Jun 252016
 
 June 25, 2016  Posted by at 8:26 am Finance Tagged with: , , , , , , , ,  


Harris&Ewing Underwood Typewriter Co., Washington, DC 1919

World’s 400 Richest People Lose $127 Billion on Brexit (BBG)
Global Markets Lose $2.1 Trillion In Brexit Rout (AFP)
[Friday Was] The Appetizer For Monday (ZH)
Alan Greenspan Says Brexit Is The ‘Tip Of The Iceberg’ For Europe (MW)
Bravo Brexit! (David Stockman)
The Sky Has Not Fallen After Brexit But We Face Years Of Hard Labour (AEP)
They Got It Wrong: Swarms of Global Chatterers Misread Brexit (BBG)
UK ‘Leave’ Vote Deflates Hopes For TTIP (R.)
Chinese Bankruptcies Surge More Than 50% In Q1; Worse To Come (ZH)
A Look At The Global Economic Malaise Through Deutsche Bank (MW)
Electoral Surge Of Far Left Likely To Shake Up Spanish Politics (R.)
Regling: Varoufakis’ FinMin Tenure Cost Greece €100 Billion (Kath.)
Hillary Clinton Adopts The Shorthand Of The Hyperinflation Fearmongers (Dayen)
Rural Pennsylvanians Say Fracking ‘Just Ruined Everything’ (CPI)
Italy Coastguard Rescues 7,100 In Mediterranean In Two Days (G.)

Try and feel sorry. I dare you.

World’s 400 Richest People Lose $127 Billion on Brexit (BBG)

The world’s 400 richest people lost $127.4 billion Friday as global equity markets reeled from the news that British voters elected to leave the European Union. The billionaires lost 3.2% of their total net worth, bringing the combined sum to $3.9 trillion, according to the Bloomberg Billionaires Index. The biggest decline belonged to Europe’s richest person, Amancio Ortega, who lost more than $6 billion, while nine others dropped more than $1 billion, including Bill Gates, Jeff Bezos and Gerald Cavendish Grosvenor, the wealthiest person in the U.K.

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Meaningless. If the euro loses against the dollar, what is lost exactly? Besides, it’s all virtual overkill anyway.

Global Markets Lose $2.1 Trillion In Brexit Rout (AFP)

Britain’s shock vote to pull out of the European Union wiped $2.1 trillion from global equity markets Friday as traders panicked in the face of a new threat to the global economy. Investors fled to the safety of gold, the yen and blue-chip bonds as the seismic shift in the structure of Europe left many huge questions hanging, including who will lead Britain following the resignation of Prime Minister David Cameron. The Brexit vote sparked 8% losses in the Tokyo and Paris bourses, nearly 7% in Frankfurt and more than 3% in London and New York. Central banks stepped in to bolster confidence, promising to inject liquidity where needed and appearing to mitigate some of the sharpest losses.

Still, the pound crashed 10% to a 31-year low at one point, before rebounding slightly for a 9.1% loss against the greenback in late trade. The euro also plummeted, dropping 2.6% on the dollar. Benefitting from a massive safety selloff, gold jumped nearly 5% and the yen surged 4.2% against the dollar and 7.0% on the euro. The dollar at one point fell below 100 yen for the first time since November 2013. US 10-year treasury bond yields hit their lowest since 2012 at 1.42% before edging higher, while the German 10-year bund fell into negative territory for the second time in history.

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Try Italian banks: “..Monday is where we’re going to see a truer-look at “where the bodies are buried” and a more accurate “price discovery” process than what we’re seeing today..”

[Friday Was] The Appetizer For Monday (ZH)

RBC’s Charlie McElligott: “I do feel that Monday is where we’re going to see a truer-look at “where the bodies are buried” and a more accurate “price discovery” process than what we’re seeing today (as we’re washing out all the delta one flows which are dwarfing client trading)…lots of discipline being displayed thus far, with low turnovers and folks not chasing.

