Sep 022018
 
 September 2, 2018  Posted by at 9:16 am Finance Tagged with: , , , , , , , , , ,  


Salvador Dali Portrait of Picasso 1947

 

Is The US Economic Boom Beginning To Fizzle Out? (Coppola)
Former Eurogroup Head Dijsselbloem Says Demands On Greeks Were Too Heavy (R.)
The IMF Abetted The European Union’s Subversion Of Greek Democracy (Mody)
Ethiopia Debt Woes Curtail China Funding (R.)
May Vows No Compromise With EU On Brexit Plan (BBC)
Pentagon Cancels Aid To Pakistan Over Record On Militants (R.)
Monsanto-Bayer: Eliminating The Name Will Not Erase The Criminal History (CD)
What’s Happening To Our Weather? The Answers Are Hiding In Arctic Air (G.)

 

 

Bit short today. I think because all the focus is one two funerals I don’t care much about. In one, a bishop grabs boobs, in the other the one person not invited gets all the attention.

Is that a surprise?

Is The US Economic Boom Beginning To Fizzle Out? (Coppola)

President Trump is not going to be too happy with the New York Fed’s latest nowcast for Q3 2018. The staff projection, based upon the latest data, shows annualized quarter-on-quarter GDP growth slowing to 2% per annum. At the end of 2017 it was 4%, and even at the end of Q2 it was 3%.

The Atlanta Fed’s nowcast, which calculates GDP growth in the same way as the U.S. Bureau of Economic Analysis, also shows GDP growth slowing in Q3, though from a higher level. The Atlanta Fed’s growth estimate for Q3 is 4.1%. President Trump will no doubt be happy with this, but not so happy with the fact that at the beginning of August the estimate was 5%.

So what has gone wrong? Why are the nowcasts suggesting that U.S. economic growth is beginning to slow? The indicators that go into the NY Fed’s nowcasts have been gradually turning red for some time now. There appears to be something of a downturn going on in the housing market; both new starts and sales have fallen. Exports have fallen and imports have risen, apparently because of worsening terms of trade, most likely due to the strong dollar. Most recently, manufacturers have drawn down inventories, and there is a fall in orders and shipments for durable goods. There are no dramatic drops, but it all adds up to a gradual economic slowdown.

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How long have you realized this, Jeroen, and what have you done to repair it?

Former Eurogroup Head Dijsselbloem Says Demands On Greeks Were Too Heavy (R.)

Euro zone countries have asked for too much from the Greek people in return for international bailout loans, former Eurogroup chief Jeroen Dijsselbloem said in an interview on Dutch television on Saturday. “On reforms, we have asked a lot from the Greek people, too much,” Dijsselbloem told current affairs program Nieuwsuur. “Reforms are hard enough to accomplish in a society with a well-functioning government, but this was obviously not the case in Greece.” Greece emerged from the biggest bailout in economic history on Aug. 20, after receiving 288 billion euros in financial aid since 2010, with the European Union as its biggest lender.

During the crisis, the Greek economy shrank by a quarter, pushing a third of the population into poverty and driving thousands to move abroad. “Greece is obviously not a success story,” Dijsselbloem said. “Their crisis has been so deep, that you can’t call it a success.” Dijsselbloem chaired the Eurogroup of euro zone finance ministers from 2013 until the beginning of 2018, and led dozens of lengthy emergency meetings during which bailouts for Greece, Cyprus and the Spanish banking sector were grudgingly pieced together.

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Sister act.

The IMF Abetted The European Union’s Subversion Of Greek Democracy (Mody)

European authorities never allowed a conversation around the core imperative of reducing Greece’s debt burden. Syriza formed a government on January 25, 2015. On January 31, Erkki Liikanen, governor of Finland’s central bank and, in that capacity, a member of the ECB’s Governing Council, threatened that the ECB would stop funding Greek banks if the Greek government did not agree to the terms of the creditors. And on February 4, the ECB decided Greece’s fate. In an aggressive move that took everyone by surprise, the ECB cut off funding to Greek banks, preemptively immobilizing the Greek government before it could begin negotiations with its creditors.

The ECB withdrew an earlier arrangement under which Greek banks used their government bonds as collateral (security) to obtain funds for running their day-to-day operations. Although Greek government bonds had a junk rating and normally only higher-rated bonds qualified as collateral, the ECB had waived that requirement to help the banks stay afloat. With its February 4 decision, the ECB revoked that waiver. Greek banks could now borrow only from the Greek central bank under an Emergency Liquidity Arrangement (ELA); ELA funds carried a higher interest rate and, moreover, could be turned off at any time, thus choking the Greek financial system.

Stock prices of Greek banks fell sharply, and two days later, the rating agency S&P pushed the government bonds’ rating further into junk territory. With continuing deposit flight from Greek banks and the threat of a financial meltdown, the Syriza government rapidly lost all leverage before it could use its economic argument in a political negotiation.

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More Belt and Road.

Ethiopia Debt Woes Curtail China Funding (R.)

Ethiopia has been lauded by experts from China’s ruling Communist Party as a “model country” in Beijing’s $126 billion Belt and Road initiative to build rail, road and sea links tying China to Eurasia and Africa. But as the Horn of Africa nation of 100 million people faces debt distress, there are signs that China, a major creditor, is slowing financing to Ethiopia as doubts grow over the profitability of some infrastructure projects there. “The intensifying repayment risks from the Ethiopian government’s debt reaching 59 percent of GDP is worrying investors,” China’s mission to the African Union in Addis Ababa said on its website in July.

It said that Chinese investment in the country was cooling and that the China Export and Credit Insurance Corp was reducing the scale of its investment there. Against a backdrop of rising worry over African indebtedness to China, Prime Minister Abiy Ahmed will visit Beijing for the Forum on China-Africa Cooperation (FOCAC), which starts on Monday. He is due to meet Chinese Prime Minister Li Keqiang and is expected to court investment from Chinese firms into Ethiopia’s agro-industrial and pharmaceutical businesses, China’s Xinhua news agency said. Ethiopia has been a top destination for Chinese loans in Africa, despite its lack of natural resources, with state policy banks extending it more than $12.1 billion since 2000, according to the China Africa Research Initiative (CARI) at the Johns Hopkins School of Advanced International Studies in Washington (SAIS).

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Not your call, Theresa.

