Nov 222018
 
 November 22, 2018  Posted by at 10:37 am Finance Tagged with: , , , , , , , , , , ,  


Rembrandt van Rijn Study of the Head and Clasped Hands of a Young Man as Christ in Prayer 1655

 

Mortgage Rates Slide May Be Too Late For The Housing Market (MW)
A $9 Trillion Corporate Debt Bomb Is ‘Bubbling’ In The US Economy (CNBC)
Multiple Risks Are Converging on Markets (Rickards)
May In Brussels Dash As Merkel Threatens To Pull The Plug On Brexit Summit (G.)
Salvini Ready To ‘Confront EU’ After Italy’s Budget Rejected Again (G.)
Facebook Admits Targeting George Soros After He Criticized Company (MW)
House GOP To Hold Hearing Into DOJ Probe Of Clinton Foundation (Hill)
Clinton Foundation Donations Plummet 90% (ZH)
Tyres And Synthetic Clothes ‘Biggest Causes Of Microplastic Pollution’ (G.)
Former New York Times Chief Lawyer: Rally to Support Julian Assange (Timm)

 

 

Despite Fed rate hikes, mortgage rates fall. An ominous sign. Maybe we should even say: mortgage rates fall because of Fed rate hikes. Is the pond getting smaller, or are there fewer fish?

Mortgage Rates Slide May Be Too Late For The Housing Market (MW)

Rates for home loans tumbled as turmoil rocked global financial markets, but any reprieve in rates may come too late for would-be home buyers or refinancers. The 30-year fixed-rate mortgage averaged 4.81% in the November 21 week, down 13 basis points, mortgage liquidity provider Freddie Mac said Wednesday. That’s the biggest weekly decline since January 2015 and the lowest level for the popular product since early October. The 15-year fixed-rate mortgage averaged 4.24%, down 12 basis points during the week. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.09%, down from 4.15%. Those rates don’t include fees associated with obtaining mortgage loans.

Fixed-rate mortgages follow the U.S. 10-year Treasury note, although with a slight delay. As a global stock sell-off has raged over the past week, bonds have been the best house in a bad neighborhood. The yield on the benchmark 10-year bond touched a six-week low Monday. Bond yields decline as prices rise, and vice versa. Meanwhile, this week has brought a raft of fresh information on the housing market, little of it cheery. Sales of already-owned homes perked up in October, but are still lower than the year-ago selling pace by more than 5%. Home builders broke ground on more — but not enough — homes. And one fresh data point bears watching: mortgage applications for newly-constructed houses are plunging, according to the Mortgage Bankers Association.

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Forgive me for presuming there are several such debt bombs.

A $9 Trillion Corporate Debt Bomb Is ‘Bubbling’ In The US Economy (CNBC)

At first glance, it looks like a $9 trillion time bomb is ready to detonate, a corporate debt load that has escalated thanks to easy borrowing terms and a seemingly endless thirst from investors. On Wall Street, though, hopes are fairly high that it’s a manageable problem, at least for the next year or two. The resolution is critical for financial markets under fire. Stocks are floundering, credit spreads are blowing out and concern is building that a combination of higher interest rates on all that debt will begin to weigh meaningfully on corporate profit margins. “There is angst in the marketplace. It’s not misplaced at all,” said Michael Temple, director of credit research at asset manager Amundi Pioneer.

“But are we at that moment where this thing blows sky high? I would think that we’re not there yet. That’s not to say that we don’t get there at some point over the next 12 to 18 months as rates continue to move higher.” [..] Over the past decade, companies have taken advantage of low rates both to grow their businesses and reward shareholders. Total corporate debt has swelled from nearly $4.9 trillion in 2007 as the Great Recession was just starting to break out to nearly $9.1 trillion halfway through 2018, quietly surging 86 percent, according to Securities Industry and Financial Markets Association data. Other than a few hiccups and some fairly substantial turbulence in the energy sector in late-2015 and 2016, the market has performed well.

In fact, Fitch Ratings forecasts bond defaults for 2019 at the lowest since 2013, with leveraged loans at the lowest since 2011. Such high debt levels are “certainly something to take notice of,” said Eric Rosenthal, Fitch’s senior director of U.S. leveraged finance. “In terms of the systemic risk, at the moment it’s not there.” One reason markets worry about debt is that there’s not as much cash around to cover it. The cash-to-debt ratio for corporate borrowers fell to 12 percent in 2017, the lowest ever.

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It’s starting to feel like a siege.

Multiple Risks Are Converging on Markets (Rickards)

Warnings of economic collapse are no longer confined to the fringes of economic analysis but are now coming from major financial institutions and prominent economists, academics and wealth managers. Leading financial elites have been warning of coming collapses and dangers. These warnings range from the IMF’s Christine Lagarde, Bridgewater’s Ray Dalio, the Bank for International Settlements and many other highly regarded sources. Just when we think we’ve seen enough of these, another one arrives. This time it’s the legendary Paul Tudor Jones, who manages Tudor Investment. I’ve met Jones; he’s a cerebral yet polite and mild-mannered manager from Tennessee who has not lost his Southern accent despite decades in Connecticut and an estate on Maryland’s Eastern Shore.

What gives Jones’ voice added authority is his longevity in the fund investment world. He’s managed through the 1987 stock crash, the 1994 Mexican crisis, the 1998 Long Term Capital meltdown, the 2000 dot-com crash and, of course, the 2008 financial panic. Jones knows that panics happen, but he also knows they don’t happen all the time. Panics take years to build and usually have specific triggers (even though endpoints can spin wildly out of control). Jones does not treat the possibility of a financial crisis lightly, so his warning deserves close consideration. Jones warns that the next crisis is likely to be triggered by excessive debt, specifically corporate debt, which can be more difficult to manage or bail out than sovereign debt.

At the same time, other gurus are warning that the next panic will emerge from the foreign exchange market, overvalued equities or commercial real estate. Perhaps the real message is that all of these areas are vulnerable and the next crisis will seem to come from everywhere at once. That’s the danger. We’re looking at another debt crisis and global financial panic. Only this time it won’t come from mortgages alone but from all directions at once.

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The original headline talked of 24 hours.

May In Brussels Dash As Merkel Threatens To Pull The Plug On Brexit Summit (G.)

Theresa May is to make an emergency dash to Brussels on Saturday to complete the Brexit negotiations after the German chancellor, Angela Merkel, threatened to pull the plug on the Sunday leaders’ summit. As she emerged from talks in Brussels lasting nearly two hours with the European commission president, Jean-Claude Juncker, the British prime minister admitted that there were some major issues to resolve. Merkel had let it be known through her diplomats in Brussels that she was unwilling to negotiate with May on Sunday at the extraordinary Brexit summit. She had demanded a finalised agreement to emerge in good time before the leaders’ meeting.

The development threatened to disrupt Downing Street’s plans for agreement among leaders this month in time for a meaningful vote in parliament in early December. After meeting the European commission president on Wednesday, May said: “We have had a very good meeting this evening. We have made further progress and as a result, we have given sufficient direction to our negotiators. “I hope for them to be able to resolve the remaining issues and that work will start immediately. I now plan to return for further meetings, including with President Junker, on Saturday to discuss how we can bring to a conclusion this process and bring it to a conclusion in the interests of all our people.”

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Salvini and Di Maio said again this morning that they won’t change a letter in their budget.

Salvini Ready To ‘Confront EU’ After Italy’s Budget Rejected Again (G.)

Italy’s deputy prime minister Matteo Salvini has said he is prepared to confront EU leaders after the European commission rejected his country’s draft 2019 budget for a second time, while calling on them to “respect the Italian people”. Italy is facing sanctions after the commission said in a report that the government of the far-right League and anti-establishment Five Star Movement had seriously violated fiscal rules. Both parties’ leaders have refused to succumb to pressure to change their deficit target of 2.4% of GDP as they endeavour to push through campaign promises, such as introducing a universal basic income, cutting taxes and lowering the retirement age.

Italy has about €2.3tn (£2tn) of public debt and the Bank of Italy warned this month that the cost of servicing the debt could rise to €5bn in 2019 and €9bn in 2020. The government is convinced that the budget would help the Italian economy grow by 1.5% over the next year. However, the economy stagnated in the third quarter. On Wednesday Italy’s national statistics agency, Istat, revised down its growth forecast for the year to 1.1%; in May it predicted 1.4% for 2018. Salvini, who leads the League, responded sarcastically to news of the commission’s report. “A letter from the EU? I’m also waiting for one from Father Christmas,” he told reporters.

Referring to the commission president and economics commissioner, Salvini said he was ready to “confront [Jean-Claude] Juncker, [Pierre] Moscovici or whoever” over a budget he said responded to the needs of Italians.

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But Zuckerberg and Sandberg plead innocent.

Facebook Admits Targeting George Soros After He Criticized Company (MW)

Facebook Inc. admitted Wednesday that it asked an opposition-research company to investigate billionaire George Soros over his criticism of the social network. In an internal memo released publicly late Wednesday, Elliot Schrage, Facebook’s outgoing head of communications and policy, said he was responsible for hiring the company, Definers Public Affairs, to investigate who was behind the “Freedom From Facebook” campaign. “In January 2018, investor and philanthropist George Soros attacked Facebook in a speech at Davos, calling us a ‘menace to society,’” Schrage wrote in the memo. “We had not heard such criticism from him before and wanted to determine if he had any financial motivation. Definers researched this using public information.

“Later, when the ‘Freedom from Facebook’ campaign emerged as a so-called grassroots coalition, the team asked Definers to help understand the groups behind them. They learned that George Soros was funding several of the coalition members. They prepared documents and distributed these to the press to show that this was not simply a spontaneous grassroots movement.” Definers later distributed a document suggesting Soros, a major donor to liberal causes, bankrolled the anti-Facebook campaign, playing into anti-Semitic conspiracy theories about Soros. Facebook Chief Executive Mark Zuckerberg and Chief Operating Officer Sheryl Sandberg have denied knowledge of the Definers efforts until after it was revealed by a New York Times report last week. Facebook has since cut ties with Definers.

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A long running but secretive investigation, running concurrently with Mueller’s.

House GOP To Hold Hearing Into DOJ Probe Of Clinton Foundation (Hill)

Rep. Mark Meadows (R-N.C.) said Tuesday that House Republicans plan to hear testimony on Dec. 5 from the prosecutor appointed by former Attorney General Jeff Sessions to probe alleged wrongdoing by the Clinton Foundation. [..] Meadows, who is also the chairman of the conservative House Freedom Caucus, said the committee plans to delve into a number of Republicans concerns surrounding the foundation, including whether any tax-exempt proceeds were used for personal gain and whether the foundation complied with IRS laws. Sessions appointed Huber last year to work in tandem with the Justice Department to look into conservative claims of misconduct at the FBI and review several issues surrounding the Clintons.

This includes former Secretary of State Hillary Clinton’s ties to a Russian nuclear agency and concerns about the Clinton Foundation. Huber’s work has remained shrouded in mystery. The White House has released little information about Huber’s assignment other than Sessions’s address to Congress saying his appointed successor should address concerns raised by Republicans. But Meadows said the committee thinks it’s time Huber gives an update to Congress about his findings and expects him to be one of the witnesses at the hearing. Meadows also added that his committee is also trying to secure testimonies from whistleblowers who could have more information about potential improprieties surrounding the Clinton Foundation. “We’re just now starting to work with a couple of whistleblowers that would indicate that there is a great probability of significant improper activity that’s happening in and around the Clinton Foundation,” he said.

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They must have thought for quite a while that there would never be any scrutiny.

Clinton Foundation Donations Plummet 90% (ZH)

The Clinton Foundation saw contributions dry up approximately 90% over a three-year period between 2014 and 2017, according to financial statements. The global charity is currently under investigation by the DOJ, FBI and IRS for a variety of allegations – including whether favors were handed out while Hillary Clinton was Secretary of State, also known as “pay for play.” The Clinton-led State Department authorized $151 billion in Pentagon-brokered deals to 16 countries that donated to the Clinton Foundation – a 145% increase in completed sales to those nations over the same time frame during the Bush administration, according to IBTimes.

2014

2017

“American defense contractors also donated to the Clinton Foundation while Hillary Clinton was secretary of state and in some cases made personal payments to Bill Clinton for speaking engagements. Such firms and their subsidiaries were listed as contractors in $163 billion worth of Pentagon-negotiated deals that were authorized by the Clinton State Department between 2009 and 2012.” -IBTimes. Then there was that $1 million check Qatar reportedly gave Bill Clinton for his birthday in 2012, which the charity confirmed it accepted. Coincidentally, we’re sure, Qatar was one of the countries which gained State Department clearance to buy US weapons while Clinton was Secretary of State, “even as the department signaled them out ofr a range of alleged ills,” according to IBTimes.

Then there was the surely unrelated $145 million donated to the Foundation from parties linked to the Uranium One deal prior to its approval through a rubber-stamp committee. “The committee almost never met, and when it deliberated it was usually at a fairly low bureaucratic level,” Richard Perle said. Perle, who has worked for the Reagan, Clinton and both Bush administrations added, “I think it’s a bit of a joke.” –CBS. Meanwhile, according to a November 2016 report by the Dallas Observer, the Clinton Foundation has been under investigation by the IRS since July, 2016, while the Arkansas FBI field office has been investigating allegations of pay-for-play and tax code violations, according to The Hill.

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Like that fleece sweater?

Tyres And Synthetic Clothes ‘Biggest Causes Of Microplastic Pollution’ (G.)

Vehicle tyres and synthetic clothing are the two leading contributors to microplastic pollution from UK households, according to a new report from Friends of the Earth. The report estimates that between 9,000 and 32,000 tonnes of microplastic pollution enter British waterways each year from just four sources. The two leading sources are tyre abrasion, with between 7,000 and 19,000 tonnes entering surface waters each year, and clothing. In the UK an estimated two-thirds of clothing is made from synthetic plastic material, according to analysts from Eunomia, who wrote the report for FoE.

Up to 2,900 tonnes of microplastics from the washing of synthetic clothing such as fleeces could be passing through wastewater treatment into our rivers and estuaries. The scale of plastic pollution from household plastics is of the same magnitude as that from large plastic waste such as bottles and takeaway containers – about 26,000 tonnes of which enters UK waterways each year. The environmental campaign group is calling on the government’s resources and waste strategy – expected next month – to include measures for tackling microplastics as part of a comprehensive action plan. The four key contributors to microplastic pollution in the oceans from UK sources, according to the report, are:

• Vehicle tyres: 68,000 tonnes of microplastics from tyre tread abrasion are generated in the UK every year, with between 7,000 and 19,000 tonnes entering surface waters;

• Clothing: the washing of synthetic clothing could result in the generation of 2,300-5,900 tonnes of fibres annually in the UK – up to 2,900 tonnes of this could be passing through wastewater treatment into our rivers and estuaries;

• Plastic pellets used to manufacture plastic items. Up to 5,900 tonnes are lost to surface waters in the UK every year;

• Paints on buildings and road markings – weather and flake-off results in between 1,400 and 3,700 tonnes ending up in surface water every year.

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There’s a disturbing trend emerging that people are fully blind to. In this piece, and I’ve seen it a lot more recently, the topic is the 1st amendment. To make their well-meaning arguments, writers then pose questions like “What if Assange DID get his info from Russia?” or “What if Assange really DOES hate America?” The response of course is that this would make no difference as far as the 1st amendment is concerned.

But in the meantime the possibility that Assange is indeed a Russian agent who hates all Americans has been introduced into the narrative. That makes these articles effectively part of the smear campaign. There is no indication that either allegation is true, but they are posited by those ostensibly defending him. They don’t help. Or rather, they help smear.

Former New York Times Chief Lawyer: Rally to Support Julian Assange (Timm)

I recently spoke to James Goodale, the famed First Amendment lawyer and former general counsel the New York Times, who led the paper’s legal team in the famed Pentagon Papers case about the dire impact the Justice Department’s move may have on press freedom, regardless of whether people consider Assange himself a “journalist”.

There’s speculation on what Assange could be charged with. There’s a possibility that he could be outright charged under the Espionage Act for the act of publishing classified information. Then there’s the “conspiracy theory” that Assange was engaged in a conspiracy with his sources by asking them or soliciting more information from them that the sources may have gathered illegally. Do you find that type of charge would be just as dangerous as a charge for publishing information?

I do find that that charge would be just as dangerous. As a matter of fact, a charge against Assange for “conspiring” with a source is the most dangerous charge that I can think of with respect to the First Amendment in almost all my years representing media organizations. The reason is that one who is gathering/writing/distributing the news, as the law stands now, is free and clear under the First Amendment. If the government is able to say a person who is exempt under the First Amendment then loses that exemption because that person has “conspired” with a source who is subject to the Espionage Act or other law, then the government has succeeded in applying the standard to all news-gathering.

That will mean that the press ability to get newsworthy classified information from government sources will be severely curtailed, because every story that is based on leaked info will theoretically be subject to legal action by the government. It will be up to the person with the information to prove that they got it without violating the Espionage Act. This would be, in my view, the worst thing to happen to the First Amendment-almost ever.

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Nov 212018
 
 November 21, 2018  Posted by at 10:07 am Finance Tagged with: , , , , , , , , , , , , ,  


Jack Delano Lower Manhattan 1941

 

Senate Calls On Trump For Saudi Answers (BBC)
Saudi Arabia Tortured Female Right-to-Drive Activists – Amnesty (AP)
Trump Submits Answers To Robert Mueller Questions In Russia Probe (Ind.)
Trump Wanted To Order Justice Dept To Prosecute Clinton, Comey – NYT (R.)
Dow Plunges More Than 500 Points, Erases Gain For 2018 (CNBC)
Stunned Investors Observe The Market Carnage In Shock (ZH)
A Death Cross Is Forming In US Oil (MW)
Bitcoin Plunges As Much As 16% To Below $4,100, A New Low For The Year (CNBC)
Misguided Share Buybacks Are Hollowing Out Companies’ Balance Sheets (MW)
Bank of England Backs Theresa May’s Brexit Deal, Warns Of No-Deal Dangers (G.)
May’s Brussels Trip Only Start Of ‘Endless’ EU Trade Talks (G.)
UK To Be ‘Frozen Out’ Of 182 EU Decisions During Brexit Transition (Ind.)
Interpol Elects South Korean As Its President In Blow To Russia (G.)
Tax ‘Virgin Packaging’ To Tackle Plastics Crisis – Report (G.)
Dead Whale Washes Ashore In Indonesia With 6 Kilos Of Plastic In Stomach (AP)
Julian Assange Deserves A Medal of Freedom, Not A Secret Indictment (USA Today)

 

 

The indignation over Trump’s comments on Saudi Arabia is shifting into overdrive. Perhaps that’s needed to expose the hypocrisy inherent in them. It’s not Trump, it’s America that has condoned torture and murder by the House of Saud for decades. That started actively assisting the Saudi’s in Yemen under Obama. Trump refuses to be set up by the media and Democrats as the fall guy for $150 oil prices. He’s thinking: let Congress do it, now that it’s blue. If that’s immoral, he’s not alone.

Senate Calls On Trump For Saudi Answers (BBC)

US President Donald Trump has been asked to ascertain whether Saudi Crown Prince Mohammed bin Salman played a role in the murder of Jamal Khashoggi. Republican and Democratic leaders of the US Senate Foreign Relations Committee on Tuesday sent a letter demanding a second investigation. Mr Trump earlier defended US ties with Saudi Arabia despite international condemnation over the incident. Khashoggi was killed on 2 October inside the Saudi consulate in Istanbul. In a statement on Tuesday, Mr Trump acknowledged that the crown prince “could very well” have known about Khashoggi’s brutal murder, adding: “Maybe he did and maybe he didn’t!”

He later stated that the CIA had not made a “100%” determination on the killing. Following the president’s comments, Republican Senator Bob Corker and Democrat Bob Menendez issued a statement on behalf of the Senate Foreign Relations Committee. In it they called on Mr Trump to focus a second investigation specifically on the crown prince so as to “determine whether a foreign person is responsible for an extrajudicial killing, torture or other gross violation” of human rights. The request, issued under the Global Magnitsky Human Rights Accountability Act, requires a response within 120 days.

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OK, CNN, do your job.