FTSE (UKX, benchmark equities index) is an absolute CHAMP right, trading -8.7% within the first 10 minutes of the open before clawing-back to all but -1.9% at ‘highs.’ Wrap your head around this: week-to-date, UKX is up over 2.8%! What’s the driver of today’s massive rally? People are getting their arms around the impact of this extraordinarily weak Sterling as a backdoor stimulus for exporters (ironic the power of what a departure from the EU can do vs what x # of kagillions of QE purchases couldn’t get done) and the inevitable rate cut from the BoE.

What I have to continue keeping one eyeball on is SX7E (EU banks index); the thing cannot get off mat. And if that can’t get off the mat, peripheries (and their sovereign debt) won’t either, as we re-enter the EU-crisis-era “Doom Loop” where widening sovereign spreads drag down the banks who are stuffed to the gills with them….vicious cycle, what else is new. FWIW, as I write and we’ve had this massive bounce in equities, Italian stocks (FTSEMIB) are back at their lows. This will likely be the next “hot zone” as we begin playing EU existential dominos (Spanish elections Sunday too).

My model Equity L/S portfolio is -285bps today. That is NOT cool. Elsewhere, from a thematic or factor perspective, we see the implications we spoke about earlier of the RAGINGLY STRONGER DOLLAR smashing the reflation / cyclical beta trade (value, energy, beta all struggling, while momentum mkt neutral works with defensive longs + and fins / biotech / energy -)”

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Of his own making.

Alan Greenspan Says Brexit Is The ‘Tip Of The Iceberg’ For Europe (MW)

The global economy is suffering from even bigger woes than the decision by U.K. voters to leave the European Union, Former Federal Reserve Chairman Alan Greenspan said Friday. ”This is just the tip of the iceberg,” Greenspan said in an interview on CNBC. “The global economy is in real serious trouble.” The rejection of British voters of the status quo in Europe was fueled by a “massive slowing” in the growth rate of real incomes that is widespread across Europe, Greenspan said. This, he said, is creating serious political problems that are not easy to resolve. Behind the slowdown in income is the sharp drop in worker productivity, according to Greenspan. Governments have to cut entitlements to reflect this weakness, he said.

The biggest concern is not a recession, but stagnation, the former Fed chief said. “The euro-area…is failing,” Greenspan said. “Greece is in real serious trouble and it is not going to continue in the euro very much longer irrespective of what is going on currently,” he said. Asked what he would do if he was still Fed chief, Greenspan said: “I would worry.” “This is the worst period I recall since I’ve been in public service,” he said. “There is nothing like it,” he said, including the 23% drop in the Dow Jones Industrial Average on a single day in October 1987.

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“..there will be payback, clawback and traumatic deflation of the bubbles. Plenty of it, as far as the eye can see.”

Bravo Brexit! (David Stockman)

At long last the tyranny of the global financial elite has been slammed good and hard. You can count on them to attempt another central bank based shock and awe campaign to halt and reverse the current sell-off, but it won’t be credible, sustainable or maybe even possible. The central banks and their compatriots at the EU, IMF, White House/Treasury, OECD, G-7 and the rest of the Bubble Finance apparatus have well and truly over-played their hand. They have created a tissue of financial lies; an affront to the very laws of markets, sound money and capitalist prosperity. So there will be payback, clawback and traumatic deflation of the bubbles. Plenty of it, as far as the eye can see.

On the immediate matter of Brexit, the British people have rejected the arrogant rule of the EU superstate and the tyranny of its unelected courts, commissions and bureaucratic overlords. As Donald Trump was quick to point out, they have taken back their country. He urges that Americans do the same, and he might just persuade them. But whether Trumpism captures the White House or not, it is virtually certain that Brexit is a contagious political disease. In response to today’s history-shaking event, determined campaigns for Frexit, Spexit, NExit, Grexit, Italxit, Hungexit and more centrifugal political emissions will next follow. Smaller government – at least in geography – is being given another chance. And that’s a very good thing because more localized democracy everywhere and always is inimical to the rule of centralized financial elites.