May Vows No Compromise With EU On Brexit Plan (BBC)

Theresa May has insisted she will not be forced into watering down her Brexit plan during negotiations with the EU. Writing in the Sunday Telegraph, the prime minister says she will “not be pushed” into compromises on her Chequers agreement that are not in the “national interest”. But Mrs May also warns she will not “give in” to those calling for a second referendum on the withdrawal agreement. She says it would be a “gross betrayal of our democracy and… trust”. The People’s Vote, a cross-party group including some MPs, is calling for a public vote on the final Brexit deal. The UK is on course to leave the EU on 29 March and the government had previously ruled out another referendum.

The prime minister writes that the coming months are “critical in shaping the future of our country”, but that she is “clear” about her mission in fulfilling “the democratic decision of the British people”. She adds that following the Chequers agreement in July – which led to the resignation of two cabinet ministers – “real progress” has been made in Brexit negotiations. While there is more negotiating to be done, Mrs May writes: “We want to leave with a good deal and we are confident we can reach one.” The government has been preparing for a no-deal scenario, even though this would create “real challenges for both the UK and the EU” in some sectors, she says. But the PM adds: “We would get through it and go on to thrive.”

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Just as they’ve voted in Imran Khan, who once suggested he might order the shooting down of U.S. drones if they entered Pakistani airspace, [and] has opposed the United States’ open-ended presence in Afghanistan.

Pentagon Cancels Aid To Pakistan Over Record On Militants (R.)

The U.S. military said it has made a final decision to cancel $300 million in aid to Pakistan that had been suspended over Islamabad’s perceived failure to take decisive action against militants, in a new blow to deteriorating ties. The so-called Coalition Support Funds were part of a broader suspension in aid to Pakistan announced by President Donald Trump at the start of the year, when he accused Pakistan of rewarding past assistance with “nothing but lies & deceit.” The Trump administration says Islamabad is granting safe haven to insurgents who are waging a 17-year-old war in neighboring Afghanistan, a charge Pakistan denies. But U.S. officials had held out the possibility that Pakistan could win back that support if it changed its behavior.

U.S. Defense Secretary Jim Mattis, in particular, had an opportunity to authorize $300 million in CSF funds through this summer – if he saw concrete Pakistani actions to go after insurgents. Mattis chose not to, a U.S. official told Reuters. “Due to a lack of Pakistani decisive actions in support of the South Asia Strategy the remaining $300 (million) was reprogrammed,” Pentagon spokesman Lieutenant Colonel Kone Faulkner said. Faulkner said the Pentagon aimed to spend the $300 million on “other urgent priorities” if approved by Congress. He said another $500 million in CSF was stripped by Congress from Pakistan earlier this year, to bring the total withheld to $800 million. The disclosure came ahead of an expected visit by U.S. Secretary of State Mike Pompeo and the top U.S. military officer, General Joseph Dunford, to Islamabad. Mattis told reporters on Tuesday that combating militants would be a “primary part of the discussion.”

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8,000 lawsuits. And Bayer is not a US company, big difference.

Monsanto-Bayer: Eliminating The Name Will Not Erase The Criminal History (CD)

Cancelling out Monsanto’s name and keeping only that of Bayer, does not mean forgetting the wrongdoings of a company which, according to the verdict of the Monsanto Tribunal of The Hague, is stained with crimes of ecocide. With Bayer’s official takeover of Monsanto, the giant multinational also inherits its liabilities. On the eve of the start of the integration process, Monsanto has been held liable for causing cancer through the use of its glyphosate-based weedkiller Roundup and ordered to pay $289 million of damages to the plaintiff Dewayne Lee Johnson in the first landmark case, settled in California in mid August 2018. The jury also found that Monsanto “acted with malice or oppression.”

According to Reuters, the number of lawsuits brought against Bayer’s newly acquired Monsanto is approximately 8000 in the US alone. UN experts Ms Hilal Elver, Special Rapporteur on the right to food and Mr. Dainius Puras, Special Rapporteur on the right to physical and mental health, defined the ruling “a significant recognition of the human rights of victims, and the responsibilities of chemical companies.” Revelations in reports published last year, most notably the “Monsanto Papers” and the “Poison Papers“, have shed light on strategies of big agrochemical groups to expand their empires: from lobbying, interference in government agencies’ proceedings, attacks in collusion with institutions on independent science, to mega mergers and acquisitions.

For the first time part of these documents were shown to a jury, which were able, among other things to also see that, “at least starting 20 years ago, Monsanto has known that their product can cause cancer, and has gone out of its way to ignore it and/or fight any science that suggests a link”, as declared to Democracy Now by Brent Wisner, the lead trial counsel for Dewayne Lee Johnson in his lawsuit against Monsanto. Added to this, in the same week, California’s Supreme Court rejected a challenge by Monsanto to the state’s decision to include glyphosate in its Proposition 65 list of carcinogens.

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How clean is the air?

What’s Happening To Our Weather? The Answers Are Hiding In Arctic Air (G.)

I am standing on the ocean. Ahead of me, the world is split into two perfect halves: blue sky above, white sea ice below. The view is clean and simple, but a continuous waltz of swirling and shunting is hidden inside those two colours: the inner workings of the Arctic engine. This place is special for many reasons, and to appreciate one of the most unusual all I need to do is to live; to breathe. The air is -2C, but the air coming from my lungs is invisible. The familiar wisps of cold breath that I associate with crisp winter air in Britain are absent. They cannot form here. And that anomaly is connected in a fundamental way to our presence here, on a scientific expedition to study this environment. For two months, the Swedish icebreaker Oden is home to 74 of us, living and working at the top of the world to tap into the stories that the blue and the white have to tell.

The Arctic has held on to its mystique for centuries. Many western explorers have pitted their wits, strength, and endurance against this environment, while traditional Arctic communities have learned to work with the complexities of the ice rather than against them. Those of us who live well south of the Arctic circle hear a lot about how the white in the north is changing, but less about how it is. It’s hard to construct a secondhand mental image of what it’s like here. There are no landmarks and you cannot step in the footprints of the past. This is an ocean with an icy shell that cracks and shifts as it’s pushed by the wind, breaking apart into separate floes or piling up to form ridges.