Saudi Arabia Tortured Female Right-to-Drive Activists – Amnesty (AP)

Several activists imprisoned in Saudi Arabia since May, including women who campaigned for the right to drive, have been beaten and tortured during interrogation, Amnesty International has said. Saudi Arabia has detained at least 10 women and seven men on vague national security allegations related to their human rights work, the organisation said on Tuesday. Those detained include Loujain al-Hathloul, Eman al-Nafjan and Aziza al-Yousef, who had campaigned for the right to drive before the decades-long ban was lifted in June. Amnesty said that according to three testimonies it obtained, some of the activists were repeatedly given electric shocks and flogged, leaving some unable to walk or stand properly. In one instance, an activist was hung from the ceiling.

Another testimony said one of the detained women was subjected to sexual harassment by interrogators wearing face masks. The kingdom is at the centre of an international firestorm after the killing of Saudi journalist Jamal Khashoggi, who had written critically about Crown Prince Mohammed bin Salman’s crackdown on dissent, including the arrests of the women activists. Khashoggi was killed and then dismembered by Saudi agents in the kingdom’s consulate in Istanbul on 2 October. Lynn Maalouf, Amnesty’s Middle East research director, said: “Only a few weeks after the ruthless killing of Jamal Khashoggi, these shocking reports of torture, sexual harassment and other forms of ill-treatment, if verified, expose further outrageous human rights violations by the Saudi authorities.”

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What a waste of resources.

Trump Submits Answers To Robert Mueller Questions In Russia Probe (Ind.)

Donald Trump has submitted written answers to questions from Special Counsel Robert Mueller as part of the probe into Russian meddling in the 2016 election and possible collusion with the Trump campaign. “We answered every question they asked that was legitimately pre-election and focused on Russia,” Trump lawyer Rudy Giuliani said in an interview. “Nothing post-election. And we’ve told them we’re not going to do that.” Mr Giuliani said Trump did not plan to answer any questions from Mr Mueller on whether he tried to obstruct the investigation once he won office, such as by firing former FBI Director James Comey last year. “It is time to bring this inquiry to a conclusion,” the lawyer said in an earlier statement on the probe, which Mr Trump has repeatedly called a “witch hunt.”

Mr Trump signed the submission on Tuesday before he left Washington to spend the Thanksgiving holiday in Florida, a person familiar with the matter said. Mr Mueller was tasked to probe “any matters that arose or may arise directly from the investigation” into possible collusion between Mr Trump’s campaign and Russia during the 2016 election. [..] Mr Giuliani said in his statement the president had provided “unprecedented cooperation” with the probe over the past year and a half, noting that more than 30 White House-related witnesses had been questioned and 1.4 million pages of material turned over before Mr Trump responded to the pre-election questions in writing. He added that “much of what has been asked raised serious constitutional issues and was beyond the scope of a legitimate inquiry.”

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Not exactly news, is it? Of course there will be an investigation of Hillary, Comey and a whole circus around them. It would be a serious perverson of justice if there isn’t.

Trump Wanted To Order Justice Dept To Prosecute Clinton, Comey – NYT (R.)

U.S. President Donald Trump wanted to order the Justice Department to prosecute two political foes, his one-time presidential opponent Hillary Clinton and former FBI director James Comey, in the spring, but his White House counsel rebuffed him, the New York Times reported on Tuesday. Don McGahn, the White House counsel at the time, wrote a memo to the president outlining consequences for Trump if he did order these prosecutions. The outcomes ranged from the traditionally independent Justice Department refusing to comply, to congressional probes and voter outcry, the Times reported.

The New York Times also reported Trump’s lawyers privately asked the Justice Department to investigate Comey for mishandling sensitive government information and his role investigating Clinton’s use of a private email account and server, but law enforcement officials declined. It was not clear if Trump read the memo or pursued the prosecutions further, the New York Times said. It was also not clear what specific charges Trump wanted the Justice Department to pursue against Comey and Clinton, the Times reported. Trump has publicly railed against Clinton’s private email use during her tenure as U.S. Secretary of State, as well as her role in the Obama administration’s decision to allow a Russian company to buy a uranium mining firm.

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Time to start writing about finance again?!

Dow Plunges More Than 500 Points, Erases Gain For 2018 (CNBC)

The Dow Jones Industrial Average and S&P 500 fell sharply on Tuesday and turned negative for the year as a decline in Target shares pressured retailers, while some of the most popular tech shares dropped again. The 30-stock Dow dropped 551.80 points to 24,465.64 and the S&P 500 plunged 1.8 percent to close at 2,641.89. The Dow and S&P 500 were up 1.2 percent and 0.6 percent, respectively, for 2018 entering Tuesday. Meanwhile, the Nasdaq Composite also dropped 1.7 percent to 6,908.82 but managed to hang on to a slight gain for 2018. Tuesday’s declines come after the Dow dropped 395 points on Monday.

Stocks hit their lows of the day after Doubleline Capital founder Jeffrey Gundlach said stocks are still too expensive, adding there has not been a “panic low” yet. The Dow was down nearly 650 points at its session low, while the S&P 500 and Nasdaq had both dropped more than 2 percent. Target fell 10.5 percent after reporting weaker-than-expected earnings for the previous quarter. The company also posted lighter-than-forecast same-store sales, which is a key metric for retailers.

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Nah, they’re not investors.

Stunned Investors Observe The Market Carnage In Shock (ZH)

After another abysmal day, in which every single sector in the market closed in the red as stocks tumbled 2%, capping a dreadful two-month stretch since the S&P hit its all time highs exactly two months ago, which has seen both the S&P and the Dow turn red for the year with the Nasdaq just barely holding onto green, while oil crashed 6% slumping to a one year low, junk bonds matched a record streak of losses, the overall market just suffered one of its worst sessions in the past three years. But what is most remarkable is the following chart from Bloomberg which shows the year-to-date return of the best performing asset between US and global equities, corporate bonds, Treasuries, gold and real cash, and according to which 2018 is shaping up as what may be the worst year on record for cross-asset investors. Indeed, nothing at all has worked this year!

The inability of any single asset class to escape the dismal black hole supergravity of devastating losses in a brutal post-BTFD catharsis that has mutated into an equal-opportunity rout, crushing returns across all assets, has left investors reeling, shellshocked and paralyzed, and dreading what may come tomorrow let alone next year when both the US economy and corporate earnings are expected to see their supercharged recent growth rates come crashing back down to earth. “While there’s still no ‘panic in the streets,’ most traders are unconvinced that the selling will slow down anytime soon,” said Instinent’s head of trading Larry Weiss. “The flight to quality is now a flight to cash. It’s tough to convince anyone that now is the time to put money to work.”

[..] Hedge funds, who hoped that “buy the dip” would work one last time and who rushed into the traditional “safety” of tech stocks at the end of October, were whipsawed, and turned net sellers this month, with the group accounting for the most selling among major industries according to Goldman Sachs. Meanwhile, as if sensing the coming storm, Goldman writes that hedge fund net exposures steadily declined throughout 2018, including during 2Q and 3Q while the broad equity market rallied, leaving most investors in the cold. Net long exposure calculated based on 13-F filings and publicly-available short interest data registered 49% at the start of 4Q, a decline from 56% at the start of 2018, and one of the lowest in years.

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Potential volatility in oil is huge. Any little shrapnel of news, Saudi, Iran, Russia, shale, can force prices up 50%.

A Death Cross Is Forming In US Oil (MW)

Oil is already in a bear market, but now a fresh, negative pattern is crystallizing in the commodity that has absolutely bludgeoned bulls over the past two months. January West Texas Intermediate crude on its first full session as the front-month contract, was down a whopping 7.5%, to $52.91 a barrel on the New York Mercantile Exchange and that downtrend has propelled the U.S. benchmark to the brink of forming a death cross—a chart formation in an asset that many market technicians believe marks the point that a short-term decline morphs into a longer-term downtrend (see chart below).

Based on the continuous chart for the most-active oil contract, the 50-day moving average at $67.58 a barrel is less than 0.5% shy of falling beneath the long-term 200-day moving average at $67.25, according to FactSet data. At the current rate of decline, a death cross could occur within a week or two. Both the U.S. contract and the global benchmark Brent oil are in bear market, usually characterized as a decline of at least 20% from a recent peak. In fact, U.S. oil is down 31% from its Oct. 3 peak at $76.41 a barrel.

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Miners are ditching their equipment.

Bitcoin Plunges As Much As 16% To Below $4,100, A New Low For The Year (CNBC)

Bitcoin is still struggling to find a bottom this week. The digital currency dropped as much as 16 percent on Tuesday to its lowest level since Sept. 30, 2017, according to data from CoinMarketCap.com. Bitcoin fell as low as $4,076.59, bringing its total losses in seven days to roughly 30 percent. The cryptocurrency briefly pared those losses and was down about 7 percent in afternoon trading. As U.S. stock markets closed though, bitcoin was still down 12 percent over 24 hours, trading near $4,299, according to data from CoinDesk.

The price plunge came after weeks of rare stability for the world’s largest and best-known cryptocurrency. While global markets churned in October, bitcoin traded comfortably in the $6,400 range — a break from volatility earlier this year. Its total losses this year are now more than 65 percent. ts epic rise last year started right after Thanksgiving as it began to gain status as a household name. Since then, the cryptocurrency has fallen more than 40 percent. Bitcoin first topped $10,000 at the end of November and made it to nearly $20,000 a week before Christmas as retail investors poured in and two regulated exchanges prepared to launch futures markets.

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“With share repurchases in these companies being almost three times their actual investment, one must wonder how much actual U.S. economic growth they are expecting.”

Misguided Share Buybacks Are Hollowing Out Companies’ Balance Sheets (MW)

GE was one of Wall Street’s major share buyback operators between 2015 and 2017; it repurchased $40 billion of shares at prices between $20 and $32. The share price is now $8.60, so the company has liquidated between $23 billion and $29 billion of its shareholders’ money on this utterly futile activity alone. Since the highest net income recorded by the company during those years was $8.8 billion in 2016, with 2015 and 2017 recording a loss, it has managed to lose more on its share repurchases during those three years than it made in operations, by a substantial margin. Even more important, GE has now left itself with minus $48 billion in tangible net worth at Sept. 30, with actual genuine tangible debt of close to $100 billion.

As the new CEO Larry Culp told CNBC last Monday: “We have no higher priority right now than bringing those leverage levels down.” The following day, GE announced the sale of 15% of its oil services arm Baker Hughes, for a round $4 billion. Of course, since that sale values Baker Hughes at $26 billion, and GE paid $32 billion for 62% of Baker Hughes as recently as last year, which looks to me like a valuation for the whole company of $52 billion, GE shareholders appears to have lost half the value of their investment in Baker Hughes in about 18 months. [..] A recent Financial Times article outlined how the five tech companies with the most cash (Apple, Alphabet, Cisco, Microsoft and Oracle) have repurchased an astounding $115 billion of stock in the first three quarters of 2018.

By contrast, the total capital spending of the five companies was only $42.6 billion during the same period. The story then congratulated investors for having done so well out of President Trump’s tax reform, which lowered the corporate tax rate, thus encouraging investment in the United States. With share repurchases in these companies being almost three times their actual investment, one must wonder how much actual U.S. economic growth they are expecting. [..] These share repurchases are misguided in so many ways. First, Apple, Alphabet and Microsoft are valued by the stock market at close to $1 trillion, levels no company has ever reached before. If you ignore the current stock price, a company repurchasing its shares is simply giving away its cash and reducing its share count; it creates no value.

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Dangerously close to a political statement.

Bank of England Backs Theresa May’s Brexit Deal, Warns Of No-Deal Dangers (G.)

Mark Carney has thrown his weight behind Theresa May’s Brexit deal, warning that a no-deal scenario would damage the economy, trigger job losses, lead to lower pay for workers and cause inflation to rise. The governor of the Bank of England said May’s draft EU withdrawal agreement would “support economic outcomes” that would be positive for the British economy, primarily because it would give Britain more time to prepare for whatever final Brexit deal is agreed between Westminster and Brussels. “We welcome the transition arrangements in the withdrawal agreement. It’s at the heart [of the deal],” he told MPs on the Treasury select committee, a week after the prime minister agreed the terms of the deal with the EU.

“[The deal] improves our ability to discharge our function relative to having no deal,” he added. The timing of the governor’s comments could help to support May as she faces tough opposition from across the political divide, following cabinet resignations and Labour’s promise to vote it down in parliament. Carney warned that failure to agree a Brexit deal with Brussels before the March 2019 deadline would deliver a “large negative shock” to the UK economy that would have a persistent effect, lowering growth and causing job losses. He said such an outcome would deliver an “unprecedented supply shock” to the UK economy with few historical or international comparisons. “It wouldn’t be a happy situation to be in,” he said.

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These talks should have started two years ago. And even then.

May’s Brussels Trip Only Start Of ‘Endless’ EU Trade Talks (G.)

When Theresa May goes to Brussels for tea with Jean Claude Juncker on Wednesday afternoon, the two leaders will have in front of them a metaphorical Christmas tree of a political declaration. “And every member state has put a bauble on it”, an EU diplomat said. A seven-page document published last week, offering some heads of terms on the future relationship, is set to more than double to some 20 pages. Calls for more ambitious language around the trade elements have been made. Demands for a Spanish veto over any deal covering Gibraltar have been tabled. And an array of asks on so called “level playing field” commitments in any future trade deal are in the mix.

There is even talk of side-declarations to the political declaration emerging at the special Brexit summit next Sunday to allow member states to feel that they have drawn a line in the sand about the real trade talks to come. “It’s all getting very confusing,” admitted a second EU diplomat. Not to Sir Andrew Cahn, the former chief executive of the government’s UK Trade & Investment (UKTI) department, who was also an aide to Neil Kinnock when vice president of the European commission in the late 1990s. This is, he said, likely to be a mere amuse-bouche to the “continuous endless” talks that will open on the UK’s trading relationship with Brussels after 29 March 2019 as the UK finds its way around the EU’s orbit.

“It is a classic EU negotiation and the member states are performing their normal way,” Cahn said. “The French always come in late to toughen their negotiating position towards the end, and that’s when they can get some additional things. “The Spanish are copying with Gibraltar – although that is partly a function of domestic Spanish politics with Pedro Sánchez [the Spanish prime minister] being vulnerable at home.”

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What, she didn’t tell you?

UK To Be ‘Frozen Out’ Of 182 EU Decisions During Brexit Transition (Ind.)

The UK will be “frozen out” of EU decisions on no fewer than 182 new rules in the months after Brexit, a new analysis says, including over budget spending, road signs and drinking water. The full scale of fresh regulations in the pipeline – during Theresa May’s planned 21-month transition period – exposes the blunder of making Britain “a rule-taker, not a rule-maker”, it warns. During that transition, the UK will be bound by Brussels’ decisions but without any ministers in the EU council, or MEPs in the European parliament, to influence them. Now the campaign for a People’s Vote on the Brexit outcome has examined the decisions expected before 2020, which also include alcohol-taxing and rules for UK investment funds.

“This analysis sets out for the first time the full scale of the UK’s capitulation under this so-called deal,” said Chris Bryant, a Labour supporter of People’s Vote. “The prime minister’s deal would weaken our ability to have a say in over 180 crucial decisions that are going to be made in Europe while the UK is in transition – meaning we have to abide by their rulings but have no say and no ability to protect Britain’s interests. “This dodgy deal will leave Britain frozen out of decision making and forced to pay billions of Euros for the privilege.” The argument goes to the heart of criticism – by both pro and anti-Brexit MPs – that the UK will be a “vassal state” during the transition phase.

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Russophobia continues unabated.

Interpol Elects South Korean As Its President In Blow To Russia (G.)

South Korea’s Kim Jong-yang has been elected as Interpol’s next president, edging out a longtime veteran of Russia’s security services who was strongly opposed by the US, Britain and other European nations. The White House and its European partners had lobbied against Alexander Prokopchuk’s attempts to be named the next president of the international police body, saying his election would lead to further Russian abuses of Interpol’s “red notice” system to go after political opponents. Prokopchuk is a general in the Russian interior ministry and serves as an Interpol vice-president. Kim was chosen by Interpol’s 94-member states at a meeting of its annual congress in Dubai.

He will serve until 2020, completing the four-year mandate of his predecessor, Meng Hongwei, who went missing in his native China in September. Beijing later said Meng resigned after being charged with accepting bribes. Critics say that Prokopchuk oversaw a policy of systematically targeting critics and dissidents during his time in charge of the Russian office of Interpol. On Tuesday, the US secretary of state, Mike Pompeo, threw his weight behind Kim, who is the acting president of the global police body. “We encourage all nations and organisations that are part of Interpol and that respect the rule of law to choose a leader with integrity. We believe Mr Kim will be just that,” Pompeo told reporters.

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If only we move to recycled plastic! Geez, Louise, how about no plastic at all? You can cut at least 50% without changing anything much at all. More recycling is a fake message.

Tax ‘Virgin Packaging’ To Tackle Plastics Crisis – Report (G.)

The government should introduce a new tax on virgin packaging to revolutionise the recycling system in the UK and tackle the plastics crisis, according to a new report. The study, presented to MPs and industry figures at Westminster on Tuesday evening, calls on ministers to impose a fee on packaging materials and offer a rebate for those products that use more recycled material. The WWF and the Resource Association, which commissioned environment consultancy Eunomia to produce the report, said the proposals would transform the UK’s broken recycling system – and drastically reduce the demand for raw materials, including fossil fuels. Dr Lyndsey Dodd, head of marine policy at WWF UK, said: “Our oceans are choking on plastic, 90% of the world’s sea birds have fragments of plastic in their stomach.

Despite the public outcry, more products are being made with virgin, or new, plastic than with recycled plastic.” Last year the Guardian revealed that plastic production is set to increase by 40% over the next 10 years as fossil fuel companies look to use raw materials produced by fracking in the US. The new report follows an announcement in October that the government is launching a consultation on the introduction of a tax on all plastic packaging with a recycled content of less than 30%. [..] Earlier this year the Guardian reported the plastics recycling industry was under investigation for suspected widespread abuse and fraud within the export system. Since China banned the import of plastic waste, the UK has been chasing other markets in Malaysia, Vietnam and Thailand, but these countries are also imposing restrictions due to the stockpiling of waste.

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“..115 plastic cups, four plastic bottles, 25 plastic bags, two flip-flops, a nylon sack and more than 1,000 other assorted pieces of plastic..”

Dead Whale Washes Ashore In Indonesia With 6 Kilos Of Plastic In Stomach (AP)

A dead whale that washed ashore in eastern Indonesia had a large lump of plastic waste in its stomach, including drinking cups and flip-flops – causing concern among environmentalists and government officials in one of the world’s largest plastic polluting countries. Rescuers from Wakatobi National Park found the 9.5-metre sperm whale late on Monday in waters near Kapota Island, southeast of Sulawesi, after receiving a report from environmentalists that villagers had surrounded the dead creature and were beginning to butcher its rotting carcass, park chief Heri Santoso said. Researchers from wildlife conservation group WWF and the park’s conservation academy found about 5.9 kilograms of plastic waste in the animal’s stomach – including 115 plastic cups, four plastic bottles, 25 plastic bags, two flip-flops, a nylon sack and more than 1,000 other assorted pieces of plastic.

“Although we have not been able to deduce the cause of death, the facts that we see are truly awful,” said Dwi Suprapti, a marine species conservation coordinator at WWF Indonesia. She said it was not possible to determine if the plastic had caused the whale’s death because of the animal’s advanced state of decay. Indonesia, an archipelago of 260 million people, is the world’s second-largest plastic polluter after China, according to a study published in the journal Science in January. It produces 3.2 million tonnes of mismanaged plastic waste a year, of which 1.29 million tonnes ends up in the ocean, the study said.

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Can we say the MSM wakes up with this USA Today piece?

Julian Assange Deserves A Medal of Freedom, Not A Secret Indictment (USA Today)

On the same day the Assange indictment scored headlines, Trump awarded seven Presidential Medals of Freedom. No controversy greeted posthumous awards to Babe Ruth and Elvis Presley — unlike the ruckus regarding Miriam Adelson, wife of Republican super-donor Sheldon Adelson. Public Citizen, a liberal nonprofit, howled that the Adelson award “is just the latest sign of [Trump’s] ability to corrupt and corrode all aspects of the government.” New York Times columnist Paul Krugman caterwauled that it was “ludicrous” and “and an insult to people who received the medal for genuine service.” In reality, Presidential Medals of Freedom have routinely been exploited to buttress the political establishment, with bevies of awards for political operators, members of Congress, and pliable foreign leaders.