The combustible material for more referendums and defections from the EU is certainly available in surging populist parties of both the left and the right throughout the continent. In fact, the next hammer blow to the Brussels/German dictatorship will surely happen in Spain’s general election do-over on Sunday (the December elections resulted in paralysis and no government). When the polls close, the repudiation of the corrupt, hypocritical lapdog government of Prime Minister Rajoy will surely be complete. And properly so; he was just another statist in conservative garb who reformed nothing, left the Spanish economy buried in debt and gave false witness to the notion that the Brussels bureaucrats are the saviors of Europe. So the common people of Europe may be doubly blessed this week with the exit of both David Cameron and Mariano Rajoy. Good riddance to both.

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“..It was the first episode of a pan-Europe uprising against the Caesaropapism of the EU Project and its technocrat priesthood.”

The Sky Has Not Fallen After Brexit But We Face Years Of Hard Labour (AEP)

It is time for Project Grit. We warned over the final weeks of the campaign that a vote to leave the EU would be traumatic, and that is what the country now faces as markets shudder and Westminster is thrown into turmoil. The stunning upset last night marks a point of rupture for the post-war European order. It will be a Herculean task to extract Britain from the EU after 43 years enmeshed in a far-reaching legal and constitutional structure. Scotland and Northern Ireland will now be ejected from the EU against their will, a ghastly state of affairs that could all too easily lead to the internal fragmentation of the Kingdom unless handled with extreme care. The rating agencies are already pricing in a different British destiny. Standard & Poor’s declared that Brexit “spells the end” of the UK’s AAA status.

The only question is whether the downgrade is one notch or two, and that hangs on Holyrood. Moody’s has cocked the trigger too. Just how traumatic Brexit will be depends on whether Parliament can rise to the challenge and fashion a credible trade policy – so far glaringly absent – to safeguard access to European markets and ensure the viability of the City, and it depends exactly how Brussels, Berlin, Paris, Rome, Madrid, and Warsaw react once the dust settles. Both sides are handling nitroglycerin. Angry reproaches are flying in all directions, but let us not forget that the root cause of this unhappy divorce is the conduct of the EU elites themselves. It is they who have pushed Utopian ventures, and mismanaged the consequences disastrously.

It is they who have laid siege to the historic nation states, and who fatally crossed the line of democratic legitimacy with the Lisbon Treaty. This was bound to come to a head, and now it has. The wild moves in stocks, bonds, and currencies this morning were unavoidable, given the positioning of major players in the market, and given that the Treasury, the IMF, and the Davos brotherhood have been deliberately – in some cases recklessly – stirring up a mood of generalized fear.

[..] Some in Europe accuse the British people of strategic nihilism, of setting in motion the disintegration of the EU. It is true that French, Dutch, Italian, and Swedish eurosceptics are now agitating even more loudly for their own referenda, but voters are rising up across the EU in defence of national self-government and cultural ‘terroir’ for parallel reasons. Brexit is not the cause and this is not contagion. The latest PEW survey shows that anger with Brussels is just as great in most of Northwest Europe as it is Britain, and in France it is higher at 61pc. This referendum was never a fight between Britain and Europe, as so widely depicted. It was the first episode of a pan-Europe uprising against the Caesaropapism of the EU Project and its technocrat priesthood. It will not be the last.

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No-one got it more wrong than the bookmakers. At least, what they said.

They Got It Wrong: Swarms of Global Chatterers Misread Brexit (BBG)

A global cohort said before Thursday’s Brexit vote that Britain was unlikely to pull out of the European Union, the post-World War II international project that brought an unprecedented era of prosperity and peace. Yet some were led astray by the belief that free trade’s money and material goods outweighed nationalism and the tug of nostalgia. Conservative U.K. Prime Minister David Cameron called the referendum, presumably confident he would win. He lost, and he’s now resigning. “Brits don’t quit,” Cameron said in an impassioned plea on Tuesday to voters to support remaining in the EU. “We get involved, we take a lead, we make a difference, we get things done.” The Brits quit.

