a constitutional law that concerns the scrapping of the bicameral system (of parliament), reducing the number of MPs, limiting the operating costs of public institutions, abolishing the National Council on Economy and Labour (CNEL), and amending Title V of the Constitution, Part II?”. The reform approved by parliament in April would turn the Senate into a leaner body of indirectly elected regional and local representatives with limited lawmaking powers. Critics of the reform, including M5S and a left-wing faction within Premier Matteo Renzi’s own Democratic Party (PD), say it will actually make procedures more complicated.

Di Maio was also ironic about the endorsement of the reform received by Renzi from US President Barack Obama during a recent visit to Washington. “Let’s say it is not the first time Obama has intervened concerning a referendum in another country, he supported ‘Remain’ in England and ‘Brexit’ won. Now he is backing the Yes vote and so the No front should be reassured,” he said.

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There is a reason why Canada is sparsely populated. Let’s not tell them. Don’t spoil the fun.

100 Million Canadians By 2100? Key Advisers Back Ambitious Goal (CP)

Imagine Canada with a population of 100 million — roughly triple its current size. For two of the most prominent voices inside the Trudeau government’s influential council of economic advisers, it’s much more than a passing fancy. It’s a target. The 14-member council was assembled by Finance Minister Bill Morneau to provide “bold” advice on how best to guide Canada’s struggling economy out of its slow-growth rut. One of their first recommendations, released last week, called for a gradual increase in permanent immigration to 450,000 people a year by 2021 — with a focus on top business talent and international students. That would be a 50% hike from the current level of about 300,000.

The council members — along with many others, including Economic Development Minister Navdeep Bains — argue that opening Canada’s doors to more newcomers is a crucial ingredient for expanding growth in the future. They say it’s particularly important as more and more of the country’s baby boomers enter their golden years, which eats away at the workforce. The conviction to bring in more immigrants is especially significant for at least two of the people around the advisory team’s table. Growth council chair Dominic Barton, the powerful global managing director of consulting firm McKinsey, and Mark Wiseman, a senior managing director for investment management giant BlackRock, are among the founders of a group dedicated to seeing the country responsibly expand its population as a way to help drive its economic potential.

The Century Initiative, a five-year-old effort by well-known Canadians, is focused on seeing the country of 36 million grow to 100 million by 2100. Without significant policy changes on immigration, the current demographic trajectory has Canada’s population on track to reach 53 million people by the end of the century, the group says on its website. That would place it outside the top 45 nations in population size, it says.

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It goes back quite a bit further.

A 1912 News Article Ominously Forecasted Climate Change (Q.)


Published Aug. 14, 1912. (The Rodney and Otamatea Times and Waitemata and Kaipara Gazette)

A short news clip from a New Zealand paper published in 1912 has gone viral as an example of an early news story to make the connection between burning fossil fuels and climate change. It wasn’t, however, the first article to suggest that our love for coal was wreaking destruction on our environment that would lead to climate change. The theory—now widely accepted as scientific reality—was mentioned in the news media as early as 1883, and was discussed in scientific circles much earlier than that. The French physicist Joseph Fourier had made the observation in 1824 that the composition of the atmosphere is likely to affect the climate. But Svante Arrhenius’s 1896 study titled, “On the influence of carbonic acid in the air upon the temperature on the ground” was the first to quantify how carbon dioxide (or anhydrous carbonic acid, by another name) affects global temperature.

Though the study does not explicitly say that the burning of fossil fuels would cause global warming, there were scientists before him who had made such a forecast. The earliest such mention that Quartz could find was in the journal Nature in December of 1882. The author HA Phillips writes: “According to Prof Tyndall’s research, hydrogen, marsh gas, and ethylene have the property to a very high degree of absorbing and radiating heat, and so much that a very small proportion, of say one thousandth part, had very great effect. From this we may conclude that the increasing pollution of the atmosphere will have a marked influence on the climate of the world.” Phillips was relying on the work of John Tyndall, who in the 1860s had shown how various gases in the atmosphere absorb heat from the sun in the form of infrared radiation.

Now we know that Phillips was wrong about a few scientific details: He ignored carbon dioxide from burning coal and focused more on the by-products of mining. Still, he was drawing the right conclusion about what our demand for fossil fuels might do to the climate. Newspapers around the world took those words published in a prestigious scientific journal quite seriously. In January 1883, the New York Times published a lengthy article based on Phillips’ letter to Nature, which said: “The writer who has partially discussed the subject in the columns of Nature has fixed upon 1900 as the date when the earth’s atmosphere will become entirely irrespirable. This is probably a misprint, for unless the consumption of cigarettes increases unlooked-for rapidly the atmosphere ought to remain respirable until 1910, or even 1912. At the latter date all mankind will have perished, and nothing except the hardier plants will be living on the surface of the earth.”

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The EU is a failure of historical proportions economically, politically and above all morally.

Refugee Camp On Lesbos Damaged In Riots As Rumors Fly (Kath.)

Migrants on Monday attacked the premises of the European Asylum Support Office (EASO) inside the Moria hot spot on the eastern Aegean island of Lesvos, completely destroying four container office units and damaging another two during a protest that was contained by riot police. Officials said the protesters, most of them men from Pakistan, threw rocks and burning blankets at the EASO facilities, allegedly frustrated at delays in processing their asylum applications. Riot police were called in to contain the riot. The blaze was put out by the fire service before it could cause further damage. There were no reports of injuries.

The violence at Moria prompted authorities on other migrant-hosting islands, including Chios, Samos, Kos and Leros, to beef up their security measures. Speaking on condition of anonymity, a local government official told Kathimerini that migrant riots were often triggered by rumors. “Refugees and migrants are told that if their facilities are destroyed they will have nowhere to stay and so they will be transferred to the mainland,” the source said.

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Victoria Nuland’s neocon and Kiev coup instigator buddy. Bad news for Greece. Wonder what the pressure on Tsipras has been.

Ex-US Ambassador To Ukraine Geoffrey Pyatt Now Ambassador To Greece (Kath.)

The official welcome ceremony for new US Ambassador to Greece Geoffrey R. Pyatt took place on the US 6th Fleet command and control ship USS Mount Whitney, in the port of Piraeus south of Athens, Monday. Earlier in the day, Pyatt presented Greek President Prokopis Pavlopoulos with his diplomatic credentials at the Presidential Mansion. The ceremony was attended by Foreign Minister Nikos Kotzias. Nominated by President Obama, Pyatt is widely regarded as an experienced diplomat. He previously served as US ambassador in Kiev and had to deal with the fallout of the Ukrainian crisis. His appointment comes at a key time for both Athens and Washington. Recent developments in the wider region have created challenges as well as opportunities for the two NATO allies. Obama is expected to visit Athens in November. Political and military officials have been exchanging visits ahead of the trip.

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