President Lyndon Johnson distributed a bushel of Medals of Freedom to his Vietnam War architects and enablers, perhaps as consolation prizes for losing the war. (The medal awarded to Defense Secretary Robert McNamara, whose lies about the war making progress cost thousands of Americans and Vietnamese their lives, fetched $40,625 at an auction a few years ago.) President George W. Bush conferred Medals of Freedom on his Iraq war team, including CIA chief George “Slam Dunk” Tenet, Iraq viceroy Paul Bremer, and ambassador Ryan Crocker, whom Bush called “America’s Lawrence of Arabia.”

Some of the biggest fabulists of the modern era — including Henry Kissinger and Dick Cheney — also pocketed the award.The controversies over Assange and Adelson provide a serendipitous opportunity to update the freedom awards. Because few things are more perilous to democracy than permitting politicians to coverup crimes, there should be a new Medal of Freedom category commending individuals who have done the most to expose official lies. This particular award could be differentiated by including a little steam whistle atop the medal — vivifying how leaks can prevent a political system from overheating or exploding.

Assange would deserve such a medal — as would Thomas Drake and Edward Snowden (who revealed NSA’s abuses), John Kiriakou (who revealed CIA torture), and Daniel Ellsberg (who leaked the Pentagon Papers). Admittedly, there may be no way to stop presidents from giving steam whistle freedom awards to political donors’ wives. Organizations like Wikileaks are among the best hopes for rescuing democracy from Leviathan. Unless we presume politicians have a divine right to deceive the governed, America should honor individuals who expose federal crimes.

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Oct 252018
 
 October 25, 2018  Posted by at 9:22 am Finance Tagged with: , , , , , , , , , , , ,  


Pablo Picasso Circus 1918

 

Donald Trump Attacks Media ‘Hostility’ After Attempted Pipe Bombings (G.)
CNN President Jeff Zucker Blasts Trump White House After Bomb Threat (THR)
Dow Falls 600 Points And Wipes Out 2018 Gains (MW)
Asia Pacific Shares In Freefall Amid Fears Over Global Economy (G.)
Value of Euro Zone Banks Drops by a Third From 2018 Peak (R.)
Spain’s Mortgage Market Seizes Up, Bank Stocks Sink, Legal Uncertainty Reigns
It’s Not Just Italy – France’s 2019 Budget Also A Concern For Brussels (CNBC)
Tesla Shares Soar On Surprise Third-Quarter Profit (CNBC)
Airbnb Can’t Go On Unregulated – It Does Too Much Damage To Cities (G.)
Brexit Deal ‘Progress Is At 0%’ Until Irish Border Solved – Verhofstadt (Ind.)
May Sets November Date To Trigger No-Deal Brexit Preparations (G.)
Disadvantaged Groups Trapped In Poverty And Excluded From UK Society (Ind.)
Ban Entire Pesticide Class To Protect Children’s Health – Experts (G.)
European Parliament Votes To Ban Single-Use Plastics (Ind.)
Humpback Whales Stop Singing When Ships Are Near (AFP)

 

 

Another crazy story. less than 2 weeks before the midterms some loonie allegedly sent crude explosive devices to Democrats and CNN. Obviously, doesn’t appear to help Trump. Who they all fall over each other to blame, absolving themselves from all responsibility in the process. Some details:

Bombs had ISIS-like logo’s on them
At least some contained shards of glass
They were sent to people who don’t open their own mail
None of the bombs went off
Powder in package to CNN was harmless

Seen a lot more like that on Twitter, many people saying the ‘bombs’ are a joke.

Donald Trump Attacks Media ‘Hostility’ After Attempted Pipe Bombings (G.)

Donald Trump has attacked what he called media “hostility” in a speech to a campaign rally following a wave of pipe bombs sent to senior Democrats, prominent critics and the broadcaster CNN. The US president, who earlier said at the White House he condemned the attempted bombings and that a “major federal investigation” was under way, followed this with a plea for unity during a midterms campaign rally in Mosinee, Wisconsin, later on Wednesday. “Any acts or threats of political violence are an attack on our democracy itself,” he told the crowd. “We want all sides to come together in peace and harmony. We can do it … Those engaged in the political arena must stop treating political opponents as morally defective.” But he soon reverted to a familiar scapegoat. The media, he said, has “a responsibility to set a civil tone and to stop the endless hostility and constant negative and oftentimes false attacks and stories”.

[..] Trump, who still assails Clinton at rallies while supporters chant “lock her up” two years after he defeated her, took a softer tone in Wisconsin. “Let’s get along,” he told supporters. “By the way, do you see how nice I’m behaving tonight? Have you ever seen this? We’re all behaving very well and hopefully we can keep it that way, right?” He did not mention the intended recipients of the devices by name but spoke more generally, including in language which could be taken to refer to protests against himself and allies. “No one should carelessly compare political opponents to historical villains, which is done often, it’s done all the time, got to stop. We should not mob people in public places or destroy public property. There is one way to settle our disagreements. It’s called peacefully, at the ballot box.”

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Zucker doesn’t take any responsibility for the political climate. Nor do any of the others. 24/7 blasting Trump for two years has had no influence, apparently. Someone should make a database with all Trump articles at MSM that contain positive things about Trump vs those that are negative.

CNN President Jeff Zucker Blasts Trump White House After Bomb Threat (THR)

CNN president Jeff Zucker, who has long sparred with President Donald Trump throughout their decades of knowing each other, lashed out at him in a statement on Wednesday, hours after his network’s New York office was forced to evacuate due to a bomb threat. “There is a total and complete lack of understanding at the White House about the seriousness of their continued attacks on the media,” Zucker said. “The president, and especially the White House press secretary, should understand their words matter. Thus far, they have shown no comprehension of that.”

The president has been criticized for his slow response to the bomb threat on Wednesday, initially responding only by echoing Vice President Mike Pence’s tweet condemning it. On Wednesday afternoon, Trump spoke directly at a White House event, pledging to take action. “The full weight of our government is being deployed to conduct this investigation and bring those responsible for these despicable acts to justice,” he said. “We will spare no resources or expense in this effort. In these times, we have to unify. We have to come together, and send one clear, strong unmistakable message that acts or threats of political violence of any kind have no place in the United States of America.”

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All over the world.

Dow Falls 600 Points And Wipes Out 2018 Gains (MW)

Stocks ended sharply lower Wednesday, as losses accelerated into the close and put both the Dow and the S&P 500 into the red for the year, and the Nasdaq into correction territory. Upbeat results from Boeing were credited with briefly pushing the Dow higher in early morning trading, before investors took an increasingly defensive stance, fleeing for the relative safety of utilities and consumer nondurable shares. The Dow Jones Industrial Average fell 606.11 points, or 2.4%, to 24,583.42, while The S&P 500 dropped 84.59 points, or 3.1%, to 2,656.10, it’s sixth straight losing session.

Meanwhile, the Nasdaq shed 329.14 points, or 4.4%, to 7108.4, a performance that put the index more than 10% below its Aug. 29 all-time high, meeting the widely used definition of a market correction. The loss also marked the worst day for the Nasdaq since Aug. 18, 2011. October is shaping up to be a brutal month for equities, as expected, with the S&P falling 8.9% month-to-date, the Dow down 7.1%, and the Nasdaq falling 11.7% since the start of the month. Wednesday’s session also sent the Dow into losing territory for the year, with the index down 0.6% in 2018. The blue-chip index is also down for five straight weeks, it’s longest string of weekly losses since July, 11 2008, when the market fell for six straight weeks. The S&P 500 also ended the trading day in the red, down 0.7% year-to-date.

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Broad pessimism.

Asia Pacific Shares In Freefall Amid Fears Over Global Economy (G.)

Shares in Asia Pacific have plunged into bear market territory and wiped billions off the values of companies as one analyst warned that the losses could be a harbinger of a wholesale “capitulation”. After the worst day for tech stocks on Wall Street for seven years, markets were in retreat from Sydney to Shanghai as concerns about the global economy and rising borrowing costs were compounded by local factors. In Australia the benchmark ASX200 closed down 164 points or 2.8% as it suffered its fifth straight day of losses. In Japan the Nikkei was off 3.2% and has now dropped around 13% from a 27-year peak of 24,448.07 touched in early October.

A broad indicator of shares in the region – the MSCI Asia Pacific index – has now fallen 20.3% from the year-to-date high set on 29 January, representing an official bear market. The Vix “fear” index, which measures volatility across the market, has spiked sharply this week and was up 21% overnight. “We haven’t thought that selling would be this steep. This sell-off makes us think the market may be set for capitulation,” said Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Center. The contagion looked set to continue into the European trading session with the FTSE100 expected to fall 0.65% at the open.

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Italians, Deutsche. Draghi doing a speech soon.

Value of Euro Zone Banks Drops by a Third From 2018 Peak (R.)

The value of euro zone banks have collapsed by a third since markets touched their peak at the end of January, data showed on Wednesday, as another quarter of disappointing profits at Deutsche Bank dragged the region’s sector down. European banks shares, which have never reclaimed their pre-financial crisis prices, have been the worst performing sector so far in the monetary block this year, down 26.5 percent as investors shed assets seen as most vulnerable to political upheaval. “The fall is not justified by a similar drop in earnings,” commented Farhad Moshiri, an analyst covering European banks at Alphavalue, arguing that political risk had a stronger negative impact than sector results.

Still, Deutsche’s bleak results and revenue forecast on Wednesday, which sent shares down 5 percent for their worst day since end-May, deepened the sector-wide rout. The Spring political crisis in Italy and the following on-going row with the European Commission about the country’s populist government’s budget took a heavy toll, particularly on Italian banks. The latters are heavily exposed to Italian sovereign debt, which has shed value since the country decided to raise spending and put an end to years of fiscal prudence. Slowing economic growth on the continent and elusive monetary normalization, with a first interest rate hike by the European Central Bank (ECB) still far away, also weighed on stock prices.

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A legal issue about taxes on mortgages only makes things worse.

Spain’s Mortgage Market Seizes Up, Bank Stocks Sink, Legal Uncertainty Reigns

In the last five trading days, the shares of Spain’s five largest listed banks have re-energized their plunge that had started at the end of January and now amounts to 40%. The cause for the recent drop? A shock ruling by Spain’s Supreme Court that lenders, rather than mortgage borrowers, should pay the contractual tax on mortgage loans, on the grounds that the lender is the only party with an interest in getting the loan certified by a notary, since this is what enables the bank to begin foreclosure proceedings if the borrower defaults on payments. Even the Supreme Court’s desperate decision last Friday to suspend its own ruling a day after it had announced the ruling, a historic flip-flop that left everything in limbo and its reputation in tatters, failed to stop the rout (data via YCharts):

On Monday, the Supreme Court announced that it won’t decide who has to pay the tax on mortgages — the banks or the borrowers — until November 5. In other words, there will be two more weeks of acute legal uncertainty. This has plunged Spain’s mortgage market into chaos. For years Spanish banks and builders have been desperately trying to breath new life into the market — including, in some cases, by resurrecting 100% mortgages, a high-risk instrument that helped fuel Spain’s madcap property boom. But now, thanks to the pervading legal uncertainty, the market has all but seized up. On Tuesday, sources from a number of large banks told the financial daily Cinco Dias that the only mortgages being signed are with clients who had already arranged to sign the contract before last week’s furor and who don’t mind paying the mortgage tax. “We’re not signing any new ones,” the sources said.

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Italy must insist France gets the same treatment.

It’s Not Just Italy – France’s 2019 Budget Also A Concern For Brussels (CNBC)

Markets have been on the edge regarding Italy’s future spending, but there are other countries challenging European fiscal rules. France, the second-largest economy in Europe, received a letter from Brussels last week, warning that its planned debt reduction in 2019 does not respect the proposals that Paris had agreed previously with the EU. Spain, Belgium, Portugal and Slovenia were also effectively told off by the EU. In the case of France, the 2019 budget plan sees its structural deficit (the difference between spending and revenues, excluding one-off items) falling 0.1 percent this year and 0.3 percent in 2019. Paris had agreed in April to an annual reduction of 0.6 percent of GDP for its structural deficit.

Though the tone of the warning from Brussels to Paris was softer than the tone towards Rome, the two countries have perhaps more similarities than differences. The French 2019 budget “shows that the government relies heavily on very optimistic revenues to achieve fiscal consolidation and that spending is out of control again,” Daniel Lacalle, chief economist and investment officer at Tressis Gestion, told CNBC via email. “In the case of France, it is a very difficult budget to accept by the European Commission because France has not had a balanced budget since 1974 and has missed its own deficit targets more than eleven times,” Lacalle added.

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A curious turnaround. To be continued.

Tesla Shares Soar On Surprise Third-Quarter Profit (CNBC)

Tesla shares soared by more than 12 percent after the company reported a surprise profit for the third quarter as CEO Elon Musk made good on his promise to start turning regular profits in the last half of the year. The company’s earnings report, released after the markets closed Wednesday, also showed better-than expected car sales and a faster timeline on its Model 3 production. The electric car maker said its midsize Model 3 sedan, which it hopes to produce on mass scale, was the best-selling car in the U.S. when measured by revenue and the fifth best-selling car in terms of volume. Musk told analysts on a call it was an “incredibly historic quarter” for the young car company. It was welcome news for investors following an otherwise a tumultuous few months.

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It does. Somone better get serious about this.

Airbnb Can’t Go On Unregulated – It Does Too Much Damage To Cities (G.)

Remember the “sharing economy”? That rhetoric looks more comically disingenuous than ever in light of the news that a single Airbnb user in Barcelona is managing a portfolio of properties that brings in an eye-watering £33,000 a day in high season. Old neighbourhoods are being overrun with short-term tourists and shops selling souvenir tat. Rents for residents are being driven up, in Barcelona as well as Berlin, New York and elsewhere. Airbnb is a parasitic monster that squats over cities and hoovers up vast sums of money through its slimy proboscis. So what can be done?

Airbnb, short for “airbed and breakfast”, originally sold itself as a way for travellers to stay in people’s spare rooms and get an authentic feel of a foreign culture. This friendly idea is still present in the company’s vocabulary – “hosts”, not landlords, and “hospitality” in place of “business” – even though the vast majority of its listings are now for self-contained apartments or houses. In Barcelona, it used to cost €250 (£221) for a short-term rental permit. Now that such permits are no longer being issued, they change hands for up to €80,000. It’s “sharing” for the rich, maybe, but not for the rest of us.

During their early rapid growth, sharing economy companies started operations around the world without regard to local laws on the basis that existing regulations had not envisaged the radical and disruptive new ideas they embodied. But the tide slowly turned as the whizzy tech rhetoric wore off and it became clear that Uber was in fact a taxi company and Airbnb was in effect a hotel business.

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Don’t like Verhofstadt, but it’s time for honesty.

Brexit Deal ‘Progress Is At 0%’ Until Irish Border Solved – Verhofstadt (Ind.)

The European Parliament’s Brexit coordinator has rejected Theresa May’s suggestion that a deal is “95 per cent done”, as Brussels warned it will not be bounced into an agreement. Guy Verhofstadt said the withdrawal agreement needed to prevent no deal was “0 per cent done” as far as MEPs were concerned, because of the lack of a solution to the Irish border issue. “Progress on the Brexit negotiations can be 90 per cent, 95 per cent or even 99 per cent,” Mr Verhofstadt said. “But as long as there is no solution for the Irish border, as long as the Good Friday agreement is not fully secured, for us in our parliament progress is 0 per cent.”

The European Parliament has a veto on the final Brexit deal and has said it would kill any agreement that does not prevent a hard border between Ireland and Northern Ireland. Speaking in a debate at the parliament’s Strasbourg seat on Wednesday morning, the second in command of the European Commission Frans Timmermans also warned that the block would not “rush a deal through at the expense of our principles”. “As was clear after the European Council the bottom line is that we do not have the decisive progress that we need,” Jean-Claude Juncker’s deputy said. “The good will and the determination to find a deal as soon as possible are there. But it is also clear that we will not rush a deal through at the expense of our principles or our agreed commitments, most notably on the Irish border question.

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Watch the pound when she makes it official.

May Sets November Date To Trigger No-Deal Brexit Preparations (G.)

Theresa May has set a date for Whitehall to trigger a series of no-deal Brexit preparations as her government faces up to the possibility that there will be no agreement with the EU about Britain’s departure. With less than six months to go before the UK leaves the bloc, the cabinet has agreed that a flurry of activity will be triggered in the second week of November as the government prepares to crash out of the EU, informed sources said. Civil servants have also accelerated plans to lay down new laws and secondary legislation so that UK businesses and both British and EU citizens can prepare. The move follows concerns across government that preparations for how the UK might cope with crashing out the EU are still uncertain.

The Brexit secretary, Dominic Raab, told cabinet colleagues on Tuesday that Whitehall departments needed to step up their efforts next month and move “from warning businesses to telling them to act”. Whitehall has until now concentrated on the publication of more than 100 technical notices detailing the potential impact on particular industries but not on individual businesses and people. A source said that there would be an acceleration of preparations after MPs return from a short break on 12 November. “We have to get on with no-deal legislation. At the moment, we’re looking at the same legislation for a deal as no deal. In the case of no deal it would need royal assent before we leave. “There will be an awful lot to discuss. It will concentrate minds. Obviously we don’t want to upset the negotiations, but the clock is ticking and it will get harder and harder the later we leave it,” the source said.

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This is Theresa May’s country, her accomplishment.

Disadvantaged Groups Trapped In Poverty And Excluded From UK Society (Ind.)

Britain is a divided nation as the poor are increasingly trapped in poverty and excluded from mainstream society because of their social status, the human rights watchdog has warned. A major report from the Equality and Human Rights Commission (EHRC) found a continued decline in prospects for disadvantaged groups has cemented a “two-speed society” in the UK which leaves many behind. The watchdog found that in just three years “alarming backward steps” have left disabled people, ethnic minorities and children from poorer backgrounds struggling to make headway in a society where “significant barriers still remain”.

Charities accused Theresa May of breaking the promise she made in her first speech as prime minister to tackle “burning injustices” in British society. It comes just days before Philip Hammond, the chancellor, is to set out a budget with critics waiting for spending commitments that will deliver on the prime minister’s conference promise that austerity is finally coming to an end. In a speech on Thursday, shadow chancellor John McDonnell will say that schools, councils and the UK’s social care system are “crying out for investment” and called on the government to “stump up the cash”. David Isaac, chair of the EHRC, said Britain was facing a “defining moment in the pursuit of equality”.

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Stop using pesticides altogether.

Ban Entire Pesticide Class To Protect Children’s Health – Experts (G.)

Evidence that an entire class of pesticides threatens the health of children and pregnant women is now so arresting that the substances should be banned, an expert panel of toxicologists has said. Exposure to organophosphates (OPs) increases the risk of reduced IQs, memory and attention deficits, and autism for prenatal children, according to the paper, published in Plos Medicine. More than 10,000 tonnes of OP pesticides are sprayed in 24 European countries each year and usage is higher in the US, where the Trump administration is appealing against a federal court ban on chlorpyrifos, one of the most popular agricultural insecticides.

Irva Hertz-Picciotto, the paper’s lead author and director of the UC Davis environmental health sciences centre, said: “We have compelling evidence from dozens of human studies that exposures of pregnant women to very low levels of organophosphate pesticides put children and foetuses at risk for developmental problems that may last a lifetime. By law, the EPA cannot ignore such clear findings: It’s time for a ban not just on chlorpyrifos, but all organophosphate pesticides.” The meta-review of data and literature on OPs analysed and cross-referenced scores of reviews and epidemiological studies with a UN database that covers 71 countries, and other research material.

In the process, the scientists discovered that US regulators had already quietly banned 26 out of 40 OP pesticides considered hazardous to human health. In Europe, the figure was 33 out of 39. However, 200,000 people still die each year from pesticide poisonings, according to UN estimates, about 99% of them in the developing world. A further 110,000 suicides using pesticides take place each year.

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Not bad, but too late.

European Parliament Votes To Ban Single-Use Plastics (Ind.)

Fragments of plastic have been found everywhere from Arctic sea ice to fertilisers being applied to farmland. Animals as small as plankton and as large as whales are known to eat plastic, and as tiny shards enter the human food chain they seem to be ending up inside humans as well. While much still remains unknown about the impact plastic is having on the environment and human health, environmentalists have called for urgent measures from industry and governments to curb the flow of plastic. “We have adopted the most ambitious legislation against single-use plastics. It is up to us now to stay the course in the upcoming negotiations with the council, due to start as early as November,” said Belgian liberal Frederique Ries, who was responsible for the bill.