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Aug 102018
 
 August 10, 2018  Posted by at 8:05 am Finance Tagged with: , , , , , , , , , , ,  


John French Sloan Sunset, West Twenty-Third Street 1905-6

 

The Myth Of Market Cap (Berversdorf)
The Looming Threat of a Yuan Depreciation (Magnus)
Russia Blasts New US Sanctions As ‘Theatre Of The Absurd’ (G.)
US Curbs On Russian Banks Would Be Act Of Economic War – Medvedev (R.)
US Must Turn to Russia to Contain China (Rickards)
Pakistan Is On The Brink Of Economic Disaster (CNBC)
Tesla Board Plans To Tell Elon Musk To Recuse Himself (CNBC)
US, EU Laying Groundwork For New Trade Deal (CNBC)
US Judge Orders Deportation Plane Turnaround (BBC)
Germany Inks Deal With Spain To Return Registered Migrants (AFP)
New Zealand To Ban Single-Use Plastic Bags (AFP)

 

 

Apple does record buybacks. Amazon invests in becoming a better company.

Hadn’t heard from Thad Beversdorf for quite a while. Good to see you, my friend!

The Myth Of Market Cap (Berversdorf)

Why do CEO’s distribute cash to secondary market speculators? These speculators haven’t provided any capital to the balance sheet and haven’t added to the income statement or cash flow statement of the companies they are speculating on. So why do CEO’s spend so much effort and capital appeasing them? Market cap is the benchmark by which a company distributes cash (i.e. div yield). But market cap, as determined in the secondary markets, is a theoretical asset that doesn’t generate revenue, profit or cash flow for the firm. Meaning cash payments are tied to an ‘asset’ that has no relevance to a firm’s operations. Paying dividends against an non-producing asset i.e. market cap that generates no return for the company is incredibly destructive.

There becomes a dangerous disconnect between the return on capital the company raised/invested and the cash distribution. In this sense, market cap is a massive hindrance to the firm’s capacity for productive investment as capital is eaten up paying out against an asset that hasn’t generated any return. The destructive force of this connect is exacerbated by the stock buy backs whose sole purpose is to drive market cap higher. And for what benefit? What does a higher market cap or a higher valuation do to improve the operation and long term success of the business? Historically market cap was a represenation of operational performance and expected future growth but it has now become the objective. Apple’s numbers are mediocre. But they are distributing $110 billion in cash this year so it doesn’t matter.

They hit a trillion dollar market cap. That puts its price-to-sales in line with Amazon, which has a 3 year revenue growth rate 7x higher than Apple’s (32% vs. 4.5%). Amazon’s growth rate continues to accelerate while Apple actually lost overall marketshare dropping from second largest to the third largest seller of smartphones, something that hasn’t ever happened. And so why would a firm that is losing marketshare not be putting its capital to work? The proof is in the pudding. Amazon doesn’t distribute cash to speculators. It attracts speculators by driving expected future growth. The rest of the market is attracting speculators by paying them cash. In effect, CEO’s are investing in market cap today rather than growth tomorrow. The result is that Amazon is in a league of its own, trouncing incumbants in any sector it enters because it invests in being better.

The moral of the story is that when market cap becomes the objective of capital rather than a representation of productive capital allocation, productive investment is replaced with financial investment. When market cap is being driven by something other than expected future growth derived from productive investment it is coming at the cost of expected future growth due to lack of productive investment. Read that again.

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The netire region depends on China to a huge degree.

The Looming Threat of a Yuan Depreciation (Magnus)

When the Asian financial crisis occurred 20 years ago, many nations in East and Southeast Asia succumbed because they were following inconsistent domestic and international economic and financial policies. But one trigger was the 50% fall in the Japanese yen against the dollar between the end of 1995 and the summer of 1998 amid the American stock market’s bull run that lasted until 2002. Fast forward to today, and the dollar is on a roll again, thanks to a strong economy and tensions between its fiscal and monetary policies. Higher U.S. interest rates and a stronger dollar are already raising debt interest costs for Asian borrowers, but this time the falling Chinese yuan looms as a proximate cause of trouble.

Asia’s vulnerability to developments in U.S. financial markets has been widely noted. It is true that unlike the Asian financial crisis of 1997-1998, most countries in the region have stronger foreign exchange reserves. They are better positioned when measured against important indicators such as months of import cover, short-term debt and foreign debt ratios. Most Asian countries have current account surpluses, and even those with deficits, such as India, Indonesia, Myanmar and the Philippines do not look overly challenged. But while the sensitivity to shocks is lower than it was 20 years ago, there is no cause for complacency. And there is still a potential spoiler, the yuan, which is now under downward pressure, but which was an agent of calm in the last Asian crisis.

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The US wants access to Russian facilities. Sure. They’re going to see OK, if we get access to yours.

Russia Blasts New US Sanctions As ‘Theatre Of The Absurd’ (G.)

Russian officials reacted with outrage and markets slumped on Thursday morning following the announcement of tough new US sanctions over Russia’s alleged use of a nerve agent in the Salisbury attack. President Vladimir Putin’s spokesman, Dmitry Peskov, said the sanctions were “absolutely unlawful and don’t conform to international law”, as politicians vowed to respond with countermeasures, which could include bans on the exports of rockets or resources for manufacturing. “The theatre of the absurd continues,” tweeted Dmitry Polyanskiy, first deputy permanent representative of Russia to the UN. “No proofs, no clues, no logic, no presumption of innocence, just highly-likelies. Only one rule: blame everything on Russia, no matter how absurd and fake it is. Let us welcome the United Sanctions of America!”

A member of the Duma’s foreign affairs committee, Leonid Slutsky, said Russia could block exports of RD-180 rocket engines to the US as a potential countermeasure, the RIA Novosti news agency reported. The United States announced on Wednesday that it would impose restrictions on the export of sensitive technology to Russia because of its use of a nerve agent in the attempted murder of a former Russian spy and his daughter in Britain. The State Department said the new sanctions would come into effect on 22 August and would be followed by much more sweeping measures, such as suspending diplomatic relations and revoking Aeroflot landing rights, if Russia did not take “remedial” action within 90 days.

Moscow is not expected to agree to the response required by US legislation, which includes opening up Russian scientific and security facilities to international inspections to assess whether it is producing chemical and biological weapons in violation of international law.

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Russia is losing patience.

US Curbs On Russian Banks Would Be Act Of Economic War – Medvedev (R.)

Russia would consider any U.S. move to curb the operations of Russian banks or their foreign currency dealings a declaration of economic war, Prime Minister Dmitry Medvedev said on Friday. The United States announced a new round of sanctions on Wednesday targeting Russia that pushed the rouble to two-year lows and sparked a wider sell-off over fears Russia was locked in a spiral of never-ending sanctions. Separate legislation introduced last week in draft form by Republican and Democratic senators proposes curbs on the operations of several state-owned Russian banks in the United States and restrictions on their use of the dollar.