Opinion polls on Brexit were all over the place; the theoretical lead had changed hands dozens of times since September, although “leave” never reached 50% support. Still, betting odds put the chance of remaining at 90% as the polls closed on Thursday. Ladbrokes was offering 4-to-1 on a leave vote, according to The Guardian. Even though most players in the market were actually backing leave, more money was bet on remain by the affluent, who were generally behind staying, Matthew Shaddick, head of political betting at Ladbrokes, wrote in a blog post. Bookies are trying to make money, not help people forecast results, so the vote worked out fine for Ladbrokes, he said.

“Is this just one of the inevitable, normal occasions where an outsider wins, or a fatal blow to the idea of betting markets as being a useful forecasting tool?” Shaddick said. “Maybe unsurprisingly, I tend to think the former, but that doesn’t mean we don’t have to reflect on all of their potential flaws and decide how we best interpret them in the future.” The London-based Political Studies Association surveyed members, journalists, academics and pollsters from May 24 to June 2. Every group got it wrong. Overall, 87% of respondents said Britain was more likely to stay in the EU, 5% said it was likely to leave, and 8% said both sides had an exactly equal chance. The predicted probability of Britain voting to leave the EU: academics, 38%; pollsters, 33%; journalists, 32%; other, 38%; mean, 38%.

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The advantages keep coming in.

UK ‘Leave’ Vote Deflates Hopes For TTIP (R.)

Britain’s looming exit from the European Union is another huge setback for negotiations on a massive U.S.-EU free trade deal that were already stalled by deeply entrenched differences and growing anti-trade sentiment on both sides of the Atlantic. The historic divorce launched by Thursday’s vote will almost certainly further delay substantial progress in the Transatlantic Trade and Investment Partnership (TTIP) talks as the remaining 27 EU states sort out their own new relationship with Britain, trade experts said on Friday. With French and German officials increasingly voicing skepticism about TTIP’s chances for success, the United Kingdom’s departure from the deal could sink hopes of a deal before President Barack Obama leaves office in January.

“This is yet another reason why TTIP will likely be postponed,” said Heather Conley, European program director at the Center for Strategic and International Studies, a think tank in Washington. “But to be honest, TTIP isn’t going anywhere, I believe, before 2018 at the earliest,” she said. U.S. Trade Representative Michael Froman said in a statement on Friday that he was evaluating the UK decision’s impact on TTIP, but would continue to engage with both European and UK counterparts. “The importance of trade and investment is indisputable in our relationships with both the European Union and the United Kingdom,” Froman said. “The economic and strategic rationale for TTIP remains strong.”

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Xi can no longer hold off the tide. Q1: what happens to the unemployed? Q2: how are the shadow banks paid off?

Chinese Bankruptcies Surge More Than 50% In Q1; Worse To Come (ZH)

Two months ago, when looking at the soaring number of bond issuance cancellations and postponements as calculated by BofA, we commented that it was only a matter of time before the long overdue tide of corporate defaults, held by for so many years by the Chinese government which would do anything to delay the inevitable, was about to be unleashed. This prediction has indeed been validated and as the FT reports overnight, Chinese bankruptcies have surged this year “as the government uses the legal system to deal with “zombie” companies and reduce industrial overcapacity as part of a broader effort to restructure the economy.”

In just the first quarter of 2016, Chinese courts have accepted 1,028 bankruptcy cases, up a whopping 52.5% from a year earlier, according to the Supreme People’s Court. Just under 20,000 cases were accepted in total between 2008 and 2015. This is surprising because while China’s legislature had approved a modern bankruptcy law in 2007 it had barely been used for years, with debt disputes often handled through backroom negotiations involving local governments. “Bankruptcy isn’t just about creditor-borrower relations. It also touches on social issues like unemployment,” said Wang Xinxin, director of the bankruptcy research centre at Renmin University law school in Beijing. “For a long time many local courts weren’t willing to accept them, or local governments didn’t let them accept.”