Under the new rules, member states would have to ensure that tobacco companies cover the cost of cigarette butt collection and processing in a bid to reduce the number entering the environment by 80 per cent in the next 12 years. Similar measures would apply to producers of fishing gear, who would have to help ensure at least 50 per cent of lost or abandoned fishing gear containing plastic is collected per year. Fishing gear accounts for over a quarter of waste found on Europe’s beaches, and “ghost fishing” is thought to be responsible for thousands of whales, seals and birds dying every year. EU states would also be obliged to recycle 90 per cent of plastic bottles by 2025, and producers would have to help cover costs of waste management.

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But they don’t mean sailing ships.

Humpback Whales Stop Singing When Ships Are Near (AFP)

Humpback whales are famous for their eerie, underwater songs. But researchers in Japan said Wednesday these massive marine creatures stop singing, at least temporarily, when human-driven ships are nearby. Researchers focused on the remote Ogasawara Islands in Japan, some 620 miles (1,000 kilometers) south of Tokyo, where a single passenger-cargo liner passed through the area once per day. Male humpback whales sing as a way to communicate and attract mates. But by plunging a pair of hydrophones into the water to listen to the whales’ reaction — about 26 of whom were detected in the study area — researchers found that the approach of a ship silenced them.

“The main reaction of humpback whales was to stop singing either when the ship approached or after it passed by,” said the study in the journal PLOS ONE, led by Koki Tsujii from Ogasawara Whale Watching Association and Hokkaido University. Fewer male humpbacks sang in the area within 500 yards (meters) of the shipping lane than elsewhere. “After the ship passed by, whales within around 1,200 meters tended to temporarily reduce singing or stop singing altogether,” said the study. Many whales did not start to sing again until a half hour after the ship was gone from the area. Since ocean noise has been on the rise in recent decades, some experts said the findings raise new questions about what other whale behaviors might be changing due to mounting human presence on the high seas.

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Oct 232018
 
 October 23, 2018  Posted by at 9:02 am Finance Tagged with: , , , , , , , , , , , ,  


Pablo Picasso Still life 1918

 

Turkey Yet To Share Information On Khashoggi Case With Any Country: FM (R.)
Erdogan To Reveal ‘Naked Truth’ About Khashoggi’s Death (G.)
Turkey Believes MBS Bodyguard Took Khashoggi Body Part To Riyadh (MEE)
Khashoggi Case Has Put Saudi Prince Right Where Erdogan Wants Him (G.)
The Real Reason They Hate Trump (Gelernter)
Twitter Removes More Accounts Affiliated With Infowars (R.)
Facebook And Google Are Run By Today’s Robber Barons. Break Them Up (G.)
EU Regulation Could End YouTube As We Know It, CEO Warns (RT)
By Going Nuclear the EU Has Already Lost Its Battle with Italy (Luongo)
US Judge Affirms Monsanto Weed-Killer Verdict, Slashes Damages
Pesticide-Free Organic Food Lowers Your Blood Cancer Risk By 86% (DM)
Plastic Found In Faeces Of Everyone Who Took Part In Europe-Wide Study (Ind.)

 

 

Timing’s a bit weird. As Erdogan prepares his speech fior noon local time (5am EDT), I’m doing this with what may soon be old news. Trump flew CIA head Gina Haspel to Ankara overnight, did she convince Erdogan not to talk?

Turkey Yet To Share Information On Khashoggi Case With Any Country: FM (R.)

Turkey has not yet shared any information with any country from its probe into the killing of Jamal Khashoggi, the foreign minister said on Tuesday, hours before President Tayyip Erdogan was due to reveal what he has said were details in the case. Mevlut Cavusoglu made the comment in a televised interview with the state-run Anadolu news agency. Cavusoglu also said that Turkey is ready cooperate with any international investigation into Khashoggi’s killing. Authorities have been investigating Khashoggi’s disappearance after he entered the consulate on Oct. 2. After weeks of denial, Saudi Arabia at the weekend said the journalist had been killed at the consulate. Erdogan has said that he would share the information of the investigation in a speech on Tuesday.

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Or so he says.

Erdogan To Reveal ‘Naked Truth’ About Khashoggi’s Death (G.)

Recep Tayyip Erdogan appears primed to assemble two weeks of leaks, insinuation and police evidence in an explosive speech in the Turkish parliament on Tuesday alleging that the Saudi Arabian government murdered the Washington Post journalist Jamal Khashoggi on Turkish soil. After weeks of leaks by Turkish police implying that the Saudi crown prince, Mohammed bin Salman, must have known of a premeditated murder, there was no last-minute sign that the Turkish president would hold back from revealing what he has described as the “naked truth” about Khashoggi’s death. On Monday an aide vowed: “Nothing will remain secret.” Erdogan’s statement to members of his AK party coincides with the opening by the crown prince himself of an investment conference in Riyadh. Aides say Erdogan will address Saudi Arabia’s belated admission that Khashoggi died inside the Saudi consulate, where he was last seen on 2 October.

[..] Erdogan also has the chance in his speech to reveal details of an audio recording that purportedly exists of the moments of Khashoggi’s death and dismemberment. Reports on Monday suggested Saud al-Qahtani, an influential adviser to crown prince Mohammed bin Salman, participated in a Skype call to the room in the consulate where Khashoggi was held. A Turkish intelligence source told Reuters that at one point Qahtani told his men to dispose of Khashoggi. “Bring me the head of the dog,” he said. If true, the allegations would confirm reporting in the Guardian on Sunday that Turkey had intercepted the hit squad’s communications.

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The info drip-drip continues to the last minute.

Turkey Believes MBS Bodyguard Took Khashoggi Body Part To Riyadh (MEE)

Turkish authorities believe part of Jamal Khashoggi’s body was transported out of Turkey by one of Saudi Crown Prince Mohammed bin Salman’s bodyguards, sources have told Middle East Eye. Maher Abdulaziz Mutrib, an intelligence officer implicated in the killing of the Saudi journalist, is thought to have taken the body part out in a large bag, the sources said. Mutrib, who is often seen travelling with the heir to the Saudi throne, left Istanbul on 2 October, the day of Khashoggi’s death, on a private jet that departed at 18:20 local time. His bags were not checked as he passed through the VIP lounge at Ataturk airport and neither was the plane, with tail registration HZ-SK1.

This was because the plane left before the alarm was raised. A second plane was searched from top to bottom and nothing was found, according to the sources. Mutrib, who carried a diplomatic passport, appeared to be in a hurry, they said. Turkish President Recep Tayyip Erdogan vowed on Sunday to reveal the “naked truth” over the killing of Khashoggi, saying that he would make a new statement on the case on Tuesday. “We are looking for justice here and this will be revealed in all its naked truth, not through some ordinary steps but in all its naked truth,” Erdogan told a rally in Istanbul.

Erdogan held a phone call with US President Donald Trump on Sunday where the two leaders agreed the Khashoggi case needed to be clarified “in all its aspects,” a Turkish presidential source said. Saudi Arabia, which on Friday finally admitted after 17 days that its officials had killed Khashoggi, says it does not know the body’s whereabouts. Anonymous Saudi officials have told media that the body was rolled into a carpet and handed to a “local collaborator” to be disposed of. However, on Sunday a Turkish source told MEE that Khashoggi’s body was cut into 15 pieces. “They did not roll anything up in anything,” the source said.

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Lots of theories. This one’s an option.

Khashoggi Case Has Put Saudi Prince Right Where Erdogan Wants Him (G.)

At about noon on Tuesday two regional leaders are due to make landmark addresses. In Riyadh, the de facto ruler of Saudi Arabia, Mohammed bin Salman, will open an investment showpiece declaring the kingdom open for business. In Ankara, the Turkish president, Recep Tayyip Erdogan, is expected to make a speech that may well shut down the beleaguered kingdom. Such are the stakes when Erdogan takes to a podium to discuss the death of the Saudi dissident Jamal Khashoggi that the region may not be the same when he’s finished. Three weeks to the day since Khashoggi vanished after entering the Saudi consulate in Istanbul, Erdogan has pledged to table the “naked truth” about what happened to the columnist and critic, whose fate continues to grip both countries and polarise the Middle East.

If he stays true to his pledge, much of the evidence that Turkey has gathered, incriminating Saudi Arabia in a plot to kill Khashoggi, will be revealed: in pictures, video and even bloodcurdling audio said to document his torture and death. Setting the scene on Monday, a spokesman for the ruling party for the first time described Khashoggi’s death as a “complicated murder” that was “monstrously planned”. [..] Erdogan has the Saudis – in particular, the crown prince, Mohammed bin Salman (AKA MbS) – right where he wants him. Out of crisis has come opportunity for the veteran Turkish leader, who has never warmed to the brash 33-year-old, and thinks even less of his regional allies.

The two men have vastly different visions for the future of the region: Erdogan has been a champion of political Islam both at home and abroad, particularly since the rise and fall of Mohamed Morsi, the ill-fated former president of Egypt who hailed from the Muslim Brotherhood. The Turkish president has partnered with Qatar, Riyadh’s regional foe, given shelter to those exiled after Morsi fell, and remained a bulwark for a movement that Riyadh and its ally the United Arab Emirates see as existential threats. But he has remained on the losing end of the struggle for regional power and influence.

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Not entirely my view, but good bits for sure.

The Real Reason They Hate Trump (Gelernter)

He’s the average American in exaggerated form—blunt, simple, willing to fight, mistrustful of intellectuals. Every big U.S. election is interesting, but the coming midterms are fascinating for a reason most commentators forget to mention: The Democrats have no issues. The economy is booming and America’s international position is strong. In foreign affairs, the U.S. has remembered in the nick of time what Machiavelli advised princes five centuries ago: Don’t seek to be loved, seek to be feared. The contrast with the Obama years must be painful for any honest leftist. For future generations, the Kavanaugh fight will stand as a marker of the Democratic Party’s intellectual bankruptcy, the flashing red light on the dashboard that says “Empty.” The left is beaten.

This has happened before, in the 1980s and ’90s and early 2000s, but then the financial crisis arrived to save liberalism from certain destruction. Today leftists pray that Robert Mueller will put on his Superman outfit and save them again. For now, though, the left’s only issue is “We hate Trump.” This is an instructive hatred, because what the left hates about Donald Trump is precisely what it hates about America. The implications are important, and painful. Not that every leftist hates America. But the leftists I know do hate Mr. Trump’s vulgarity, his unwillingness to walk away from a fight, his bluntness, his certainty that America is exceptional, his mistrust of intellectuals, his love of simple ideas that work, and his refusal to believe that men and women are interchangeable.

Worst of all, he has no ideology except getting the job done. His goals are to do the task before him, not be pushed around, and otherwise to enjoy life. In short, he is a typical American—except exaggerated, because he has no constraints to cramp his style except the ones he himself invents. Mr. Trump lacks constraints because he is filthy rich and always has been and, unlike other rich men, he revels in wealth and feels no need to apologize—ever. He never learned to keep his real opinions to himself because he never had to. He never learned to be embarrassed that he is male, with ordinary male proclivities. Sometimes he has treated women disgracefully, for which Americans, left and right, are ashamed of him—as they are of JFK and Bill Clinton.

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On what authority? Jones must sue Jack.

Twitter Removes More Accounts Affiliated With Infowars (R.)

Twitter Inc confirmed on Monday it has removed more accounts affiliated with Infowars, the website of U.S. conspiracy theorist Alex Jones. The company confirmed a CNN report, which said Twitter permanently suspended 18 accounts, partly because of their attempts to help Infowars and Jones circumvent the ban placed on them by Twitter in September. Last month, Twitter permanently banned Jones and Infowars from its platform, saying in a tweet that the accounts had violated its behavior policies. Twitter had said back then that it would evaluate any reports regarding other accounts potentially associated with Jones and Infowars. Tech companies like Apple, Google parent Alphabet and Facebook have also recently banned Infowars and content produced by Jones while payments processor PayPal had ended its business relationship with the website in September.

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The idea is better than the article.

Facebook And Google Are Run By Today’s Robber Barons. Break Them Up (G.)

If Tom Wolfe were still alive, he might be turning his critical pen towards people like Facebook’s Mark Zuckerberg or the Uber co-founder Travis Kalanick, playfully describing the disruption that their companies bring to our lives on a daily basis. Just as Wolfe’s novel The Bonfire of the Vanities focused on the financiers whose greed defined the economy of the 1980s, the writer might today focus on the behaviour of these entrepreneurs whose technological innovations are overthrowing the old economy, creating entirely new digital marketplaces. And rather than the greed of the 1980s, ethics might be the focus of Wolfe’s attention. Not the ethics of the algorithms running these businesses, for algorithms don’t have ethics. Even smart algorithms don’t have ethics.

Algorithms are just bits of mathematics. Algorithms do, however, capture the ethics of the people behind them. And there is so much material Wolfe could write about this in 2018. Wind back the clock nearly two years. In October 2016, the investigative nonprofit newsroom ProPublica discovered that Facebook let advertisers exclude black, Hispanic and other “ethnic affinities” from seeing adverts. In the United States, housing and job adverts that exclude people based on race, gender and similar factors are prohibited by the Fair Housing Act of 1968 and the Civil Rights Act of 1964. Facebook admitted this was “a failure” and promised to prevent such discrimination in the future. More than a year later, in November 2017, ProPublica found Facebook was still allowing such adverts to be placed.

[..] This isn’t the first time we’ve faced such problems. In the first industrial revolution, some of the first to benefit were so rapacious they became known as the “Robber Barons”. Chief among them was the industrialist John D Rockefeller, arguably the wealthiest man to live in modern times. Rockefeller was notorious for the unethical and illegal business practices that helped his company Standard Oil control up to 90% of the world’s oil refineries. The History of the Standard Oil Company, published by Ida Tarbell in 1904, described the espionage, price wars and courtroom antics that allowed the company to dominate the oil business. Eventually Standard Oil became so powerful it had to be broken up into 34 new companies.


John D Rockefeller (left). Photograph: Keystone-France/Gamma-Keystone via Getty Images

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The EU doesn’t understand what the internet is, how it has changed news and info dissemination. They don’t understand the amount of information, and how it necessitates changes. They’re handing the internet to America and taking it away from their own citizens.

EU Regulation Could End YouTube As We Know It, CEO Warns (RT)

YouTube’s CEO has urged creators on the popular video site to organize against a proposed EU internet regulation, reinforcing fears that the infamous Article 13 could lead to content-killing, meme-maiming restrictions on the web. The proposed amendments to the EU Copyright Directive would require the automatic removal of any user-created content suspected of violating intellectual property law – with platforms being liable for any alleged copyright infringement. If enacted, the legislation would threaten “both your livelihood and your ability to share your voice with the world,” YouTube CEO Susan Wojcicki warned the site’s content creators in a blog post on Monday.

The regulation would endanger “hundreds of thousands of job,” Wojcicki said, predicting that it would likely force platforms such as YouTube to allow only content from a hand-picked group of companies. “It would be too risky for platforms to host content from smaller original content creators, because the platforms would now be directly liable for that content,” Wojcicki wrote. While acknowledging that it was important to properly compensate all rights holders, the YouTube chief lamented that the “unintended consequences of Article 13 will put this ecosystem at risk.” She encouraged YouTubers to use the #SaveYourInternet hashtag to tell the world how the proposed legislation would impact them personally.

[..] The proposal has stirred considerable controversy in Europe and abroad, with critics claiming that the legislation would essentially ban any kind of creative content, ranging from memes to parody videos, that would normally fall under fair use. Alphabet, the parent company of Google and YouTube, has opposed Article 13 for months. The measure was advanced in June by the European Parliament. A final vote on the proposed regulation is expected to take place sometime next year. World Wide Web inventor Tim Berners-Lee and Wikipedia founder Jimmy Wales have also spoken out against Article 13.

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Playing hardball is all Brussels knows how to do.

By Going Nuclear the EU Has Already Lost Its Battle with Italy (Luongo)

Former Dutch Minister of Finance and former President of the Eurogroup, Jeroen Dijsselbloem, went on CNBC on Friday to declare all-out financial war on Italy. That’s the way Zerohedge put it. As a ‘former’ big wig it was his job to go out and state the position of those currently in power who can safely hide behind his words. And if you watch the clip from CNBC in the linked article you’ll note that CNBC excised the most important quotes, where Dijsselbloem threatened the Italians that no exit from the euro is on the table. But, why would he say this when Italy hasn’t brought it up at all? In fact, Italy’s leadership has been nothing but supportive of the European Project while standing firm on it adopting fairer rules for member countries.

[..] As always, the heavy-handed Djisselbloem has his thumb on the pulse of the EU’s problems, opening his mouth and making things worse, just like he did with Greece. In Greek negotiations, the EU was calm. It told Greece over and over, “No.” Greece threatened the nuclear option, leaving the euro and its bluff was called. So, Dijesselbloem’s warning is just like Greece’s threats and they are going nuclear on Italy. They have to. The EU has zero leverage over Italy. The so-called populists in charge in Italy know exactly what they are doing. They are killing the EU with kindness. Five Star Movement leader Luigi Di Maio reiterated over the weekend that there is “no Plan B” for leaving the EU. The goal is to reform it from within.

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Nice, but as teh Guardian adds: “The judge said in her ruling Monday that if Johnson did not accept the lower punitive damages, she would order a new trial for Monsanto.”

US Judge Affirms Monsanto Weed-Killer Verdict, Slashes Damages (R.)

A U.S. judge on Monday affirmed a verdict against Bayer unit Monsanto that found its glyphosate-based weed-killers responsible for a man’s terminal cancer, but said the $250 million punitive damages portion of the award had to be reduced. According to a ruling in San Francisco’s Superior Court of California, Judge Suzanne Bolanos said she would slash the punitive damages award to $39 million if lawyers for school groundskeeper Dewayne Johnson agreed. Monsanto, which denies the allegations, had asked the judge to throw out the entire original $289 million verdict or order a new trial on the punitive damages portion. A jury on Aug. 10 found the company’s glyphosate-based weed-killers, including RoundUp and Ranger Pro, had caused Johnson’s cancer and that the company failed to warn consumers about the risks.

The verdict wiped 10 percent off the value of the company and marked the first such decision against Monsanto, which faces more than 8,000 similar lawsuits in the United States. “The court’s decision to reduce the punitive damage award by more than $200 million is a step in the right direction, but we continue to believe that the liability verdict and damage awards are not supported by the evidence at trial or the law and plan to file an appeal with the California Court of Appeal,” Bayer said in a statement. [..] Lawyers for Johnson in a statement on Monday said they were still reviewing whether to accept the reduced award or retry the punitive damages portion. “The evidence presented to this jury was, quite frankly, overwhelming,” the lawyers said.

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But we’re still going to poison most of our food, and that of others?

Pesticide-Free Organic Food Lowers Your Blood Cancer Risk By 86% (DM)

Cutting out pesticides by eating only organic food could slash your cancer risk by up to 86 percent, a new study claims. The biggest impact was seen on non-Hodgkin’s lymphoma risk, which plummeted among those who shunned chemical-sprayed food, according to the survey of nearly 70,000 French adults. Overall, organic eaters were 25 percent less likely to develop any cancer, and their risks of skin and breast cancers dropped by a third. The finding comes amid a flurry of interest in the cancer risks of pesticides, spurred by this summer’s Monsanto trial, when a jury awarded a cancer-suffering groundsman $250 million after concluding that Roundup weedkiller caused his cancer. The health benefit was far greater for obese people, they found.

However, the diet had no significant effect on bowel cancer – which is soaring in numbers globally – or prostate cancer. ‘Our results indicate that higher organic food consumption is associated with a reduction in the risk of overall cancer,’ lead author Dr Julia Baudry of the Centre of Research in Epidemiology and Statistics Sorbonne, Paris said. ‘We observed reduced risks for specific cancer sites – postmenopausal breast cancer, non-Hodgkin’s lymphoma, and all lymphomas – among individuals with a higher frequency of organic food consumption. ‘Although our findings need to be confirmed, promoting organic food consumption in the general population could be a promising preventive strategy against cancer.’

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By the time we acknowledge how bad this is, we’ll be full of plastic already.

Plastic Found In Faeces Of Everyone Who Took Part In Europe-Wide Study (Ind.)

Scientists have discovered up to nine different types of plastic in the faeces of every person who took part in a Europe-wide study. On average, researchers found 20 microplastic particles in every 10 grams of stool, suggesting humans are swallowing them in food. Particles between 50 and 500 micrometres across were found, the most common being polypropylene (PP) and polyethylene terephthalate (PET). Diaries kept by each participant in the week before the stool tests showed that they were all exposed to plastic by consuming plastic-wrapped food or drinking from plastic bottles. Plastic in the gut could suppress the immune system and aid transmission of toxins and harmful bugs or viruses, experts believe.