Medvedev said Moscow would take economic, political or other retaliatory measures against the United States if Washington targeted Russian banks. “I would not like to comment on talks about future sanctions, but I can say one thing: If some ban on banks’ operations or on their use of one or another currency follows, it would be possible to clearly call it a declaration of economic war,” said Medvedev. “And it would be necessary, it would be needed to react to this war economically, politically, or, if needed, by other means. And our American friends need to understand this,” he said, speaking on a trip to the Russian Far East.

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Someday people will recognize how well Russia is coping with all the nonsense.

US Must Turn to Russia to Contain China (Rickards)

Vladimir Putin stands accused in the media and global public opinion of rigging his recent reelection, imprisoning his political enemies, murdering Russian spies turned double-agent, meddling in Western elections, seizing Crimea, destabilizing Ukraine, supporting a murderous dictator in Syria and exporting arms to terrorist nations like Iran. At the same time, the country of Russia is more than Mr. Putin, despite his authoritarian and heavy-handed methods. Russia is the world’s 12th-largest economy, with a GDP in excess of $1.5 trillion, larger than many developed economies such as Australia (No. 13), Spain (No. 14) and the Netherlands (No. 18). Its export sector produces a positive balance of trade for Russia, currently running at over $16 billion per month.

Russia has not had a trade deficit in over 20 years. Russia is also the world’s largest oil producer, with output of 10.6 million barrels per day, larger than both Saudi Arabia and the United States. Russia has the largest landmass of any country in the world and a population of 144 million people, the ninth largest of any country. Russia is also the third-largest gold-producing nation in the world, with total production of 250 tons per year, about 8% of total global output and solidly ahead of the U.S., Canada and South Africa. Russia is highly competitive in the export of nuclear power plants, advanced weaponry, space technology, agricultural products and it has an educated workforce.

Russia’s government debt-to-GDP ratio is 12.6%, which is trivial compared with 253% for Japan, 105% for the United States and 68% for Germany. Russia’s external dollar-denominated debt is also quite low compared with the huge dollar-debt burdens of other emerging-market economies such as Turkey, Indonesia and China. Under the steady leadership of central bank head Elvira Nabiullina, the Central Bank of Russia has rebuilt its hard currency reserves after those reserves were severely depleted in 2015 following the collapse in oil prices that began in 2014. Total gold reserves rose from 1,275 tons in July 2015 to about 2,000 tons today. Russia’s gold-to-GDP ratio is the highest in the world and more than double those of the U.S. and China.

In short, Russia is a country to be reckoned with despite the intense dislike for its leader from Western powers. It can be disliked but it cannot be ignored. Russia is even more important geopolitically than these favorable metrics suggest. Russia and the U.S. are likely to improve relations and move closer together despite the current animosity over election meddling and the attempted murders of ex-Russian spies. The reason for this coming thaw has to do with the dynamics of global geopolitics. There are only three countries in the world that are rightly regarded as primary powers — the U.S., Russia and China. These three are the only superpowers. Some analysts may be surprised to see Russia on the superpower list, but the facts are indisputable.

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China exports the Silk Road. And creates dependencies that way.

Pakistan Is On The Brink Of Economic Disaster (CNBC)

Pakistan is on the brink of economic disaster, experts say. Foreign exchange reserves are at four-year lows, pressuring the local rupee and triggering worries that Islamabad may soon be unable to finance monthly import bills. The developing country is also awash in external debt, having taken on loans from China for the $62 billion China-Pakistan Economic Corridor. To avoid a full-blown balance of payments crisis, Islamabad needs outside help. It has two options: the IMF or Beijing. Neither, however, may solve its economic woes in the long run. The South Asian nation is no stranger to IMF bailouts — it has gone through 21 programs in total, with the most recent one ending two years ago.

If the administration of incoming Prime Minister Imran Khan seeks out another loan, estimated at $10 billion, the country will be subject to the IMF’s strict austerity measures that’re likely to hurt growth. It also wouldn’t bode well politically for Khan, who called on the campaign trail for Pakistan to become self-sufficient. The U.S., meanwhile, has taken issue with the idea of IMF funds going toward Pakistan’s Chinese debt obligations. “There’s no rationale for IMF tax dollars — and associated with that, American dollars that are part of the IMF funding — for those to go to bail out Chinese bondholders or China itself,” Secretary of State Mike Pompeo told CNBC last week.

In response, Pakistan’s finance ministry has refuted Pompeo’s linkage of IMF assistance with the China-Pakistan Economic Corridor. Alternatively, Khan’s government could turn to China for fresh loans. But that would mean Islamabad wading even deeper into the so-called “Chinese debt trap” — a frequent criticism of Beijing’s infrastructure spending spree that’s known as the Belt and Road Initiative, of which the CPEC is a part. Last month, the Asian giant loaned Pakistan $1 billion to boost its shrinking foreign currency reserves. For the current fiscal year thus far, China’s lending to Pakistan is set to exceed $5 billion, according to Reuters.

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They’ve never seen an actual plan.

Tesla Board Plans To Tell Elon Musk To Recuse Himself (CNBC)

The Tesla board of directors plans to meet with financial advisors next week to formalize a process to explore Elon Musk’s take-private proposal, according to people familiar with the matter. Musk announced via Twitter this week that he hopes to take the automaker private, in what would be one of the biggest such deals in history. The board is likely to tell Musk, the Tesla chairman and CEO, to recuse himself as the company prepares to review his take-private proposal, according to these people, who asked not to be named because the conversations are private. The board has told Musk that he needs his own separate set of advisors, one of the people said. Tesla’s board will likely develop a special committee of a smaller number of independent directors to review the buyout details, the people added.

Musk previously talked with Saudi Arabia’s sovereign wealth fund about a take-private deal, said one of the people. Saudi’s Public Investment Fund bought a 3% to 5% stake in the electric car maker, The Financial Times reported earlier this week. It isn’t yet known whether Saudi’s Public Investment Fund has agreed to commit money to the transaction. It also still isn’t clear if Tesla has committed financing. Musk tweeted he had “funding secured” on Tuesday when he said he was considering taking the company private at $420 per share. Tesla has declined to comment on funding for the transaction, leading to speculation Musk doesn’t have committed financing and drawing a request for more information from the SEC.

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US involvement in Nordstream 2?