However, following the dramatic collapse of global commodity prices, which as we showed last October meant that more than half of local companies could not afford to even make one coupon payment with cash from operations, Beijing had no choice but to throw in the towel. And as the FT adds, “bankruptcy courts have been recruited into China’s drive for “supply-side reform”, which centres on reduction of overcapacity in sectors such as steel, coal and cement.”

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Deflation.

A Look At The Global Economic Malaise Through Deutsche Bank (MW)

I like to keep an eye on major financials, as they are the backbone of the global economy. If the banks have problems, not much else will be doing all that great from a macro perspective. I know there are serious issues with European financials, as collapsing (and in some cases negative) government-bond yields, coupled with negative short-term policy rates, have basically shrunk their net-interest margins as their loans are priced off those rates. The same is the case in Japan. In the U.S, despite a massive flattening of the Treasury yield curve, we have so far been spared from this rather unfortunate banking situation.

So I punched out the ticker “DB” on my screen two Fridays ago and looked at the TV before the chart would load. I looked back at the screen, and I thought I had made a mistake as sometimes the web browser will “remember” ticker symbols on the drop-down quote menu and occasionally the wrong chart would load. It had to be a mistake, as I was looking at the 10-year Treasury yield chart that was just shown on the TV screen seconds earlier, with some futures trader making the comment that the U.S. Treasury market was “breaking out.” I looked closer, and I was stunned. There was no mistake. To that moment, I had not realized that Deutsche Bank’s stock was tracking the 10-year Treasury note yield almost tit for tat. If the Treasury market is breaking out, that would mean Deutsche Bank stock is breaking down, I thought.

It did not take long to figure out why the stock of a major global financial firm — DB, the largest bank in Germany — would follow the 10-year U.S. Treasury yield so closely. As I have explained on numerous occasions in this column, I think we face a global deflationary problem. There are numerous implications for this, but economic growth cycles driven by too much borrowing in the developed world and in many emerging markets — the largest of which is China — are causing that mountain of debt to catch up with faltering economies. Falling long-term U.S. interest rates at a time when the Federal Reserve has not officially given up on a hopelessly-misguided rate-hiking cycle are a symptom of this global deflation.

Banks tend to perform very poorly in a deflationary environment as weak nominal corporate revenues make servicing debts problematic and lending growth tends to suffer. In a deflationary environment, the real value of debts rises as they stay nominally constant; but the assets those debts are financing tend to fall in price, causing rising non-performing loan (NPL) ratios. Combine this with the unorthodox global QE monetary policies and negative short-term interest rates, and you have collapsing net interest margins for many global banks like Deutsche Bank as many yield curves globally, including the one in Germany, have vanished.

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One more technocrat government gone on Monday?

Electoral Surge Of Far Left Likely To Shake Up Spanish Politics (R.)

The parched olive groves and tranquil towns of Spain’s southern Cordoba province are an unlikely backdrop for a political upset that could reverberate across Europe. Yet some locals like 57-year-old Lorenzo Molina, an unemployed librarian, hope they can help deliver just that in a fresh nationwide election on June 26 following an inconclusive December ballot. Gains for an anti-austerity alliance led by the young Podemos party in tightly-contested provinces like this could tip the balance in its bid to lead the next government, and this could turn Spain into the European Union’s next headache after Britain’s June 23 referendum on EU membership. A surge into second place for Unidos Podemos (“Together We Can”) ahead of Spain’s Socialists would make the far-left front a serious contender to form a coalition government, cementing the decline of Spain’s once-mighty center-left in the process.

After radical leftist Syriza’s success in crushing the social democratic Pasok in Greece, a Podemos breakthrough could also buoy euro-skeptic anti-establishment movements in the likes of Italy or France as worsening inequality fuels discontent. For Molina, a dyed-in-the-wool backer of the ex-communists now part of the leftist alliance, it’s a momentous prospect after decades on the fringes of Spanish politics, hankering after this so-called “sorpasso” (eclipse) of the Socialists. “It’s time to air things out,” Molina said on a balmy evening in the city of Cordoba, as an eclectic mix of families and people waving hammer and sickle flags arrived at a rally in a local park. “The Socialists have been in charge of our institutions for many years,” he added, as cries of “Yes we can” rang out among the crowd of several hundred.