Lead researcher Dr Philipp Schwabi, from the Medical University of Vienna in Austria, said: “Of particular concern is what this means to us, and especially patients with gastrointestinal diseases. “While the highest plastic concentrations in animal studies have been found in the gut, the smallest microplastic particles are capable of entering the blood stream, lymphatic system and may even reach the liver. “Now that we have first evidence for microplastics inside humans, we need further research to understand what this means for human health.” The pilot study recruited eight participants from the UK, Finland, Italy, the Netherlands, Poland, Russia and Austria. None were vegetarians, and six ate sea fish. It is estimated up to 5 per cent of all plastics produced end up in the sea.

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Oct 192018
 
 October 19, 2018  Posted by at 9:12 am Finance Tagged with: , , , , , , , , , ,  


Paul Gauguin Horsemen on the beach 1902

 

Implosion of Stock Market Double-Bubble in China Hits New Lows (WS)
Trump Trade War Forces Beijing To Retreat From Its Anti-Debt Battle (CNBC)
Italy’s Debt Crisis Thickens (DQ)
Italian Bond Yields Spike To 4-Year Highs As EU Slams New Budget Plan (CNBC)
EU Leaders Ready To Help May Sell Brexit Deal To Parliament (G.)
Tory MP Calls UK Government ‘A Shitshow’ (Ind.)
Greens Surge Across Europe As Centre-Left Flounders (G.)
Male Birds Can Be Good Singers Or Good Looking, But Not Both (NS)
Jurors Urge Judge To Uphold Monsanto Cancer Ruling (G.)
World’s Smallest Porpoise Faces Extinction (AFP)
Microplastics Found In 90% Of Table Salt (NatGeo)

 

 

Tomorrow is a travel day, no posts.

 

 

Up a bit this morning, plunge protection, but Shanghai down 30% for the year. Stocks are not Xi’s worst fear, though, the housing market is, along with debt. And you wonder how this is possible with all the GDP growth numbers.

Implosion of Stock Market Double-Bubble in China Hits New Lows (WS)

Today, the Shanghai Composite Index dropped another 2.9% to 2,486.42. In the bigger picture, that’s quite an accomplishment:

• Lowest since November 27, 2014, nearly four years ago
• Down 30% from its recent peak on January 24, 2018, (3,559.47)
• Down 52% from its last bubble peak on June 12, 2015 (5,166)
• Down 59% from its all-time bubble peak on October 16, 2007 (6,092)
• And back where it had first been on December 27, 2006, nearly 12 years ago.

The chart of the Shanghai Stock Exchange Composite Index (SSE) shows the 2015-bubble and its implosion, followed by a rise from the January-2016 low, which had been endlessly touted in the US as the next big buying opportunity to lure US investors into the China miracle. Investors who swallowed this hype got crushed again:

Over the longer view, the implosion is even more spectacular. Today’s close puts the SSE back where it had first been nearly 12 years ago, on December 27, 2007. This dynamic has created a double-bubble and a double-implosion, with every recovery rally in between getting finally wiped out. The index is now down 59% from its all-time high in October 2007, the super-hype era in the run-up to the Beijing Olympics. It is not often that a stock market of one of the largest economies in the world is whipped into two frenetically majestic bubbles that implode back to levels first seen 12 years earlier – despite inflation in the currency in which these stocks are denominated.

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Betcha China’s foreign reserves are dwindling.

Trump Trade War Forces Beijing To Retreat From Its Anti-Debt Battle (CNBC)

Just as China started to come to grips with the scale of its massive debt accumulation, the impact of the trade war with the U.S. is forcing a retreat. One expert said that could prove “disastrous” for the country’s economy. Years of big-ticket investment projects helped spur double-digit growth in China’s GDP, sending the country into position as the world’s second-largest economy — trailing only the United States. The price tag, however, was a mountain of debt that needed to be drawn down as authorities refashioned growth to a more sustainable model. The plan has been to base the more mature economy on the increasing spending power of China’s rising consumer class rather than old-fashioned investments in infrastructure.

But the trade war is denting China’s economic growth and forcing a rethink in debt reduction — known as deleveraging — as authorities look for ways to juice the economy to make up for hits resulting from U.S. President Donald Trump’s tariffs on Chinese exports. Economists increasingly see future tariffs as likely to apply to all shipments from China to the United States, meaning Beijing is set to even further loosen financial taps. That’s already been seen in the form of cuts to reserve requirement ratios for banks, which set the amount of funds they must keep on hand. The recent moves mean banks have more money to lend out, stimulating the economy with more debt.

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To what extent is this Brussels teaching Rome a lesson?

Italy’s Debt Crisis Thickens (DQ)

Italy’s government bonds are sinking and their yields are spiking. There are plenty of reasons, including possible downgrades by Moody’s and/or Standard and Poor’s later this month. If it is a one-notch downgrade, Italy’s credit rating will be one notch above junk. If it is a two-notch down-grade, as some are fearing, Italy’s credit rating will be junk. That the Italian government remains stuck on its deficit-busting budget, which will almost certainly be rejected by the European Commission, is not helpful either. Today, the 10-year yield jumped nearly 20 basis points to 3.74%, the highest since February 2014. Note that the ECB’s policy rate is still negative -0.4%:

But the current crisis has shown little sign of infecting other large Euro Zone economies. Greek banks may be sinking in unison, their shares down well over 50% since August despite being given a clean bill of health just months earlier by the ECB, but Greece is no longer systemically important and its banks have been zombies for years. Far more important are Germany, France and Spain — and their credit markets have resisted contagion. A good indicator of this is the spread between Spanish and Italian 10-year bonds, which climbed to 2.08 percentage points last week, its highest level since December 1997, before easing back to 1.88 percentage points this week.

Much to the dismay of Italy’s struggling banks, the Italian government has also unveiled plans to tighten tax rules on banks’ sales of bad loans in a bid to raise additional revenues. The proposed measures would further erode the banks’ already flimsy capital buffers and hurt their already scarce cash reserves. And ominous signs are piling up that a run on large bank deposits in Italy may have already begun.

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So far the government is sticking to its plans.

Italian Bond Yields Spike To 4-Year Highs As EU Slams New Budget Plan (CNBC)

Italian sovereign debt yields hit fresh multi-year highs Friday morning, as investors grow cautious over lending to the embattled government after it unveiled new budget plans. Ten-year and 30-year bond yields — yields have an inverse relationship to a bond’s price — hit their highest levels since early 2014, according to Reuters, just hours after the European Union warned of rule breaches in Italy’s draft budget. Investors have shown concerns over Italy’s 2019 budget, which was officially sent to the EU this week for analysis. The anti-establishment and partly right-wing government in Italy plans to increase public spending in the country, sticking with campaign pledges before the general election in March this year.

There are strong concerns that the fiscal plan will derail the reduction of the country’s debt pile — which is the second largest in the euro zone, totaling 2.3 trillion euros ($2.6 trillion). Italy’s prime minister has defended its free-spending budget this week, after officials in Brussels criticized the plans and labelled it an unprecedented breach of the EU’s budgetary rules.

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Picked up the graph apart from the article. It says exactly why there won’t be a deal: it’s not possible.

EU Leaders Ready To Help May Sell Brexit Deal To Parliament (G.)

EU leaders are preparing to back Theresa May in building a “coalition of the reasonable” in the UK parliament, in a desperate bid to avoid a no-deal Brexit. Following what has been described by diplomats as a “call for help” by the prime minister at a crunch summit in Brussels, the German chancellor, Angela Merkel, stressed that the EU had to pursue “all avenues” to find a deal that can get through the Commons.“I think where there is a will there is a way,” she said. Jean-Claude Juncker, the European commission president, said: “It will be done.” He is understood to have told EU leaders that May needed “help” to sell a deal in parliament.

While ruling out major concessions, Emmanuel Macron, the French president, said it was clear that the roadblock to a deal did not lie in Brussels. A potential agreement had been derailed on Sunday when Dominic Raab, the Brexit secretary, made an unscheduled visit to Brussels to inform the EU’s chief negotiator, Michel Barnier, that May could not get an agreement past her cabinet or the DUP, on whose votes her government relies.

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A bit of honesty.

Tory MP Calls UK Government ‘A Shitshow’ (Ind.)

A Tory MP has labelled the government “a shitshow” and said he would not vote Conservative. Johnny Mercer, a former army officer, claimed his party was being run by “technocrats and managers” and labelled Theresa May’s Brexit plan a sign of a “classic professional politician”. He vowed to launch a “serious shit-fight” to stop the UK heading “towards the edge of the cliff”. The Plymouth Moor View MP launched the astonishing attack on his own party as he voiced concerns that it no longer shared his values. He told The House magazine: “The party will never really change until you have somebody who is leading the party who has won a seat and knows what it’s like to go out every weekend and advocate for what you just voted for that week.

“We’ve lost this ability to fight, to scrap for what we believe in. Until we get that art back – ultimately our core business as politicians is winning elections. That is our basic core business. “We’ve lost focus on that for some very good, very capable but ultimately technocrats and managers. That’s not what Britain’s about.” [..] in a shock admission, he said that, were he not an MP, he would not vote for the Conservatives. Asked how the Johnny Mercer who left the military in 2012 would vote now, he said: “I wouldn’t go and vote. “Just being honest, I wouldn’t vote. Of course I wouldn’t, no.” He added: “There’s no doubt about it that my set of values and ethos, I was comfortable that it was aligned with the Conservative Party. I’m not as comfortable that that’s the case any more.”

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The political center vanishes everywhere.

Greens Surge Across Europe As Centre-Left Flounders (G.)

In conservative Bavaria, the Greens doubled their vote in state elections to become the second largest party. In Belgium’s local elections they achieved record scores of more than 30% and finished first in several Brussels districts, and runners-up overall. In Luxembourg’s general election they increased their tally of MPs by 50%. The elections in three countries last weekend suggest that as Europe’s historic mainstream parties plummet in the polls and struggle to see off the far right’s challenge, for liberal-minded voters the Greens look like an answer. Offering a pro-EU stance, a humane approach to migration and clear positions on issues such as climate change, biodiversity and sustainability, Green parties in several countries are now polling higher nationally than the traditional centre-left.

“They represent a clear place where people can go who are frustrated with the traditional mainstream parties but who don’t like the far right,” said Alexander Clarkson, a lecturer in European studies at King’s College London. “They offer a very clear counter-model to the positions and arguments of parties like Germany’s AfD. Also they’ve been around for a while now, more than 40 years, and they’ve governed responsibly both locally and regionally. They kind of look like the adults in the room.”

In Germany, where the Greens partner parties from the centre-right to the hard-left in nine of the 16 state governments, recent national polling put the party ahead of the centre-left SPD, Angela Merkel’s coalition partner, with a 17%-plus share of the vote, compared with 8.9% in last year’s federal election. In the Netherlands, the GreenLeft party boosted its representation from four to 14 MPs in elections last year and has advance further since then, from 9% to a second-placed 18% in the polls.

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Fun research.

Male Birds Can Be Good Singers Or Good Looking, But Not Both (NS)

The call of a male peacock is no pleasure to listen to, but its splendid tail means it doesn’t matter. Now an analysis of more than 500 species shows that this is a common trade-off in the bird world: the best lookers aren’t the most talented singers, while the best vocalists aren’t as easy on the eye. Sexual selection is an evolutionary process that shapes traits that animals use to attract mates, and birds are well known to resort to elaborate songs and flashy feathers in the name of reproduction. To investigate which species use which traits, Christopher Cooney at the University of Oxford and his colleagues collected the songs of 518 species, and compared these with their feather colours.

In particular, they looked at how much feathers differed between the males and females of each species – a sign that sexual selection has influenced their plumage. They found that birds in which one sex has more showy plumage than the other tend to have less interesting, more monotonous songs. In species in which the males and females more closely resemble each other, the males sing longer songs over a larger range of musical notes. The reason why bird evolution favours one trait over the other is unclear. It might be that birds living in dense forests with lower visibility rely more on their songs instead of colour to attract mates, but Cooney’s analysis didn’t find any relationship between sexually selected traits and habitat.

Instead, his team think that mate-attracting traits are costly to develop, so a species tends to evolve only one. Alternatively, once one attractive trait has begun to emerge, it may simply be pointless to develop a second.

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“Why do we have a jury system if the judge can just toss it out?”

Jurors Urge Judge To Uphold Monsanto Cancer Ruling (G.)

Jurors who ruled that Monsanto caused a dying man’s cancer are fighting to uphold their landmark $289m verdict, publicly urging a judge not to overturn their decision in a groundbreaking trial. Four California jurors told the Guardian that they were shocked and angry to learn that the judge overseeing their trial had moved to throw out their unanimous verdict, which said the agrochemical corporation failed to warn consumers that its popular weedkiller product posed health risks. The ruling in August, which sparked concerns across the globe about the Roundup herbicide, included $250m in punitive damages to the plaintiff, Dewayne “Lee” Johnson, who has terminal cancer.

But San Francisco superior court judge Suzanne Bolanos stunned campaigners and jurors last week when she issued a tentative ruling on Monsanto’s appeal motion, saying she would likely grant a new trial due to the “insufficiency of the evidence”. “I was just gobsmacked and outraged. I was astonished,” Robert Howard, juror No 4, said in an interview on Thursday. “Why do we have a jury system if the judge can just toss it out?” Bolanos hasn’t yet made a final ruling, leading to an unusual public plea from the jurors and mounting pressure on the judge in recent days. Some jurors said they became emotionally invested in the trial and now felt it was their duty to advocate for their decision and fight for Johnson to receive his award.

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The list is endless. They’re all leaving.

World’s Smallest Porpoise Faces Extinction (AFP)

The near-extinct vaquita marina, the world’s smallest porpoise, has not yet disappeared from its habitat off the coast of Mexico, a research team said Wednesday after spotting six of them. The vaquita has been nearly wiped out by illegal fishing in its native habitat, the Gulf of California, and the World Wildlife Fund (WWF) warned in May that it could go extinct this year. But “all hope is not lost” for saving the species after the recent sightings, said Lorenzo Rojas of the International Committee for the Recovery of the Vaquita (CIRVA), presenting the researchers’ findings. In an 11-day study conducted in late September and early October, marine scientists spotted six vaquitas, including a calf.

The team emphasized that the study was not a full population estimate, which they will present in January after further research. In the last full population estimate, carried out in 2017, CIRVA found there were only 30 vaquitas left. Known as “the panda of the sea” for the distinctive black circles around its eyes, the vaquita has been decimated by gillnets used to fish for another species, the also endangered totoaba fish. The totoaba’s swim bladder is considered a delicacy in China and can fetch up to $20,000 on the black market. Hollywood star Leonardo DiCaprio and Mexican billionaire Carlos Slim have thrown their backing behind the campaign to save the vaquita.

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Select your salt wisely.

Microplastics Found In 90% Of Table Salt (NatGeo)

Microplastics were found in sea salt several years ago. But how extensively plastic bits are spread throughout the most commonly used seasoning remained unclear. Now, new research shows microplastics in 90 percent of the table salt brands sampled worldwide. Of 39 salt brands tested, 36 had microplastics in them, according to a new analysis by researchers in South Korea and Greenpeace East Asia. Using prior salt studies, this new effort is the first of its scale to look at the geographical spread of microplastics in table salt and their correlation to where plastic pollution is found in the environment. “The findings suggest that human ingestion of microplastics via marine products is strongly related to emissions in a given region,” said Seung-Kyu Kim, a marine science professor at Incheon National University in South Korea.

Salt samples from 21 countries in Europe, North and South America, Africa, and Asia were analyzed. The three brands that did not contain microplastics are from Taiwan (refined sea salt), China (refined rock salt), and France (unrefined sea salt produced by solar evaporation). The study was published this month in the journal Environmental Science & Technology. The density of microplastics found in salt varied dramatically among different brands, but those from Asian brands were especially high, the study found. The highest quantities of microplastics were found in salt sold in Indonesia. Asia is a hot spot for plastic pollution, and Indonesia—with 34,000 miles (54,720 km) of coastline—ranked in an unrelated 2015 study as suffering the second-worst level of plastic pollution in the world.

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Oct 052018
 
 October 5, 2018  Posted by at 9:05 am Finance Tagged with: , , , , , , , , , , ,  


Paul Gauguin Contes barbares 1902

 

Economy on Sugar High Before Trade War Worsens (DDMB)
Gundlach Says Treasury Market Is Witnessing A ‘Game Changer’ (MW)
Republicans Aim To Confirm Kavanaugh On Weekend; Protesters Arrested (R.)
Explosive Report Details Chinese Infiltration Of Apple, Amazon And The CIA (ZH)
Mattis Says Russian GRU Caught Red-Handed Hacking OPCW (ZH)
String Of Own Goals By Russian Spies Exposes A Strange Sloppiness (G.)
Elon Musk Mocks SEC as ‘Shortseller Enrichment Commission’ (CNBC)
Elon Musk Accuses BlackRock Of Helping Short Sellers (CNBC)
EU Tells UK To Stop ‘Wasting Time’, Find Irish Border Solution (Ind.)
The Outsized Power Of The City Of London Makes Britain Poorer (G.)
Huge Rise In US Plastic Waste Shipments To Poor Countries After China Ban (G.)

 

 

Later today: Nobel Peace Prize. US jobs numbers. And more Kavanaugh, no doubt.

But first: Stockpiling before tariffs set in.

Economy on Sugar High Before Trade War Worsens (DDMB)

Across the U.S., companies are hitting the panic button. The Trump administration has levied 10 percent tariffs on $200 billion of Chinese goods, a charge that is expected to rise to 25 percent by 2019. This tops the tariffs on $50 billion of Chinese goods that were imposed in August, and is an effective tax on U.S. consumers, who will soon be paying more for everything from cosmetics to clothing to cars if they aren’t already. Against that backdrop, it’s becoming clear that many companies are rushing to secure products and materials before prices rise regardless of current demand. You could say they are in panic-buying mode.

The upside is that this behavior bolsters economic growth in the short term. The downside is that there is likely to be a nasty hangover. The noise in the economic data will be amplified by the rebuilding from Hurricane Florence. The estimates of the storm’s damage span from $20 billion to $50 billion. Evidence that panic buying has set in was seen in the September Chicago Purchasing Managers Index report, which is a bellwether for the broader national manufacturing sector. While the results “disappointed,” with the index falling from 63.6 to a still high 60.4 and the new orders component sinking to a six-month low, the inventory component surged above the 60 mark. (In these diffusion indexes, readings above 50 denote expansion.)

To put the stockpiling in context, inventories have only breached 60 twice this year. Such nosebleed readings are so rare that they rank in the 97th percentile over the last 30 years. As per the Chicago PMI: “Firms continued to add to their stock levels, building on August’s marked rise. The scarce availability of inputs continued to encourage stockpiling while forecasts of higher future demand also contributed to the rise in inventories.”

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Large sums of money are moving.

Gundlach Says Treasury Market Is Witnessing A ‘Game Changer’ (MW)

For investors looking for an inflection point in the bond market, this is it. Jeff Gundlach, chief executive of Doubleline Capital, on Thursday projected that U.S. Treasury yields are likely to rise further and investors should adjust accordingly. The so-called bond king said in an interview with CNN that the 10-year yield could rise to 3.5% and the 30-year could climb to 4%, which are likely to hurt companies sensitive to higher rates, such as auto makers. In a tweet last month, Gundlach had forecast that the 30-year Treasury yield closing above 3.25% two days in a row will signify a “game changer,” a view he reiterated Thursday.

His prophecy has been fulfilled. The 30-year Treasury yield ended at 3.357% on Thursday after rising to 3.316% on Wednesday, according to FactSet. The 30-year yield has “definitively broken above a multiyear base that should, over time, carry us to significantly higher yields,” Gundlach told Reuters. “Also, the curve is steepening a little in this breakout, which is another sign that the situation has changed.” Yields rose sharply this week on the back of strong economic data that supported the widespread belief that the Federal Reserve will maintain its hawkish bias to forestall a possible overheating of the economy.

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Ugliness assured.

Republicans Aim To Confirm Kavanaugh On Weekend; Protesters Arrested (R.)