US, EU Laying Groundwork For New Trade Deal (CNBC)

Two weeks after reaching a handshake agreement to calm trade talks and back off new tariffs, the United States and European Union are beginning to lay the formal groundwork underpinning any deal. On Tuesday, the State Department sent a cable to U.S. embassies across Europe, directing them to identify business areas ripe for lowering of tariffs or cutting of red tape, according to a readout of the cable provided to CNBC. The communication placed particular emphasis on deals that would increase U.S. energy and soybean exports, two areas highlighted in a joint statement the U.S. and the EU put out following the July 25 meeting.

One of the ideas that had been discussed is potential American involvement in a Russian natural gas pipeline into Germany that President Donald Trump had criticized. European Commission President Jean-Claude Juncker told Trump at the White House last month that “most” EU countries disagreed with German Chancellor Angela Merkel’s decision to broker the deal with Russia, according to a senior administration official. The State Department declined to comment, citing a policy not to confirm or deny internal communications. But the move represents an effort to source deliverables for talks set to take place when a delegation from the European Union visits Washington later this month.

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It’s a good idea to hold Sessions in contempt. But he’s the AG!.

US Judge Orders Deportation Plane Turnaround (BBC)

A federal judge has ordered a mother and her daughter be flown back to the United States, after learning they had been deported mid-appeal. The two were being represented in a lawsuit by the American Civil Liberties Union (ACLU), who said they had fled “extreme sexual and gang violence”. The judge said it was unacceptable they had been removed during their appeal. He reportedly also said Attorney General Jeff Sessions could be held in contempt of court for the deportation. The mother and daughter were part of a case filed by the ACLU and the Centre for Gender and Refugee Studies on behalf of 12 mothers and children who said they had fled violence, but were at risk of deportation.

A tightening of rules in June by Mr Sessions means victims of domestic abuse and gang violence no longer generally qualify for US asylum. The government had pledged not to deport anyone in the case before Friday at the earliest, ACLU said. But ACLU said they learned during Thursday’s emergency hearing that the mother and daughter had already been put on a flight back to El Salvador by US authorities. Washington DC District Court Judge Emmet Sullivan said that it was unacceptable that people claiming asylum had been removed while lawyers argued their case. He branded the situation “outrageous” and ordered the pair be returned immediately, according to reports. An official from the Department of Homeland Security told the Reuters agency that the agency worked to comply with the court’s order.

“Upon arrival in El Salvador, the plaintiffs did not disembark and are currently en route back to the United States,” the department said in an emailed statement. The mother and daughter are said to have arrived back in Texas, where they were being held, by Thursday night.

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It’s a market place. Supply and demand.

Germany Inks Deal With Spain To Return Registered Migrants (AFP)

Berlin has concluded a deal with Madrid for Spain to take back migrants who had been registered by Spanish authorities, a German interior ministry spokeswoman said Wednesday, as Germany seeks to curb new arrivals. Under the accord, which will enter in to force on Saturday August 11, the migrants “could be sent back to Spain within 48 hours,” said interior ministry spokeswoman Eleonore Petermann, adding that Madrid did not lay down any condition in exchange. The deal is part of a series of bilateral agreements that Germany is seeking with EU partners, after a broader accord for the bloc proved elusive.

Chancellor Angela Merkel has been under pressure to reduce the number of new arrivals after a record influx of a million asylum seekers between 2015 and 2016 unsettled Germany. Besides Spain, Greece – another key arrival country for migrants who had undertaken the perilous sea journey crossing the Mediterranean – has also in principle agreed to such a deal, Berlin said in June. Italy’s new right-wing government has been more reluctant, as it is putting its focus on boosting controls at the EU’s external borders. Discussions with both Athens and Rome are “not over,” said Petermann. But Interior Minister Horst Seehofer had said in an interview published Sunday that talks with his Italian and Greek colleagues were ongoing “in a good atmosphere”.

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“10 million plastic bags per minute.”

New Zealand To Ban Single-Use Plastic Bags (AFP)

New Zealand became the latest country Friday to outlaw single-use plastic shopping bags, with Prime Minister Jacinda Ardern saying they will be phased out over the next year as a “meaningful step” towards reducing pollution. New Zealand uses “hundreds of millions” of single-use plastic bags each year, many of which end up harming marine life, Ardern said. “We need to be far smarter in the way we manage waste and this is a good start,” she said. “We’re phasing-out single-use plastic bags so we can better look after our environment and safeguard New Zealand’s clean, green reputation.”

Ardern said her coalition government, which includes the Green Party, was facing up to environmental challenges and “just like climate change, we’re taking meaningful steps to reduce plastics pollution so we don’t pass this problem to future generations.” Single-use plastic bags are among the most common items found in coastal litter in New Zealand and the environmental group Greenpeace welcomed the decision to outlaw them. “This could be a major leap forward in turning the tide on ocean plastic pollution and an important first step in protecting marine life such as sea turtles and whales, from the growing plastic waste epidemic,” Greenpeace Oceans Campaigner Emily Hunter said. A United Nations report in June said up to five trillion grocery bags are used globally each year, which is nearly 10 million plastic bags per minute.

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Jul 292017
 
 July 29, 2017  Posted by at 9:09 am Finance Tagged with: , , , , , , , ,  


Dorothea Lange Grocery store in Widtsoe, Utah 1936

 

Trump’s Mistake In Taking Ownership Of The Stock Market Bubble (LR)
Congress Checkmates Trump (And The American People) (LR)
Russia Hits Back Over Sanctions, Orders US Diplomats To Leave (R.)
EU Explores Account Freezes To Prevent Runs At Failing Banks (R.)
The Great Transatlantic Bond Divergence Unwind (WSJ)
Top German Automakers Sued in US Over Two-Decade ‘Cartel’ (BBG)
Wells Fargo Faces Angry Questions After New Sales Abuses Uncovered (R.)
Wells Fargo Cuts 70 Senior Managers in Retail Bank After Accounts Scandal (BBG)
What Explains amazon.com’s Share Price? (PCR)
Panama Leaks and the Fall of Pakistan’s Prime Minister (Niaz)
Plastic Microparticles Found In Flesh Of Fish Eaten By Humans (Ind.)

 

 

More incentives for the Fed to trigger a crisis.

Trump’s Mistake In Taking Ownership Of The Stock Market Bubble (LR)

Let’s start at the beginning. Bubbles and Busts are both created by The Federal Reserve. Presidents are merely along for the ride. They like to credit themselves for the bubbles, and then look for scapegoats, usually the (non-existent) free market during the busts. But it is The Fed that creates them both. President Trump has made a big (yet understandable) mistake. He’s tried to portray himself as the cause of the current bubble in the stock market. He wants credit where credit is due. In this case, credit is not due. As we already mentioned, the Fed created the current bubble, and did so a long time ago. One look at a chart of the S&P 500 says it all:

Chances are, Trump realizes that most people won’t look at a chart of the stock market and he just wants some good PR. The president wants people to think that he is the reason for the stock market bubble. This is a big mistake. The Fed is the premier member of the so-called “Deep State”. In fact, without The Fed, there would hardly be a “Deep State” to speak of. The Fed sits at the top of the Deep State. They have the ultimate power (that no human beings should ever have) to create new money out-of-thin-air. In case Trump hasn’t figured it out yet, the Deep State does not like him. Should a major decline in the stock market occur during Trump’s Administration, guess who will take the blame? President Trump. After all, he took ownership of the bubble!

Should the market tumble, the mainstream media (that also despises Trump) will have plenty of his quotes, YouTubes, and Tweets to use against him. The economic woes will be pinned on Trump. Will Trump deserve the blame? No, but it’ll be too late. This is not to say that a major decline will occur during Trump’s tenure. Bubbles can take on a life of their own, and this one may last during Trump’s full term. But that’s a risky gamble to make. This bubble is going on almost 10 years now without a serious decline. Should we see a major selloff, Trump has very few friends in the major power centers that will come to his aid. As Peter Schiff points out in this fantastic clip below: The Fed now has their fall guy:

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A curious move. An ultimate power game.

Congress Checkmates Trump (And The American People) (LR)

Yesterday, the US Senate passed HR 3364, the Countering America’s Adversaries Through Sanctions Act by a massive 98 yeas to two nays. Opposing the bill were Sens. Bernie Sanders (I-VT) and Rand Paul (R-KY). The bill passed in the House by 419-3 on Tuesday, with Reps Massie (R-KY), Amash (R-MI), and Duncan (R-TN) opposing. The new sanctions bill ties President Trump’s hands on foreign policy, as he will be forced to ask Congress for permission to ease the measures. Speaking in favor of the legislation, Sen. Bob Menendez (R-NJ) cited the need to send Russia a message that it cannot meddle in US elections, that it cannot annex Crimea, that it cannot invade Ukraine, and that it cannot indiscriminately kill women and children in Syria.

Those of us living in the actual real world recognize that the first count remains unproven and the remaining counts are simply fatuous, fact-free bluster by Washington’s uninformed, group-thinking, foreign policy elites. Fueled by the millions coming in to the military-industrial complex. The House and Senate passed “Countering America’s Adversaries Through Sanctions Act” now goes to President Trump’s desk, where he faces a damned if he does and damned if he doesn’t scenario. A veto would certainly be over-ridden, handing the president a bitter bi-partisan blow that would likely end whatever aspirations he may retain to keep his campaign promises to get along better with Russia.

Similarly, signing the bill signs a death warrant for any foreign policy different than the one served up by the neocons for decades: create enemies; push war propaganda; collect massive checks from military industrial complex; demonize any American refusing to go along; repeat, adding bombs as necessary. Checkmate, President Trump.

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Over 600 would have to leave. Question: why does the US have over 6000 more staff in Russia than vice versa?

Russia Hits Back Over Sanctions, Orders US Diplomats To Leave (R.)

Russia told the United States on Friday that some of its diplomats had to leave the country in just over a month and said it was seizing some U.S. diplomatic property as retaliation for what it said were proposed illegal U.S. sanctions. Russia’s response, announced by the Foreign Ministry, came a day after the U.S. Senate voted to slap new sanctions on Russia, putting President Donald Trump in a tough position by forcing him to take a hard line on Moscow or veto the legislation and anger his own Republican Party. President Vladimir Putin had warned on Thursday that Russia had so far exercised restraint, but would have to retaliate against what he described as boorish and unreasonable U.S. behaviour. Relations between the two countries, already at a post-Cold War low, have deteriorated even further after U.S. intelligence agencies accused Russia of trying to meddle in last year’s U.S. presidential election, something Moscow flatly denies.

The Russian Foreign Ministry said on Friday that the United States had until Sept. 1 to reduce its diplomatic staff in Russia to 455 people, the same number of Russian diplomats it said were left in the United States after Washington expelled 35 Russians in December. It said in a statement that the decision by Congress to impose new sanctions confirmed “the extreme aggression of the United States in international affairs.” “Hiding behind its ‘exceptionalism’ the United States arrogantly ignores the positions and interests of other countries,” said the ministry. “Under the absolutely invented pretext of Russian interference in their “Under the absolutely invented pretext of Russian interference in their domestic affairs the United States is aggressively pushing forward, one after another, crude anti-Russian actions. This all runs counter to the principles of international law.”

[..] An official at the U.S. embassy in Moscow, who declined to be named because they were not allowed to speak to the media, said there were around 1,100 U.S. diplomatic staff in Russia. That included Russian citizens and U.S. citizens. Most staff, including around 300 U.S. citizens, work in the main embassy in Moscow with others based in outlying consulates. The Russian Foreign Ministry said it was also seizing a Moscow dacha compound used by U.S. diplomats to relax from Aug. 1 as well as a U.S. diplomatic warehouse in Moscow.

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Confidence spelled backwards. How to cause a bank run in 3 easy lessons.

EU Explores Account Freezes To Prevent Runs At Failing Banks (R.)

European Union states are considering measures which would allow them to temporarily stop people withdrawing money from their accounts to prevent bank runs, an EU document reviewed by Reuters revealed. The move is aimed at helping rescue lenders that are deemed failing or likely to fail, but critics say it could hit confidence and might even hasten withdrawals at the first rumors of a bank being in trouble. The proposal, which has been in the works since the beginning of this year, comes less than two months after a run on deposits at Banco Popular contributed to the collapse of the Spanish lender. It also come amid a bitter wrangle among European countries over how to deal with troubled banks, roughly a decade after a financial crash that required the ECB to print billions of euros to prevent a prolonged economic slump.

Giving supervisors the power to temporarily block bank accounts at ailing lenders is “a feasible option,” a paper prepared by the Estonian presidency of the EU said, acknowledging that member states were divided on the issue. EU countries which already allow a moratorium on bank payouts in insolvency procedures at national level, like Germany, support the measure, officials said. “The desire is to prevent a bank run, so that when a bank is in a critical situation it is not pushed over the edge,” a person familiar with German government’s thinking said. To cover for savers’ immediate financial needs, the Estonian paper, dated July 10, recommended the introduction of a mechanism that could allow depositors to withdraw “at least a limited amount of funds.”