President Donald Trump’s fellow Republicans gained confidence on Thursday that his U.S. Supreme Court nominee, Brett Kavanaugh, could win Senate confirmation after two wavering lawmakers responded positively to an FBI report on accusations of sexual misconduct against the judge. The report, sent by the White House to the Senate Judiciary Committee in the middle of the night, was denounced by Democrats as a whitewash that was too narrow in scope and ignored critical witnesses. Thousands of anti-Kavanaugh protesters rallied outside the Supreme Court and entered a Senate office building, holding signs such as “Believe Survivors” and “Kava-Nope.”

Hundreds of demonstrators were arrested, including actress Amy Schumer. But Republicans moved forward with plans for a key procedural vote on Friday and a final vote on Saturday on confirming the conservative federal appeals judge for a lifetime job on the top U.S. court. The timing of the vote could be complicated by Republican Senator Steve Daines, whose office said on Thursday he planned to attend his daughter’s wedding in Montana on Saturday, making him unavailable to cast his vote.

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Was reading this yesterday. What a story.

Explosive Report Details Chinese Infiltration Of Apple, Amazon And The CIA (ZH)

The story begins with a Silicon Valley startup called Elemental. Founded in 2006 by three engineers who brilliantly anticipated that broadcasters would soon be searching for a way to adapt their programming for streaming over the Internet, and on mobile devices like smartphones, Elemental went about building a “dream team” of coders who designed software to adapt the super-fast graphics chips being designed for video gaming to stream video instead. The company then loaded this software on to special, custom-built servers emblazoned with its logo. These servers then sold for as much as $100,000 a pop – a markup of roughly 70%. In 2009, the company received its first contract with US defense and intelligence contractors, and even received an investment from a CIA-backed venture fund.

Elemental also started working with American spy agencies. In 2009 the company announced a development partnership with In-Q-Tel Inc., the CIA’s investment arm, a deal that paved the way for Elemental servers to be used in national security missions across the U.S. government. Public documents, including the company’s own promotional materials, show that the servers have been used inside Department of Defense data centers to process drone and surveillance-camera footage, on Navy warships to transmit feeds of airborne missions, and inside government buildings to enable secure videoconferencing. NASA, both houses of Congress, and the Department of Homeland Security have also been customers. This portfolio made Elemental a target for foreign adversaries.

Like many other companies, Elementals’ servers utilized motherboards built by Supermicro, which dominates the market for motherboards used in special-purpose computers. It was here, at Supermicro, where the government believes – according to Bloomberg’s sources – that the infiltration began. Before it came to dominate the global market for computer motherboards, Supermicro had humble beginnings. A Taiwanese engineer and his wife founded the company in 1993, at a time when Silicon Valley was embracing outsourcing. It attracted clients early on with the promise of infinite customization, employing a massive team of engineers to make sure it could accommodate its clients’ every need.

Customers also appreciated that, while Supermicro’s motherboards were assembled in China or Taiwan, its engineers were based in Silicon Valley. But the company’s workforce featured one characteristic that made it uniquely attractive to China: A sizable portion of its engineers were native Mandarin speakers. One of Bloomberg’s sources said the government is still investigating whether spies were embedded within Supermicro or other US companies).

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Hard to believe. Holland has been targeting Russia for years, can’t trust them when it comes to these stories.

Mattis Says Russian GRU Caught Red-Handed Hacking OPCW (ZH)

Russia is facing new multiple wide-ranging charges of hacking as Western officials on Wednesday alleged its intelligence agencies conducted four high profile cyber attacks, including an attempt to spy on the Organisation for the Prohibition of Chemical Weapons (OPCW), which is the independent body responsible for investigating chemical attacks in Syria and in the UK. The OPCW is headquartered the Netherlands, and according to breaking reports a group that the Dutch government has alleged are Russian operatives may have been caught red-handed in the act. Moscow has dismissed the charges as but more “Western spy mania” while leveling its own accusations that the Pentagon is conducting an illegal and dangerous germ and bio-weapons research program near Russia’s borders.

The BBC reports based on Dutch government statements: “The four suspects identified by Dutch officials had diplomatic passports and included two IT experts and two support agents, officials said. They hired a car and parked it in the car park of the Marriot hotel in The Hague, which is next to the OPCW office, to hack into the OPCW’s wifi network, Major General Onno Eichelsheim from the Dutch MIVD intelligence service said.” Authorities were quick to release photographs of the group’s alleged hacking equipment and computers in the trunk of a car. Police say they are GRU operatives (also known as the Main Intelligence Directorate – the intelligence arm of the Russian military) who planned to intercept login passwords to gain access to OPCW internal files (in what appears to have been a low security environment, given wifi use to store sensitive files).


The Dutch government released the above photo which it says proves Russian spies tried to hack OPCW headquarters

But strangely the four men, identified as spies, were immediately escorted out of the Netherlands as opposed to being detained for further questioning and possible trial. Meanwhile the UK government further accused the GRU of conducting cyber-attacks on private firms in Ukraine and Russia, the US Democratic Party, as well as a small TV network in Britain. U.S. Defense Secretary Jim Mattis, addressing the charges on Thursday after a two-day meeting in Brussels, said Russia must be held accountable for its attempts to hack the OPCW office.

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Not only are Russians mean people, they are dumb too. Who believes that?

String Of Own Goals By Russian Spies Exposes A Strange Sloppiness (G.)

It must go down as one of the most embarrassing months ever for Russia’s military intelligence. In the 30 days since Theresa May revealed the cover identities of the Salisbury poison suspects, the secretive GRU (now GU) has been publicly exposed by rival intelligence agencies and online sleuths, with an assist from Russia’s own president. Despite attempts to stonewall public inquiry, the GRU’s dissection has been clinical. The agency has always had a reputation for daring, bolstered by its affiliation with special forces commando units and agents who have seen live combat.

But in dispatching agents to the Netherlands who could, just using Google, be easily exposed as graduates of an elite GRU academy, the agency appears reckless and absurdly sloppy. One of the suspected agents, tipped as a “human intelligence source” by Dutch investigators, had registered five vehicles at a north-western Moscow address better known as the Aquarium, the GRU finishing school for military attaches and elite spies. According to online listings, which are not official but are publicly available to anyone on Google, he drove a Honda Civic, then moved on to an Alfa Romeo. In case the address did not tip investigators off, he also listed the base number of the Military-Diplomatic Academy.

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A judge just oredred Musk and the SEC to explain their settlement.

Elon Musk Mocks SEC as ‘Shortseller Enrichment Commission’ (CNBC)

Tesla CEO Elon Musk mocked the Securities and Exchange Commission in a tweet Thursday, calling the agency the “Shortseller Enrichment Commission,” days after settling fraud charges brought against him by the agency. The tweet, which is missing a word and appears to take a sarcastic tone, says “the Shortseller Enrichment Commission is doing incredible work” and commends the SEC on a name change that did not occur. Musk doubled down on the remark when another Twitter user said Musk needs a “a social team that can get attention without typos and without enraging the Shortseller Enrichment Committee.” The Tesla CEO asked, “Why would they be upset about their mission? It’s what they do.”

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Hardly ever a useful idea to go after short sellers.

Elon Musk Accuses BlackRock Of Helping Short Sellers (CNBC)

Tesla CEO Elon Musk has accused large fund managers such as BlackRock for fueling short sellers, a group of investors he has been criticizing on his Twitter account. In a series of Twitter posts on Thursday night, Musk alleged that BlackRock and other financial firms pocket “excessive profit” from lending shares they hold to short sellers because “they’re suffering a net loss.” Short sellers are investors who bet on the decline of a security, such as a stock. They make money by selling the shares they borrow, and hope the price falls so they can buy them back at a lower price and make profits from it.

Musk also said those funds were “pretending to charge low rates” for their passive “index tracking” products. Fund managers have lowered management fees on certain products due to increased competition in the space. Fidelity Investments said last month it was launching two no-fee index funds, while Vanguard announced in July that investors using its online brokerage platform could trade exchange-traded funds without commission. At the same time, fund managers have been growing their business in securities lending — which is the process of temporarily transferring ownership of shares or bonds to another party, such as short sellers.

The companies earn a fee in return for loaning out their holdings. Securities lending is a lucrative business, according to an opinion piece by Financial Times in April. The newspaper, which cited a regulatory filing, said BlackRock made $597 million in revenue last year from lending securities. Musk hit out at that practice, saying “there is no rational basis” for long-term shareholders to engage in that business. He claimed that doing so “dilutes the shareholder base” while giving short sellers “a strong incentive to attack the company by whatever means possible.”

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The EU should not let Tusk do these things, he’s too easy a target. Let Barnier do the talking.

EU Tells UK To Stop ‘Wasting Time’, Find Irish Border Solution (Ind.)

The EU has told the UK to stop “wasting time” and find a solution to the Irish border row, with just two weeks until the next showdown summit over Brexit. Donald Tusk, the European Council president, turned his fire on Jeremy Hunt for likening the EU to the Soviet Union – accusing ministers of rousing the Tory faithful, instead of striving to reach an agreement. “Unacceptable remarks that raise the temperature will achieve nothing except wasting more time,” Mr Tusk said. “I was a party leader myself for 15 years, so I know what the rules of party politics are. But now, once the Tory conference is over, we should get down to business.”

Speaking alongside Leo Varadkar, the Irish president, Mr Tusk made clear the EU remained “united behind Ireland” in its determination to prevent a return to border posts and checks. But he also made clear his anger at the delay to Theresa May’s promised fresh border proposals – linking it to a reluctance to risk a backlash at the Tory conference. In Birmingham, Mr Hunt, the foreign secretary, triggered fury across the EU by accusing it of trying to keep the UK in a “prison” with behaviour similar to the Soviet Union. After the Salzburg summit, the prime minister accused Mr Tusk of showing disrespect, but he tuned that accusation on the UK, saying: “In respecting our partners, we expect the same in return.

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It sucks too many resources from the ’periphery’. Re: Rome.

The Outsized Power Of The City Of London Makes Britain Poorer (G.)

To argue that the City hurts Britain’s economy might seem crazy. But research increasingly shows that all the money swirling around our oversized financial sector may actually be making us collectively poorer. As Britain’s economy has steadily become re-engineered towards serving finance, other parts of the economy have struggled to survive in its shadow, like seedlings starved of light and water under the canopy of a giant, deep-rooted and invasive tree. Generations of leaders from Margaret Thatcher to Tony Blair to Theresa May have believed that the City is the goose that lays Britain’s golden eggs, to be prioritised, pampered and protected. But the finance curse analysis shows an oversized City to be a different bird: a cuckoo in the nest, crowding out other sectors.

[..] A growing body of economic research confirms that once a financial sector grows above an optimal size and beyond its useful roles, it begins to harm the country that hosts it. The most obvious source of damage comes in the form of financial crises – including the one we are still recovering from a decade after the fact. But the problem is in fact older, and bigger. Long ago, our oversized financial sector began turning away from supporting the creation of wealth, and towards extracting it from other parts of the economy. To achieve this, it shapes laws, rules, thinktanks and even our culture so that they support it. The outcomes include lower economic growth, steeper inequality, distorted markets, spreading crime, deeper corruption, the hollowing-out of alternative economic sectors and more.

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Stop producing the stuff. It’s not hard. Stop using it.

Huge Rise In US Plastic Waste Shipments To Poor Countries After China Ban (G.)

Exports of plastic waste from the US to developing countries have surged following China’s crackdown on foreign waste imports, new research has shown. Nearly half of plastic waste exported from the US for recycling in the first six months of 2018 was shipped to Thailand, Malaysia and Vietnam, according to analysis of US census bureau data by Unearthed, Greenpeace’s investigative arm. The previous year, the US sent more than 70% to China and Hong Kong. This year’s ban on foreign waste imports by China, previously the world’s biggest importer of plastic waste for recycling, has left western countries scrambling to offload its extra plastic waste. The US, along with Britain, Germany, Japan and Mexico, is among the biggest exporters of scrap plastic to China.

Campaigners said the analysis, which Unearthed shared with the Guardian, shows the US is exploiting developing countries where there is no regulatory framework to ensure plastic waste is processed in an environmentally friendly way. “Instead of taking responsibility for their own waste, US companies are exploiting developing countries that lack the regulation to protect themselves,” said John Hocevar, Oceans campaign director for Greenpeace USA. The waste, some of which consists of household recycling produced in the US, includes single-use plastic bottles, plastic bags and food wrappings, said Hocevar. It can, however, contain toxic materials. “It’s a problem for the US and other developed countries to produce, often, toxic material which they can’t or won’t take care of themselves.”

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Sep 132018
 
 September 13, 2018  Posted by at 8:45 am Finance Tagged with: , , , , , , , , , , ,  


Henri Matisse Landscape with a bench 1918

 

This Will Be The Mother Of All Minsky Moments (Mauldin)
Leaderless World Is Sleepwalking Into A Financial Crisis – Gordon Brown (G.)
UK PM May Calls Special Meeting To Discuss ‘No-Deal’ Brexit (CNBC)
EU Can ‘Certainly Not’ Accept Theresa May’s Single Market Plan – Juncker (Ind.)
Juncker Calls On EU To Seize Chance To Become Major Sovereign Power (G.)
Poland Says It Will Block Any EU Sanctions Against Hungary (R.)
Leaked Video Shows Distraught Google Execs Grappling With Hillary’s Loss (ZH)
John Kerry Accused Of Violating Logan Act In Secret Iran Talks (ZH)
US Destroyer Arrives In Mediterranean As Syria Tensions Rise (RT)
No NGO Rescue Boats Currently In Central Mediterranean (G.)
Two More Potential ‘Garbage Patch’ Zones In World’s Oceans Identified (Ind.)
Florence To Slow Down, Hammer Carolinas and Appalachia for Days (Weather.com)

 

 

The mother of all debt loads.

This Will Be The Mother Of All Minsky Moments (Mauldin)

Dr. Hyman Minsky points out that stability leads to instability. The more comfortable we get with a given condition or trend, the longer it will persist. And then when the trend fails, the more dramatic the correction. Long-term stability produces unstable financial arrangements. If we believe that tomorrow will be the same as last week, we are more willing to add debt or postpone savings in favor of current consumption. Thus, says Minsky, the longer the period of stability, the higher the potential risk for even greater instability when market participants must change their behavior.

[..] I think the mother of all Minsky moments is building. It will not be an instant sandpile collapse, but instead take years because we have $500 trillion of debt to work through. Remember, that debt just can’t be pooped away. It is both money somebody owes and an asset on somebody else’s balance sheet. We can’t just take that away without huge consequences to culture and society.

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All these people responsible for the last crisis are now advising on what to do with the next one.

Leaderless World Is Sleepwalking Into A Financial Crisis – Gordon Brown (G.)

“It is very difficult to say what will trigger it [the next crisis] but we are at the latter end of the economic cycle where people take greater risks. There are problems in emerging markets.” Brown said one area of concern should be heavy commercial and industrial lending by lightly or unregulated shadow banks at a time when US interest rates are rising. “It could arise in Asia because of the amount of lending through the shadow banking system.” He added: “In an interconnected world there is an escalation of risks. We have had a decade of stagnation and we are now about to have a decade of vulnerability.”

Recalling the freezing up of the financial markets a decade ago, Brown said governments had sought to compensate for the lack of trust between banks by cooperating more closely. “In the next crisis a breakdown of trust in the financial sector would be mirrored by breakdown in trust between governments. There wouldn’t be the same willingness to cooperate but rather a tendency to blame each other for what’s gone wrong.

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Waking up at last?

UK PM May Calls Special Meeting To Discuss ‘No-Deal’ Brexit (CNBC)

The U.K. government is set to meet Thursday morning for three-hours to discuss the eventuality of a “no-deal” Brexit. The meeting takes place at a time when the government is also releasing more than 20 documents, outlining some more preparations in case the U.K. leaves the European Union in March 2019 without a deal. This is not the first set of papers outlining what will happen in case the U.K. and the EU do not reach a deal. In late August, the U.K. government said that businesses should prepare for higher barriers to trade, more red tape and potentially higher costs too, if Brexit talks collapse.

All these steps are part of a wider attempt to step up works for the worst-case scenario. The EU has also strengthened its preparations in case the U.K. leaves the bloc abruptly. The U.K.’s Brexit chief, Dominic Raab, warned on Wednesday that the U.K. will not pay the so-called divorce bill, if there is no final deal over Brexit. Raab wrote in the Daily Telegraph that the £39 billion ($50.82 billion) the U.K. owes to the EU, due to previous policy agreements, will not be repaid if there is no deal.

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We know.

EU Can ‘Certainly Not’ Accept Theresa May’s Single Market Plan – Juncker (Ind.)

Jean-Claude Juncker has given his clearest signal yet that the EU will not accept Theresa May’s plan to keep Britain in the single market for goods after Brexit. In his annual state of the union address in Strasbourg, the European Commission president said parts of the single market could “certainly not” be jettisoned for countries outside the bloc. But he said the Chequers proposals could be a “starting point” for the future relationship and that Britain would “never be an ordinary” country for the EU. “We respect the British decision to leave our union, even though we continue to regret it deeply,” he told MEPs. “But we also ask the British government to understand that someone who leaves the union cannot be in the same privileged position as a member state.

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Bigger is better?!

Juncker Calls On EU To Seize Chance To Become Major Sovereign Power (G.)

In his state of the union speech, titled The Hour of European Sovereignty, the European commission president appealed to MEPs and heads of government to give the EU the powers and characteristics traditionally restricted to states. Explaining his expansive vision, Juncker said the EU should aim to surpass the dominance of the dollar in the world economy and challenge China in its attempts to become the ascendant influence in Africa. The EU should be “a global player” as well as a “global payer”, Juncker said, with foreign policy decisions made on the basis of a qualified majority vote in which the will of 55% of member states would win the day.

Through trade deals, the EU’s standards and labour conditions were being exported across the world, he said, and it was time for the continent to further use its “clout” to mould the future. “The geopolitical situation makes this Europe’s hour: the time for European sovereignty has come,” Juncker told the European parliament in Strasbourg. “It is time Europe took its destiny into its own hands. It is time Europe developed what I coined Weltpolitikfähigkeit – the capacity to play a role, as a union, in shaping global affairs. Europe has to become a more sovereign actor in international relations.”

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A crumbling fortress.

Poland Says It Will Block Any EU Sanctions Against Hungary (R.)

Poland, the biggest former communist country in the European Union, said it will oppose any sanctions imposed by the bloc on fellow member Hungary, accused of floating EU rules on democracy. “Every country has its sovereign right to make internal reforms it deems appropriate,” Poland’s foreign ministry said in a statement late on Wednesday. “Actions aimed against member states serve only deepening divides in the EU, increasing citizens’ current lack of confidence to European institutions.” The European Parliament voted on Wednesday to sanction Hungary for neglecting norms on democracy, civil rights and corruption in a first bid to launch the punitive process of the EU treaty’s Article 7.

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AI to save their day?

Leaked Video Shows Distraught Google Execs Grappling With Hillary’s Loss (ZH)

Days after Google was exposed trying to help Hillary Clinton win the 2016 election, a leaked “internal only” video published by Breitbart Senior Tech correspondent Allum Bokhari reveals a panel of Google executives who are absolutely beside themselves following Hillary Clinton’s historic loss. The video is a full recording of Google’s first all-hands meeting following the 2016 election (these weekly meetings are known inside the company as “TGIF” or “Thank God It’s Friday” meetings). Sent to Breitbart News by an anonymous source, it features co-founders Larry Page and Sergey Brin, VPs Kent Walker and Eileen Naughton, CFO Ruth Porat, and CEO Sundar Pichai. -Breitbart

In the video, Brin can be heard comparing Trump supporters to fascists and extremists – arguing that like other extremists, Trump voters suffered from “boredom” which has, he claims, historically led to fascism and communism. He then asks his company what they can do to ensure a “better quality of governance and decision-making.” And according to Kent Walker, VP for Global Affairs, those who support populist causes like the MAGA movement are motivated by “fear, xenophobia, hatred and a desire for answers that may or may not be there.” He later says that Google needs to fight to ensure that populist movements around the world are merely a “blip” and a “hiccup” in the arc of history that “bends towards progress.”

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A dark-grey area at best.

John Kerry Accused Of Violating Logan Act In Secret Iran Talks (ZH)

Though he previously denied it when allegations first surfaced last Spring, former Secretary of State John Kerry has now disclosed he’s personally had semi-frequent face to face contact with top Iranian officials to discuss US-Iran relations since Trump entered office. Kerry confirmed and explained in detail his recent meetings with Iranian Former Minister Javad Zarif in an interview with radio host Hugh Hewitt to promote his new memoir, Every Day Is Extra.