Banks, though, say it would discourage saving. “We strongly believe that this would incentivize depositors to run from a bank at an early stage,” Charlie Bannister of the Association for Financial Markets in Europe (AFME), a banking lobby group, said. The Estonian proposal was discussed by EU envoys on July 13 but no decision was made, an EU official said. Discussions were due to continue in September. The plan, if agreed, would contrast with legislative proposals made by the European Commission in November that aimed to strengthen supervisors’ powers to suspend withdrawals, but excluded from the moratorium insured depositors, which under EU rules are those below 100,000 euros ($117,000).

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Price discovery.

The Great Transatlantic Bond Divergence Unwind (WSJ)

Many of the trades embraced by markets after President Donald Trump’s election have been slowly unwinding in 2017. Here’s an important one that could have further to go: the gap between U.S. and German government bond yields. The spread between 10-year Treasurys and bunds ballooned after Mr. Trump’s November victory to a level not seen since before the fall of the Berlin Wall, around 2.3 percentage points by the end of 2016. U.S. yields rose sharply on the idea of reflation and stimulus, while Europe appeared stuck in a rut. At 1.75%age points, the gap is close to its pre-election level. But even that is unusual by historical standards. Between 1990 and 2014, the spread was only rarely wider than one percentage point, and over that period averaged just 0.2 point, according to data from FactSet.

Such a tight relationship between German and U.S. bonds reflected the long global bull market for bonds in the glory years of globalization. Relatively synchronized monetary policy meant yields fell on both sides of the Atlantic together. The Fed’s 2013 taper, followed by signals of coming European Central Bank bond buying helped set the bond markets apart. That both helped weaken the euro and encouraged a rush of bond issuance by U.S. companies in European markets as borrowing costs fell. Where policy goes now is key. Markets doubt how far the Fed might get with its tightening, and seem unflustered by the prospect of the central bank shrinking its balance sheet. Investors may be too relaxed, but in the absence of fiscal stimulus and inflation, much higher yields for Treasurys might be hard to achieve in the near term.

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But they rule Germany. So yeah, some fines etc., but the culture just goes on.

Top German Automakers Sued in US Over Two-Decade ‘Cartel’ (BBG)

German’s major automakers were accused in a U.S. lawsuit of acting as a cartel, colluding for nearly two decades to limit the pace of technological advances in their vehicles and stifle competition – allegations that widen the scope of the latest scandal to hit the nation’s auto industry. BMW AG, Daimler AG, Volkswagen AG and its Audi and Porsche brands shared competitive information about vehicle technologies with one another from 1996 through at least 2015 in violation of antitrust laws, according to a complaint filed Friday in San Francisco federal court. “These coordinated actions enabled the manufacturer defendants — the self-named ‘Fünfer-Kreise,’ or Circle of Five — to impose a German automobile premium on consumers premised on superior German engineering, while secretly stunting incentives to innovate,” the suit alleges.

The suit, which seeks class-action status on behalf of U.S. drivers, says the companies agreed to limit the development of vehicle systems, including emissions control. The arrangement allegedly led to the development of so-called “defeat devices” used by Volkswagen to cheat on pollution tests. Plaintiffs claim the operation of convertible roofs, body design, brakes and electronic systems were also part of the “technological innovations inhibited” by the pacts. The supplier of VW’s cheat software, Robert Bosch Gmbh, was also named as a defendant in the lawsuit.

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“The added cost of insurance pushed 274,000 customers into delinquency..”

Elizabeth Warren has called on the Fed to remove Wells Fargo board members. I think if your legal system does not allow you to put these people behind bars, maybe you should look there first. Many of these people should be put before a judge and Wells Fargo should be forced to close. Institutions like that are diseases in a society.

Wells Fargo Faces Angry Questions After New Sales Abuses Uncovered (R.)

New revelations that Wells Fargo spent years enrolling unknowing borrowers in costly auto insurance has put the bank under new pressure to answer for a months-long scandal over sales practices that have harmed millions of Americans. The latest news that 800,000 Wells Fargo auto borrowers were improperly charged for insurance rattled investors yet again, and sent its stock down 2.6% on Friday. Shareholders, analysts, lawmakers and consumer advocates demanded answers about how the situation manifested, and why Wells Fargo did not disclose the problems sooner, given existing turmoil over phony deposit and credit card accounts opened in customers’ names without their permission.

“This is a full-blown scandal — again,” said New York City Comptroller Scott Stringer, who oversees public pension funds that hold roughly 11.6 million Wells Fargo shares. “It’s unbelievable, outrageous, sad, and yet quintessential Wells Fargo. This isn’t just a corporate debacle. It’s caused real human harm.” Stringer called on the bank to install a new independent chair and “immediately” disclose more information. Wells Fargo first became aware of potential problems a year ago, when the auto lending business began receiving an unusually high number of complaints, Franklin Codel, head of consumer lending, said in an interview. The auto insurance program was quickly suspended, and the problem escalated to senior management, the board and regulators, he said.

Wells Fargo planned to delay public disclosure until it could notify affected customers and reimburse them. “The problem with disclosing to the marketplace today or several months ago is customers start calling and asking when they’re going to get their money,” he said. “It’s not a great customer experience to say, ‘Yeah, we’ll get back to you.'” [..] Wall Street analysts expect the financial damage to go beyond the $80 million in reimbursements. In a note on Friday, Piper Jaffray’s Kevin Barker predicted the true cost would be “multiples” of that figure, with lawsuits and further customer remediation. The added cost of insurance pushed 274,000 customers into delinquency, and led to at least 20,000 wrongful repossessions, according to the Times.

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“Community bank” and Wells Fargo in one sentence. Take out the ones that are most guilty and go on as you were.

Wells Fargo Cuts 70 Senior Managers in Retail Bank After Accounts Scandal (BBG)

Wells Fargo, the lender struggling to overcome a fake-accounts scandal in its community bank, said the division’s new leader is cutting about 70 senior executive jobs. The lender will reduce the number of regional and area presidents to 91, Mary Mack, head of the retail bank, said Friday in a memo to staff, a copy of which was obtained by Bloomberg. Bank spokeswoman Bridget Braxton confirmed the contents of the memo and said employees whose positions are eliminated will remain staff members for 60 days until further steps are decided. Most of the remaining managers will be re-titled as region bank presidents with direct responsibility for more employees than before, in a move aimed at reducing management levels across the branch network, Mack wrote.

Across its 10 geographical divisions, Wells Fargo previously employed 160 regional and area presidents. “Change is hard, yet change is necessary to make sure we are well positioned for the future,” Mack wrote. “In order to truly be better, we must put the right structure in place,” she added. The community-banking division, which houses the retail bank, has generated weaker profit since September when Wells Fargo was fined $185 million because employees had been opening accounts for more than a half decade without customers’ permission. This week, the firm’s consumer operations revealed another scandal, announcing that the bank had charged as many as 500,000 customers for auto insurance they didn’t need.

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“..Bill Gates who heads the largest digital technology company is on occasion second fiddle to Bezos who heads an online Sears or Macy’s.”

What Explains amazon.com’s Share Price? (PCR)

“Here are today’s top stories on Bloomberg” “Jeff Bezos briefly overtook Bill Gates as the world’s richest person. A surge in Amazon shares Thursday morning in advance of its earnings report gave Bezos a net worth of $92.3 billion, surpassing the Microsoft founder’s $90.8 billion fortune. In afternoon trading, Bezos remains ranked second on the Bloomberg Billionaires Index. Gates has held the top spot since May 2013.” Amazon’s stock closed yesterday at $1,046 per share. Amazon’s profits do not support this extraordinary price. Apple, a very profitable company, has a share price of $150.56, an overprice itself. What or who is making Bezos so rich from an online sales company? Note, amazon.com is just sales. It is not some new manufacturing technology that produces valuable output at low cost.

amazon.com is what Walmart, Sears, and Macy’s do, the difference being that amazon.com is online and Walmart, Sears, and Macy’s are in physical locations where real merchandise can be experienced hands on and tried on for fit. In other words, online purchases are convenient, but you don’t know what you are getting. Does it fit? What is the quality? And so forth. How many times do you send it back before you get what you want? There are two answers to the question about who is making Bezos rich. One is that Wall Street is betting that the collapse of US anti-trust law and regulatory authority—it is still on the books but not enforced, just look at the Big Banks—and the ability of Bezos to use his ownership of the Washington Post, the newspaper of the country’s capital, to support those who support him, ensure that amazon.com will be an online monopoly.

Once this is put in place, amazon’s prices and profits will rise, and the extraordinary amazon.com P/E ratio will come into line with reality. Another is that Bezos’ cooperation with Washington’s spy network over all Americans is paid for by the CIA’s many front companies driving up the price of amazon.com’s stock. As the price of amazon.com rises, so does Bezos’ wealth. I don’t know that either of these answers is correct. What I notice is that Bill Gates who heads the largest digital technology company is on occasion second fiddle to Bezos who heads an online Sears or Macy’s.

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Just in case you’re thinking things are a mess where you are. His brother is rumored to succeed him.

Panama Leaks and the Fall of Pakistan’s Prime Minister (Niaz)

On July 28, 2017, the Supreme Court of Pakistan (SCP) rendered a unanimous verdict by a five-member bench that disqualified Prime Minister Nawaz Sharif from holding public office. This outcome was the result of the Panama Leaks, which revealed that the premier and his family owned assets disproportionate to their known sources of income. The opposition Pakistan Tehreek-i-Insaf (PTI), led by Imran Khan, seized on this issue and managed to compel Pakistan’s normally apathetic state institutions to take notice. For over a year, the premier and his family failed to explain how they acquired upscale properties in London. The ruling family dug themselves even deeper into the hole in their effort to establish some kind of cover for their acquisitions by being deliberately inaccurate before the SCP and even forging documents.

Surrounded by sycophants, the premier was evidently badly advised at each step and he and his family have paid a very high political price and could well face jail time. Pakistan has a long tradition of dragging its civilian chief executives over the coals. No prime minister has completed a regular term in office, their tenures cut short by assassination, civilian or military coups, judicial intervention, and intra-party machinations. Many premiers have been overthrown or dismissed for alleged abuse of power, mal-administration, and corruption. Nawaz Sharif and his family, in being unable to account for their wealth, and in their crude attempts at a cover up, have demonstrated that they are evidently crooks.

This said, the Pakistan Muslim League-Nawaz (PML-N) has done a better job of delivering on its campaign promises than any political party in Pakistan’s democratic experience. Pakistan’s energy crisis has eased, the economy is headed towards 6% annual growth, FDI is the highest in a decade, per capita income has risen perceptively, major cities have seen considerable investment in their infrastructure, and the gross level of terrorist violence has declined. Given that the ruling party won in 2013 with as many votes as the next two largest parties combined, its victory in 2018 seemed all but assured.

[..] Since 1947, Pakistan state elites have presided over a massive privatization of public wealth. Entitlements in the form of plots, perks, benefits, are part of an elaborate system of bureaucratically induced shortages that breed systemic corruption and undermines governance. Pakistani private and public sector corporations and entrepreneurs guzzle subsidies and thrive only in a cartelized environment. Any attempt by a government to rationalize the economy or improve productivity is met with howls of protest and demands for more subsidies. Pakistani professionals, be they lawyers, doctors, engineers, educators, behave like mafias, seeking to avoid ethical checks while relentlessly pursuing self-aggrandizement.

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We’ll eat our own crap yet. Garbage in, garbage out.

Plastic Microparticles Found In Flesh Of Fish Eaten By Humans (Ind.)

Plastic microparticles are getting into the flesh of fish eaten by humans, according to a new study. A team of scientists from Malaysia and France discovered a total of 36 tiny pieces of plastic in the bodies of 120 mackerel, anchovies, mullets and croakers. They warned that as plastic attracts toxins in the environment, these poisons could be released into people’s bodies after they ate the fish. The plastics found included nylon, polystyrene and polyethylene. Writing in the journal Scientific Reports, the researchers said: “The widespread distribution of microplastics in aquatic bodies has subsequently contaminated a diverse range of aquatic biota, including those sold for human consumption such as shellfish and mussels.

“Therefore, seafood products could be a major route of human exposure to microplastics. “Microplastics were suggested to exert their harmful effects by providing a medium to facilitate the transport of other toxic compounds such as heavy metals and persistent organic pollutants to the body of organisms. Upon ingestion, these chemicals may be released and cause toxicity.” They suggested people eating the fish examined in this study, which are often dried and sold across Malaysia and neighbouring countries, could consume up to 246 pieces of microplastic a year. However, they added: “The majority of the tested fish in this study did not contain microplastics. Therefore, it is less likely that an individual would ingest the suggested maximum number of microplastics per annum.”

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