During the interview Kerry disclosed that he met with Zarif “three or four times” and discussed political issues and challenges between the United States and Iran in what could constitute a significant and clear violation of the Logan Act. Though it’s almost never been enforced, the 1799 Logan Act states that unauthorized diplomacy with foreign powers by private American citizens is a crime. Notably, two Trump-connected individuals that prominent Liberals and editorials demanded be prosecuted under the Logan Act include former national security advisor Michael Flynn and Trump senior adviser and son-in-law Jared Kushner.

When asked point blank during the radio show about his rumored meetings with top Iran officials, Kerry admitted, “I think I’ve seen him three or four times,” but attempted to claim he was not trying to “coach” Iran on how to navigate President Trump’s pullout of the Iran nuclear deal. Kerry is of course now a private citizen out of government but holds significant clout and influence with the Iran FM as the two hammered out the details of the JCPOA brokered under President Obama in the first place.

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I wouldn’t be too sure Russia will back down again.

US Destroyer Arrives In Mediterranean As Syria Tensions Rise (RT)

With the arrival of another guided missile destroyer to the Mediterranean, the US may have 200 ‘Tomahawks’ ready for a strike on Syria, as Russia warns that jihadist groups in Idlib are planning a fake chemical attack. The USS Bulkeley (DDG-84), an Arleigh Burke-class destroyer, entered the Mediterranean through the Straits of Gibraltar on Wednesday, the Russian news agency Interfax reported citing international maritime monitoring data. A Gibraltar-watcher confirmed the destroyer’s transit on September 12.

With the arrival of the Bulkeley, the US forces in the region have up to 200 ‘Tomahawk’ cruise missiles available to strike targets in Syria if ordered to do so, Interfax reported. Last week, the attack submarine USS Newport News (SSN-750) arrived in the Mediterranean as well. Last week, Russia conducted massive naval maneuvers off the Syrian coast, culminating in marine landing drills and missile launches. The presence of Russian ships in the area was seen as a possible deterrent to further US military action against Syria.

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If a tree falls in a forest…

No NGO Rescue Boats Currently In Central Mediterranean (G.)

Thousands of migrants risk dying at sea because of a clampdown on NGO rescue ships, aid agencies have warned, in what has been their longest period of absence from the central Mediterranean since they began operating in late 2015. Since 26 August, no NGO rescue vessel has operated on the main migration routes between north Africa and southern Europe. Anti-immigration policies by the Maltese and Italian governments, which have closed their ports to the vessels, have driven the sharp decrease in rescue missions. People seeking asylum are still attempting the risky crossing – but without the boats, shipwrecks are likely to rise dramatically.

The last time the Mediterranean was without NGO rescue boats was from 28 June to 8 July 2018, and in those days more than 300 migrants died at sea. The death toll has fallen in the past year, but the number of those drowning as a proportion of arrivals in Italy has risen sharply in the past few months, with the possibility of dying during the crossing now three times higher.

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When we create truly lasting legacies.

Two More Potential ‘Garbage Patch’ Zones In World’s Oceans Identified (Ind.)

Much attention has focus on the plastic floating on the surface, but this accounts for less than 1 per cent of the total plastic thought to be in ocean. To trace the likely fate of the remaining 99 per cent, scientists at Newcastle University used computer models and identified two likely locations for accumulation zones that had previously slipped under the radar. The Gulf of Guinea region and the East Siberian Sea may be hosting large quantities of plastic that cannot be easily viewed from the water surface, as up to 70 per cent of plastic debris is thought to sink and remain on the sea floor.

“There’s a need to find the unaccounted for plastic in the ocean mainly because if we don’t know the extent of the problem, then there’s no way of knowing the potential implications it has,” explained Alethea Mountford, a PhD Student at Newcastle University who led the study. “Once the plastics reach the water column, the greatest impact would be on marine organisms through ingestion and entanglement,” she said.

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A lot of storms. Mangkhut is about to hit the Philippines.

Florence To Slow Down, Hammer Carolinas and Appalachia for Days (Weather.com)

Hurricane Florence continues to expand in size. Hurricane-force winds now extend outward up to 80 miles the center and tropical-storm-force winds extend outward up to 195 miles from the center. This expansion in size only increases the hurricane’s energy and potential for significant storm surge. The National Hurricane Center noted Wednesday evening that while Florence has weakened some, “the wind field of the hurricane continues to grow in size. This evolution will produce storm surges similar to that of a more intense, but smaller, hurricane, and thus the storm surge values seen in the previous advisory are still valid.” Previous large Category 2 hurricanes have done enormous amounts of damage along the U.S. coast.

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Sarah Kendzior tweets:

The best workaround I’ve found to Twitter’s horrible new algorithm is putting this in the search bar:

filter:follows -filter:replies include:nativeretweets

You will get your old chronological timeline back with no “likes” and with retweets from people you actually follow.

Aug 292018
 
 August 29, 2018  Posted by at 9:17 am Finance Tagged with: , , , , , , , , , , ,  


Pablo Picasso In “Le Lapin Agile” or harlequin with a glass 1905

 

Almost Half Of Americans Can’t Pay For Their Basic Needs (CBS)
White House Probes Google After Trump Accuses It Of Bias (R.)
Trump Unblocks More Twitter Users After US Court Ruling (R.)
Facebook Censorship, Mad Ben Nimmo and the Atlantic Council (Craig Murray)
The Greatest Fake Bull Ever (Stockman)
China’s Building-Boom Hits A Wall As Shadow-Banking System Collapses (ZH)
A Senator Masquerading as a Gas Station (Dmitry Orlov)
Brazil Sends Army To Border As Venezuelans Flee Crisis At Home (R.)
Syria Ready To Take One Million Returning Refugees – Moscow (AFP)
Just 10 Rivers Carry 95% Of All Plastic Into The Ocean (BT)
Bees Develop Preference For Pesticides (PA)

 

 

Now imagine a shrinking economy thrown in.

Almost Half Of Americans Can’t Pay For Their Basic Needs (CBS)

Four in 10 Americans are struggling to pay for their basic needs such as groceries or housing, a problem even middle-class households confront, according to a new study from the Urban Institute. Despite the U.S. economy being near full employment, 39.4 percent of adults between 18 and 64 years old said they experienced at least one type of material hardship in 2017, according to the study, which surveyed more than 7,500 adults about whether they had trouble paying for housing, utilities, food or health care. The findings surprised researchers at the Urban Institute, who had expected to find high levels of hardship among poor Americans but hadn’t predicted so many middle-class families would also struggle to meet their basic needs.

That may illustrate that a middle-class income “is no guarantee” of protection from hardship, said Michael Karpman, research associate at the Urban Institute’s health Policy Center and a co-author of the report. Against the backdrop of President Donald Trump’s boasting about low unemployment and strong economic growth, the research adds nuance to the problems facing American families. Middle-class households tend to struggle with paying their health care bills rather than utilities, for instance. Health care costs have outpaced wages and inflation, pushing more Americans into high-deductible plans, which can backfire when serious health problems arise.

“A lot of people are looking at the fact that wages aren’t keeping up with household costs as one reason families are having difficulty making ends meet,” Karpman said. “Even for families with health insurance, they may be facing high deductibles that leave them facing high costs.”

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The bias is obvious. How to fight it is not.

White House Probes Google After Trump Accuses It Of Bias (R.)

U.S. President Donald Trump on Tuesday accused Google’s search engine of promoting negative news articles and hiding “fair media” coverage of him, vowing to address the situation without providing evidence or giving details of action he might take. Trump’s attack against the Alphabet Inc unit follows a string of grievances against technology companies, including social media Twitter Inc and Facebook Inc, which he has accused of silencing conservative voices, and Amazon.com Inc, which he has said is hurting small businesses and benefiting from a favorable deal with the U.S. Postal Services. He frequently berates news outlets for what he perceives as unfair coverage.

Google denied any political bias, saying in a statement that its search engine is “not used to set a political agenda and we don’t bias our results toward any political ideology.” Trump said in several tweets on Tuesday that Google search results for “Trump News” were “rigged” against him because they showed only coverage from outlets like CNN and not conservative publications, suggesting the practice was illegal. “I think Google is really taking advantage of our people,” Trump said on Tuesday in the Oval Office. “Google, and Twitter and Facebook, they are really treading on very, very troubled territory, and they have to be careful. It’s not fair to large portions of the population.”

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A pattern emerges. Trump violates 1st amendment when blocking users, but Twitter “retains authority to revoke access”. That cannot stand.

Trump Unblocks More Twitter Users After US Court Ruling (R.)

U.S. President Donald Trump on Tuesday unblocked some additional Twitter users after a federal judge in May said preventing people from following him violated individuals constitutional rights. U.S. District Judge Naomi Reice Buchwald in Manhattan ruled on May 23 that comments on the president’s account, and those of other government officials, were public forums and that blocking Twitter Inc users for their views violated their right to free speech under the First Amendment of the U.S. Constitution. The Knight First Amendment Institute at Columbia University on August 10 sent the Justice Department a list of 41 accounts that had remained blocked from Trump’s @RealDonaldTrump account. The seven users who filed suit had their accounts unblocked in June.

The 41 blocked users include a film producer, screenwriter, photographer and author who had criticized President Trump or his policies. At least 20 of those individuals said on Twitter that Trump had unblocked them on Tuesday. The 41 users were not a comprehensive list of those blocked by Trump. Rosie O’Donnell, a comedian, said on Twitter late Tuesday that she remained blocked. [..] The ruling has raised novel legal issues. The Internet Association, a trade group that represents Twitter, Facebook Inc, Amazon.com, and Alphabet Inc, filed a brief in the case earlier this month that did not back Trump or the blocked users but urged the court to “limit its decision to the unique facts of this case so that its decision does not reach further than necessary or unintentionally disrupt the modern, innovative Internet.”

[..] The Internet Association said the court “should make clear that this case does not implicate the overwhelming majority of social media accounts throughout the Internet.” “Despite any First Amendment status that this court might find in the ‘interactive spaces’ associated with President Trump’s account, Twitter retains authority to revoke access to both his account and the account of any user seeking to comment on President Trump’s account,” the group said.

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Facebook deletes posts from a former UK ambassador.

Facebook Censorship, Mad Ben Nimmo and the Atlantic Council (Craig Murray)

Facebook has deleted all of my posts from July 2017 to last week because I am, apparently, a Russian Bot. For a while I could not add any new posts either, but we recently found a way around that, at least for now. To those of you tempted to say “So what?”, I would point out that over two thirds of visitors to my website arrive via my posting of the articles to Facebook and Twitter. Social media outlets like this blog, which offer an alternative to MSM propaganda, are hugely at the mercy of these corporate gatekeepers.

Facebook’s plunge into censorship is completely open and admitted, as is the fact it is operated for Facebook by the Atlantic Council – the extreme neo-con group part funded by NATO and whose board includes serial war criminal Henry Kissinger, Former CIA Heads Michael Hayden and Michael Morrell, and George Bush’s chief of Homeland Security Michael Chertoff, among a whole list of horrors.

The staff are worse than the Board. Their lead expert on Russian bot detection is an obsessed nutter named Ben Nimmo, whose fragile grip on reality has been completely broken by his elevation to be the internet’s Witchfinder-General. Nimmo, grandly titled “Senior Fellow for Information Defense at the Atlantic Council’s Digital Forensic Research Lab”, is the go-to man for Establishment rubbishing of citizen journalists, and as with Joseph McCarthy or Matthew Clarke, one day society will sufficiently recover its balance for it to be generally acknowledged that this kind of witch-hunt nonsense was not just an aberration, but a manifestation of the evil it claimed to fight.

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“..the generational fiscal catastrophe that looms in the 2020s as 80 million baby-boomers pile onto the social security/medicare wagon.”

The Greatest Fake Bull Ever (Stockman)

the Wall Street stock indices have vastly out-run the meager gains in the main street economy since the pre-crisis peak; and that at this late stage of the business cycle—merely 10 months from the prior record—there is absolutely no plausible risk/reward equation left. That’s because earnings will plummet in the next recession—by 40% or more if history is any guide. And that’s likely to be conservative in view of the elephant in the casino that Wall Street stubbornly refuses to acknowledge. To wit, back in June 2007, the S&P 500 earnings peaked at $85 per share, but that reflected fully $55 per share of after-tax interest expense. Fast forward to the LTM period ending in December 2017 when earnings per share posted at $110 per share, but reflected only $19 per share of after-tax interest expense.

In other words, more than 100% of the gain over the past 11 years was due to the drastic financial repression of the central banks and its impact on corporate interest expense. Yet the central banks of the world—led belatedly by the Fed—have made an epochal pivot to QT (quantitative tightening) and interest rate normalization, even as the value of the interest expense deduction has been reduced to chump change owing to the new effective tax rate of about 15%. So interest expense is marching back up the hill, and it’s not remotely priced-in—not any more than the next recession or the generational fiscal catastrophe that looms in the 2020s as 80 million baby-boomers pile onto the social security/medicare wagon.

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Xi has let the shadows grow to fake the growth, and will have a hard time tackling them now.

China’s Building-Boom Hits A Wall As Shadow-Banking System Collapses (ZH)

Beijing wants to shore up growth without inundating the economy with cheap credit. But, as WSJ’s Walter Russell Mead pointed out previously, it’s not easy… “Chinese leaders know that their country suffers from massive over-investment in construction and manufacturing, that its real-estate market is a bubble that makes the Dutch tulip frenzy look restrained, that both conventional debt and debt in the shadow-banking system are too large and growing too rapidly. But even as the Communist Party centralizes power and clamps down on dissent, it dithers when it comes to the costly and difficult work of shifting China’s economic development onto a sustainable track. Chinese authorities have tried to tackle some of these problems, but often retreat when reforms start to bite and powerful interests push back.”

To see how hard that will be, The Wall Street Journal’s Nathaniel Taplin takes a look at China’s roads and railways. “China is the 800-pound gorilla of global infrastructure. Its building prowess has permeated popular culture, as in the disaster movie “2012” where China constructs giant ships to help humankind escape rising seas. Recently, however, China’s infrastructure build has all but ground to a halt.” Here’s why… The central government last year started to crack down on unregulated, opaque – so-called ‘shadow-bank’ borrowing – alarmed at its vast scale, and potential for corruption.

For five straight months, the shadow banking system has contracted under this pressure, sucking the malinvestment lifeblood out of economic growth and construction booms as Chinese local governments, which account for the bulk of such investment, set up as so-called local-government financing vehicles (off balance sheet), or LGFVs, and have seen an unprecedented net $19 billion outflow in recent months. As WSJ’s Talpin notes, these days Beijing prefers that local governments borrow on-the-books, through the now legal municipal bond market. The problem is that lower-rated and smaller cities are mostly shut out, even though they do most actual capital spending. As a result, investment has kept slowing even though China’s net muni bond issuance in July was three times higher than it was in March.

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“Other Americans just marched around ineffectually, waving banners and shouting antiwar slogans, but not McCain!”

A Senator Masquerading as a Gas Station (Dmitry Orlov)

John McCain is dead, and many people are celebrating whereas they should be sad. He wasn’t a friend of mankind—he was its enemy, but a really bad one. But with such grossly incompetent enemies—who needs friends? McCain did a great deal to destroy America. He devoted his entire lifetime to American destruction. To start with, he was quite effective as a protester against America’s genocidal war on the people of Vietnam. Other Americans just marched around ineffectually, waving banners and shouting antiwar slogans, but not McCain! His own father had a lot to do with starting that war, but McCain made up for that by destroying 26 American war planes. That’s quite something! If every American flyer crashed as many planes, countless innocent lives would have been saved.

Of course, he could have done even better—and he did try. He almost managed to destroy the US aircraft carrier Forrestal by setting it ablaze. To top off his illustrious military career, he surrendered to the enemy and spent five years in a Vietnamese prison. This made him a hero—in Americans’ eyes only, while the rest of the world saw in him a murderer of Vietnamese children. His “martyrdom” as a POW helped pave his way to a political career, first in Congress, then in the Senate. During his obscenely long career in national politics, McCain did what he could to make American “democracy” look like a complete joke and to hasten America’s collapse. This, by the way, wasn’t a tall order: American “democracy” had long been a cesspool—a playground for lobbyists and political technologists based on a fully gerrymandered system of fake elections. But he did his thing, and is therefore twice the hero.

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Fast getting out of hand.

Brazil Sends Army To Border As Venezuelans Flee Crisis At Home (R.)

Brazil said it was sending armed forces to keep order near the Venezuelan border area, while Peru declared a health emergency, as a regional crisis sparked by thousands of Venezuelans fleeing economic collapse escalated on Tuesday. In Brazil, where residents rioted and attacked Venezuelan immigrants in a border town earlier this month, President Michel Temer signed a decree to deploy the armed forces to the border state of Roraima. He said the move was aimed at keeping order and ensuring the safety of immigrants. Peru, meanwhile, declared a 60-day health emergency in two provinces on its northern border, citing “imminent danger” to health and sanitation.

The decree, published in the government’s official gazette, did not give more details on the risks, but health authorities have previously expressed concerns about the spread of diseases such as measles and malaria from migrants. The exodus of Venezuelans to other South American countries is building toward a “crisis moment” comparable to events involving refugees in the Mediterranean, the United Nations said this week. Temer blamed the socialist Venezuelan government of President Nicolas Maduro for the migration crisis. “The problem of Venezuela is no longer one of internal politics. It is a threat to the harmony of the whole continent,” Temer said in a televised address.

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If the US lets Syria rebuild.

Syria Ready To Take One Million Returning Refugees – Moscow (AFP)

Russia’s defence minister said on Tuesday that war-torn Syria would be ready to accept one million returning refugees, following Moscow-backed reconstruction work. “Since 2015, when towns and villages gradually started to be freed, more than one million people have returned home,” Sergei Shoigu said in comments reported by Russian news agencies. “Now every opportunity has been created for the return of roughly one million (more) refugees,” he told journalists. “Huge infrastructure reconstruction work is ongoing, the rebuilding of transport routes and security points so that Syria can begin accepting refugees.”

Russia, a long-time ally of Syria, launched a military intervention in 2015 to support the embattled regime of President Bashar al-Assad, a move that changed the course of the war. Assad and his allies have since recovered swathes of territory and the government is turning its attention to post-conflict reconstruction, with the aid of Moscow. The war that erupted in 2011, one of the most devastating conflicts since World War II, has displaced more than half of Syria’s population, including more than five million beyond its borders. Most of them fled to neighbouring countries, particularly Turkey, Jordan and Lebanon.

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It’ll take a gargantuan effort to stop this.

Just 10 Rivers Carry 95% Of All Plastic Into The Ocean (BT)

Cheap, durable and multifunctional, plastic is one of humanity’s most successful inventions. From the 1950s to 2015, we’ve produced 8.3 billion metric tons of the stuff. By now, it’s everywhere. It’s also non-biodegradable. And that’s devastating the environment. Only 9% of all plastic waste has been recycled, and another 12% has been incinerated. That means that almost 80%—nearly 6.3 billion tons—has turned into waste with no half-life to speak of: condemned to an eternity as landfill, litter or ocean-clogging junk. Every year, plastic kills around 1 million seabirds, 100,000 sea mammals and inestimable numbers of fish. The volume of plastic trash in the world’s oceans is currently estimated to be around 150 million tons. No less than eight million tons are added to that every year—that’s one truckload every minute.

Between 0.5 and 2.75 million tons come from rivers alone. Large rivers are particularly efficient conveyors of plastic waste to the oceans, especially in countries lacking a well-developed waste management infrastructure. Up to 95% of river-borne plastic comes from just 10 rivers, scientists at the Helmholtz Center for Environmental Research in Leipzig, Germany have found. The scientists analysed data on both microplastic debris (<5mm) such as beads and fibres, as well as microplastic objects (plastic bottles, bags, etc.) from 79 sampling sites on 57 of the world’s largest rivers, singling out the 10 mapped out here as the biggest culprits, due to “mismanagement of plastic waste in their watersheds”.

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Nicotine addiction.

Bees Develop Preference For Pesticides (PA)

Bumblebees acquire a taste for pesticide-laced food that can be compared to nicotine addiction in smokers, say scientists. The more of the nicotine-like chemicals they consume, the more they appear to want, a study has shown. The findings suggest that the risk of potentially harmful pesticide-contaminated nectar entering bee colonies is higher than was previously thought. In a series of studies, a team of British researchers offered bumblebees a choice of two sugar solutions, one of which was laced with neonicotinoid pesticides. They found that over time the bees increasingly preferred feeders containing the pesticide-flavoured sugar.

Dr Richard Gill, from the Department of Life Sciences at Imperial College London, said: “Given a choice, naive bees appear to avoid neonicotinoid-treated food. However, as individual bees increasingly experience the treated food they develop a preference for it. “Interestingly, neonicotinoids target nerve receptors in insects that are similar to receptors targeted by nicotine in mammals. “Our findings that bumblebees acquire a taste for neonicotinoids ticks certain symptoms of addictive behaviour, which is intriguing given the addictive properties of nicotine on humans, although more research is needed to determine this in bees.” Controversial neonicotinoid pesticides are chemically similar to nicotine, the addictive compound in tobacco.

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Aug 152018
 
 August 15, 2018  Posted by at 9:11 am Finance Tagged with: , , , , , , , , , , , ,  


Paul Signac Maison de Van Gogh Arles 1933

 

Two Greek Soldiers Released From Turkish Jail Return Home (K.)
Turkey Shows Damage Of Fading World Order (R.)
Turkey Hikes Tariffs On Imports Of Selected US Products (AFP)
US Household Debt Rises To $13.3 Trillion In Second Quarter (R.)
Has Bezos Become More Powerful In DC Than Trump? (VF)
Trump Criticizes Some Russia Provisions Of Defense Bill (USAT)
Tonga PM Calls On China To Write Off Pacific Debt (AFP)
“Hothouse Earth” And Neoliberal Economics (IC)
We’re In A New Age Of Obesity. How Did It Happen? (Monbiot)
More Recycling Won’t Solve Plastic Pollution (SciAm)
Glyphosate Is Here To Stay In EU – At Least For Now (Pol.eu)
Help Me, My Prince: Guernsey Resident Halts Roadworks With Ancient Plea (G.)

 

 

Here’s what interesting about this: the two soldiers, who had been in detention for almost half a year for accidentally stepping across the border, were released by a provincial court, and get back home on a Greek national holiday (August 15). On that same day, another court decides that an appeal for pastor Brunson is denied. Ergo, Erdogan can claim the latter’s fate is out of his hands: it’s the court system that decides. That victory over Trump is worth more to him than the defeat of not exchanging the soldiers for the 8 Turkish servicemen who have aylum in Greece.

Two Greek Soldiers Released From Turkish Jail Return Home (K.)

Two Greek soldiers freed after months in a Turkish prison returned to Greece by government jet early Wednesday after their unexpected release by a provincial court. Defense Minister Panos Kammenos said he phoned his Turkish counterpart to express his satisfaction with the soldiers’ release and invite him to visit Greece. “This is a great day for our motherland, the day of Our Lady, the day of Tinos in 1940,” Kammenos told reporters, referring to the Feast of the Dormation, which falls on August 15 and to the Italian torpedoing on a Greek warship on this day in 1940. “I hope that their release … will herald a new day in Greek-Turkish relations. We can live together peacefully, for the benefit of both our peoples.”

The soldiers – 2nd Lieutenant Angelos Mitretodis and Sergeant Dimitris Kouklatzis – were met by Kammenos, the army chief of staff and an honor guard after their arrival at 3 a.m. at the airport in the northern city of Thessaloniki. “All I want to say is thank you,” Mitretodis told reporters. The men were arrested on March 1 for illegally entering Turkey after crossing the heavily militarized land border. Greece strongly protested their long detention in the western town of Edirne, arguing that they had strayed across during a patrol of a trail of suspected illegal immigration amid poor visibility due to bad weather.

[..] The men’s arrest had considerably strained Greek-Turkish relations. Kammenos had claimed that they were being held “hostage” by Turkey, which is trying to secure the extradition of eight Turkish servicemen who fled to Greece after the 2016 failed military coup in Turkey. Ankara accuses its servicemen of involvement in the coup, but Greek courts have refused to extradite them, arguing they would not get a fair trial in Turkey and their lives would be in danger there.

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The world order does too much damage. Just look at the IMF.

Turkey Shows Damage Of Fading World Order (R.)

Turkey’s currency crisis was easy to predict. What is more surprising is how weak the global response has been. The old world financial order is badly missed. A big mess was almost certain to arrive in a country that continually relied on short-term loans to finance a large current account deficit. That was not the only invitation to disaster. Heavy domestic borrowing denominated in foreign currencies and high inflation added to the strains. So did a government that spurned the counsel of the foreign financiers who help keep the economy afloat. President Tayyip Erdogan was lucky to avoid serious trouble so far. Now, though, he faces a disaster. The Turkish lira has fallen 42% against the dollar since the beginning of May. It will take a miracle or an international rescue to avoid a domestic banking crisis.

Much has changed since 2009 when the government, then led by Prime Minister Erdogan, announced that it no longer needed advice from the IMF. The country would “move forward without a walking stick”. Turkey had leaned heavily on the IMF crutch over preceding decades. The country had a standby arrangement with the global lender for more than half the period between 1970 and 2009. The IMF promised support if the government kept working on economic reforms. This time, however, the IMF is still waiting for a phone call from Ankara. The Washington-based institution has the expertise and probably the money needed to stabilise the lira, but Erdogan has cast it in the role of enemy of the Turkish people.

The antipathy fits with the president’s nationalist and authoritarian agenda, but it is also part of a distressing pattern. The traditional authority figures in global financial matters are crippled. The IMF’s reputation has been damaged by what was widely perceived as its blind allegiance to the doctrines of free trade, free capital movements and free markets. Though the multilateral institution’s approach has softened under Christine Lagarde, managing director since 2011, Turkey’s intransigence suggests the IMF lacks its former moral authority.

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And the lira is gaining.

Turkey Hikes Tariffs On Imports Of Selected US Products (AFP)

Turkey is hiking tariffs on imports of certain US products in response to American sanctions on Ankara that caused the value of the lira to plunge, a decree published Wednesday said. Turkish Vice President Fuat Oktay said that the rises were ordered “within the framework of reciprocity in retaliation for the conscious attacks on our economy by the US administration”. The hikes were published in Turkey’s Official Gazette in a decree signed by President Recep Tayyip Erdogan. The move comes after US President Donald Trump announced that the United States was doubling steel and aluminium tariffs on Turkey, as the two NATO allies row over the detention by Turkish authorities of American pastor Andrew Brunson.

The tensions and the tariff hike by the United States have caused the Turkish lira to bleed value, fanning fears the country is on the verge of an economic crisis that could spillover into Europe. Erdogan has repeatedly described the crisis as an “economic war” that Turkey will win. The tariff increases amount to a doubling of the existing rate, the state-run Anadolu news agency said, in an apparent parallel response to Trump’s move. The decree said the move brought tariffs to 50% on imports of US rice to 140% on hard alcoholic drinks like spirits, 60% in leaf tobacco and 60% on cosmetics. The tariffs on auto imports are now up to 120% depending on the type of vehicle.

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The rising debt is linked to a ‘solid labor market’. Well, if it were all that solid (as in higher wages etc.), people wouldn’t need to get into debt.

US Household Debt Rises To $13.3 Trillion In Second Quarter (R.)

Americans’ borrowing reached $13.29 trillion in the second quarter, up $454 billion from a year ago, marking a 16th consecutive quarter of increases, a New York Federal Reserve report released on Tuesday showed. The level of U.S. consumer debt was $618 billion higher than the previous peak of $12.68 trillion in the third quarter of 2008. It was 19.2% above a post global credit crisis low set in the second quarter of 2013, the New York Fed said. The ongoing growth in home, auto, student and credit loans has been linked with a solid labor market. The rise in indebtedness did not make it more difficult for borrowers to meet their monthly payments last quarter.

The rate on seriously delinquent loans, or those that are 90 days or more past due, was 2.3% in the second quarter, unchanged from the prior quarter. Notably, the pace of student loans turning seriously delinquent slowed to 8.6% from 8.9%, the N.Y. Fed survey showed. “While overall delinquency rates have remained stable at relatively low levels, transition rates into delinquency have fallen noticeably for student loan over the past year, reflecting an improved labor market and increased participation in various income-driven repayment plans,” Wilbert van der Klaauw, senior vice president at the New York Fed, said in a statement.

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The Big Tech mix with intelligence and military takes on scary forms.

Has Bezos Become More Powerful In DC Than Trump? (VF)

There’s a new scandal quietly unfolding in Washington. It’s far bigger than Housing Secretary Ben Carson buying a $31,000 dinette set for his office, or former EPA chief Scott Pruitt deploying an aide to hunt for a deal on a used mattress. It involves the world’s richest man, President Trump’s favorite general, and a $10 billion defense contract. And it may be a sign of how tech giants and Silicon Valley tycoons will dominate Washington for generations to come. The controversy involves a plan to move all of the Defense Department’s data—classified and unclassified—on to the cloud. The information is currently strewn across some 400 centers, and the Pentagon’s top brass believes that consolidating it into one cloud-based system, the way the CIA did in 2013, will make it more secure and accessible.

That’s why, on July 26, the Defense Department issued a request for proposals called JEDI, short for Joint Enterprise Defense Infrastructure. Whoever winds up landing the winner-take-all contract will be awarded $10 billion—instantly becoming one of America’s biggest federal contractors. But when JEDI was issued, on the day Congress recessed for the summer, the deal appeared to be rigged in favor of a single provider: Amazon. According to insiders familiar with the 1,375-page request for proposal, the language contains a host of technical stipulations that only Amazon can meet, making it hard for other leading cloud-services providers to win—or even apply for—the contract. One provision, for instance, stipulates that bidders must already generate more than $2 billion a year in commercial cloud revenues—a “bigger is better” requirement that rules out all but a few of Amazon’s rivals.

What’s more, the process of crafting JEDI bears all the hallmarks of the swamp that Trump has vowed to drain. Though there has long been talk about the Defense Department joining the cloud, the current call for bids was put together only after Defense Secretary James Mattis hired a D.C. lobbyist who had previously consulted for Amazon. The lobbyist, Sally Donnelly, served as a top advisor to Mattis while the details of JEDI were being hammered out. During her tenure, Mattis flew to Seattle to tour Amazon’s headquarters and meet with Jeff Bezos. Then, as the cloud-computing contract was being finalized, Donnelly’s former lobbying firm, SBD Advisors, was bought by an investment fund with ties to Amazon’s cloud-computing unit.

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Not enough. He should have refused to sign.

Trump Criticizes Some Russia Provisions Of Defense Bill (USAT)

At a bill signing ceremony in New York on Monday, President Donald Trump took credit for a $716 billion defense policy bill that he said would strengthen America’s military. “I am very proud to be a big, big part of it,” he said. “It was not very hard.” In a written statement hours later, Trump raised objections to 52 provisions of the law – including four of the eight provisions dealing specifically with Russia. The signing statement suggests he may not enforce provisions that he said raise constitutional concerns. As passed by Congress, the defense bill attempts to tie the president’s hands on Russia in a number of ways. It forbids him from using federal funds to recognize Russian control over Crimea and bans military cooperation with Russia until Russia pulls out of Ukraine.

It requires him to report back to Congress on steps he has taken to address Russian violations of the Open Skies Treaty, which allows reconnaissance flights over Russian territory, and the New START Treaty on nuclear weapons. Trump said those provisions undermine the president’s role “as the sole representative of the nation in foreign affairs.” Trump objected to a section requiring him to send to Congress a strategy to combat “malign foreign influence operations and campaigns.” That strategy, he said, is covered by executive privilege. Though presidential objections in signing statements are not uncommon, Trump’s pushback on Russia-related provisions is notable given his attempts to forge closer relations with Russian President Vladimir Putin [..]

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“If we fail to pay, the Chinese may come and take our assets, which are our buildings.”

Tonga PM Calls On China To Write Off Pacific Debt (AFP)

Tonga Prime Minister Akalisi Pohiva has called for China to write-off debts owed by Pacific island countries, warning that repayments impose a huge burden on the impoverished nations. Chinese aid in the Pacific has ballooned in recent years with much of the funds coming in the form of loans from Beijing’s state-run Exim Bank. Tonga has run-up enormous debts to China, estimated at more than US$100 million by Australia’s Lowy Institute think tank, and Pohiva said his country would struggle to repay them. He said the situation was common in the Oceania region and needed to be addressed at next month’s Pacific Island Forum summit in Nauru. “We need to discuss the issue,” he told the Samoa Observer in an interview published on Tuesday.

“All the Pacific Island countries should sign this submission asking the Chinese government to forgive their debts. “To me, that is the only way we can all move forward, if we just can’t pay off our debts.” Tonga took out the Chinese loans to rebuild in the wake of deadly 2006 riots that razed the centre of the capital Nuku’alofa. Beijing has previously refused to write-off the loans by turning them into aid grants but did give Tonga an amnesty on repayments. Pohiva said China now wanted the debts repaid. “By September 2018, we anticipate to pay $14 million, which cuts away a huge part of our budget,” he said. Tonga’s ability to pay has been further dented this year by another massive rebuilding effort in Nuku’alofa, this time after a category five cyclone slammed into the capital in February.

“If we fail to pay, the Chinese may come and take our assets, which are our buildings.” “That is why the only option is to sign a submission asking the Chinese government to forgive our debts.” His comments come as Australia and New Zealand ramp up aid efforts in the Pacific to counter China’s growing presence in the region. Australia has raised fears in recent months Pacific nations’ debts to China leaves them susceptible to Beijing’s influence.

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Not sure climate scientisis talking economics will be taken seriously.

“Hothouse Earth” And Neoliberal Economics (IC)

[..] embedded within the paper is a finding that’s just as stunning: that none of this is inevitable, and one of the main barriers between us and a stable planet — one that isn’t actively hostile to human civilization over the long term — is our economic system. Asked what could be done to prevent a hothouse earth scenario, co-author Will Steffen told The Intercept that the “obvious thing we have to do is to get greenhouse gas emissions down as fast as we can. That means that has to be the primary target of policy and economics. You have got to get away from the so-called neoliberal economics.” Instead, he suggests something “more like wartime footing” to roll out renewable energy and dramatically reimagine sectors like transportation and agriculture “at very fast rates.”

That “wartime footing” Steffen describes is a novel concept in 2018, but hasn’t been throughout American history when the nation has faced other existential threats. In the lead-up to World War II, the government played a heavy hand in industry, essentially shifting the U.S. to a centrally planned economy, rather than leaving things like prices and procurement of key resources up to market forces. By the end of World War II, about a quarter of all manufacturing in the United States had been nationalized. And while governments around the world continue to intervene heavily in the private sector — including in the U.S. — those interventions tend now to be on behalf of corporations, be it through subsidies to fossil fuel companies or zoning laws that favor luxury real estate developers.

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Who are you educating? A kindergarten?

We’re In A New Age Of Obesity. How Did It Happen? (Monbiot)

The light begins to dawn when you look at the nutrition figures in more detail. Yes, we ate more in 1976, but differently. Today, we buy half as much fresh milk per person, but five times more yoghurt, three times more ice cream and – wait for it – 39 times as many dairy desserts. We buy half as many eggs as in 1976, but a third more breakfast cereals and twice the cereal snacks; half the total potatoes, but three times the crisps. While our direct purchases of sugar have sharply declined, the sugar we consume in drinks and confectionery is likely to have rocketed (there are purchase numbers only from 1992, at which point they were rising rapidly. Perhaps, as we consumed just 9kcal a day in the form of drinks in 1976, no one thought the numbers were worth collecting.) In other words, the opportunities to load our food with sugar have boomed.

As some experts have long proposed, this seems to be the issue. The shift has not happened by accident. As Jacques Peretti argued in his film The Men Who Made Us Fat, food companies have invested heavily in designing products that use sugar to bypass our natural appetite control mechanisms, and in packaging and promoting these products to break down what remains of our defences, including through the use of subliminal scents. They employ an army of food scientists and psychologists to trick us into eating more than we need, while their advertisers use the latest findings in neuroscience to overcome our resistance.

They hire biddable scientists and thinktanks to confuse us about the causes of obesity. Above all, just as the tobacco companies did with smoking, they promote the idea that weight is a question of “personal responsibility”. After spending billions on overriding our willpower, they blame us for failing to exercise it.

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Stop making the stuff.

More Recycling Won’t Solve Plastic Pollution (SciAm)

The real problem is that single-use plastic—the very idea of producing plastic items like grocery bags, which we use for an average of 12 minutes but can persist in the environment for half a millennium—is an incredibly reckless abuse of technology. Encouraging individuals to recycle more will never solve the problem of a massive production of single-use plastic that should have been avoided in the first place. Beginning in the 1950s, big beverage companies like Coca-Cola and Anheuser-Busch, along with Phillip Morris and others, formed a non-profit called Keep America Beautiful. Its mission is/was to educate and encourage environmental stewardship in the public. Joining forces with the Ad Council (the public service announcement geniuses behind Smokey the Bear and McGruff the Crime Dog), one of their first and most lasting impacts was bringing “litterbug” into the American lexicon through their marketing campaigns against thoughtless individuals.

Two decades later, their “Crying Indian” PSA, would become hugely influential for the U.S. environmental movement. In the ad, a Native American man canoes up to a highway, where a motorist tosses a bag of trash. The camera pans up to show a tear rolling down the man’s cheek. By tapping into a shared national guilt for the history of mistreatment of Native Americans and the sins of a throwaway society, the PSA became a powerful symbol to motivate behavioral change. More recently, the Ad Council and Keep America Beautiful teams produced the “I Want to Be Recycled” campaign, which urges consumers to imagine the reincarnation of shampoo bottles and boxes, following the collection and processing of materials to the remolding of the next generation of products.

At face value, these efforts seem benevolent, but they obscure the real problem, which is the role that corporate polluters play in the plastic problem. This clever misdirection has led journalist and author Heather Rogers to describe Keep America Beautiful as the first corporate greenwashing front, as it has helped shift the public focus to consumer recycling behavior and actively thwarted legislation that would increase extended producer responsibility for waste management.

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EU inertia.

Glyphosate Is Here To Stay In EU – At Least For Now (Pol.eu)

Monsanto’s glyphosate-based weedkiller will be used in Europe for years to come, legal experts and campaigners say, despite a U.S. court ruling the company should pay $289 million in damages for causing cancer. The EU last year renewed use of the controversial weedkiller for another five years after a yearslong political debate over its safety and impact on the environment. That means Europe will have to wait until the end of 2022 at the earliest before making any attempt to ban the substance outright. Campaigners also say the mounting legal pressure Monsanto faces in the U.S. from thousands of other plaintiffs filing suits against the company is unlikely to be replicated in Europe, namely because Europe doesn’t have the same legal mechanism of a class action lawsuit as the U.S.

“I’m not very confident that the decision in the U.S. will expedite a ban in Europe as it’s a complicated legal process that takes time,” said Arnaud Apoteker, managing director of the NGO Justice Pesticides. “Countries could go back to the Commission to say that the proposal [to renew glyphosate] could be re-tabled, but this is a very lengthy process.” Apoteker has compiled all lawsuits involving pesticides into a single database and has so far only discovered two made against Monsanto in the EU. One dates back to 2007 and was filed by a farmer named Paul François, who alleged Monsanto’s Lasso herbicide caused his chronic illness and that the product was inadequately labeled. The other was filed at a court in Lyon last year by Sabine Grataloup, who accuses Monsanto’s Roundup weedkiller of causing severe malformations in her 11-year-old son Théo.

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What’s not to love?

Help Me, My Prince: Guernsey Resident Halts Roadworks With Ancient Plea (G.)

A woman has activated the ancient Norman rite of Clameur de Haro to protest against the narrowing of a road which she claims would endanger pedestrians and motorists. Rosie Henderson, from Guernsey, raised the clameur by kneeling and calling for help and reciting the Lord’s Prayer in Norman French. Fully enforceable in Guernsey and Jersey law, it means the construction work in St Peter Port must stop until a court decides the case. Henderson, a parish councillor, raised the clameur on Tuesday by the roads of Les Échelons and South Esplanade, near the construction site. The clameur states: “Haro! Haro! Haro! A l’aide, mon prince, on me fait tort”, translated as “Come to my aid, my prince, for someone does me wrong”.

Whoever calls the clameur has 24 hours to register it in court, but whoever it is called against must stop all work immediately. Legend says the raising of a clameur stretches back to the early Norman period in the Channel Islands and is thought to have been a plea to Rollo, the first Duke of Normandy. The feudal law dates back to the 10th century as a form of self-policing when there was no law enforcement. In 2016, plans to overhaul St Peter Port’s sunken gardens, by levelling the site with the street and moving the war memorial, were withdrawn after protesters pledged to use the Clameur de Haro to block the proposals.

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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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