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The cost of not doing what you’re told. Take heed, Britain and everyone else. All your base are belong to us.

Regling: Varoufakis’ FinMin Tenure Cost Greece €100 Billion (Kath.)

The cost of Yanis Varoufakis’s tenure as Greece’s Finance Minister during the January-August 2015 period was estimated at around €100 billion, Klaus Regling, head of the European Financial Stability Facility (EFSF) and first managing director of the European Stability Mechanism, told Skai TV. In the interview that aired on Wednesday, Regling noted that during the Varoufakis era, relations between Greece and its lenders were not good, that reforms were halted and that the overall situation at the time did not serve the interests of the Greek economy.

Regling also urged the current Greek government to stick to agreed reforms and noted that the next two months would see negotiations between Greece and its creditors regarding changes in the country’s labor laws, among others, before a second review of the country’s bailout program in September. Regling also argued that some members of the coalition administration did not seem committed to the bailout program, particularly with regard to privatizations and the privatization fund. On the subject of debt relief for Greece, Regling noted that the institutions had agreed on principle, but disagreed over the time frame.

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“..Alan Greenspan, former chair of the Federal Reserve, echoed Trump’s comments almost verbatim back in 2011, when the U.S. came close to reaching the debt limit. “The United States can pay any debt it has because we can always print money to do that..”

Hillary Clinton Adopts The Shorthand Of The Hyperinflation Fearmongers (Dayen)

Deficit hawks often raise the specter of hyperinflation to scare people who disagree with them. And that’s exactly what Hillary Clinton did on Tuesday. Speaking in Columbus, Clinton criticized Donald Trump for saying last month that the U.S. can never default on its debt obligations “because you print the money.” “We know what happened to countries that tried that in the past, like Germany in the ‘20s and Zimbabwe in the ‘90s,” Clinton said. “It drove inflation through the roof and crippled their economies.” But printing money — otherwise known as increasing the money supply – is a routine occurrence for governments that control their own currency.

The Federal Reserve has increased its balance sheet by over $3 trillion since the financial crisis, explicitly to support the economy. (The Fed does this by buying stocks and bonds with electronic cash that didn’t exist before.) In fact, an increasingly influential school of economics, known as Modern Monetary Theory, argues that deficit spending, including through money printing, is critical to promote full employment. Even Alan Greenspan, former chair of the Federal Reserve, echoed Trump’s comments almost verbatim back in 2011, when the U.S. came close to reaching the debt limit. “The United States can pay any debt it has because we can always print money to do that,” Greenspan told “Meet the Press.”

“If you think about it, it is precisely this power that makes U.S. Treasuries [T-Bonds] so safe in the first place,” said Stephanie Kelton, an economics professor at the University of Missouri-Kansas City and a former chief economist to Bernie Sanders on the Senate Budget Committee. Kelton is one of the leading proponents of Modern Monetary Theory. But deficit hawks – typically members of the economic elite who favor small government and correspondingly low taxes, and are terrified of the effect inflation would have on their investments and cash reserves — have repeatedly warned that these perfunctory monetary policy actions would lead to Weimar Germany-levels of chaos.

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A mess in the name of Mammon.

Rural Pennsylvanians Say Fracking ‘Just Ruined Everything’ (CPI)

Sixty years after his service in the Army, Jesse Eakin still completes his outfits with a pin that bears a lesson from the Korean War: Never Impossible. That maxim has been tested by a low-grade but persistent threat far different than the kind Eakin encountered in Korea: well water that’s too dangerous to drink. It gives off a strange odor and bears a yellow tint. It carries sand that clogs faucets in the home Eakin shares with his wife, Shirley, here in southwestern Pennsylvania. The Eakins told the state environmental agency about their bad water nearly seven years ago and hoped for a quick resolution. Like thousands of others who live in the natural gas-rich Marcellus Shale, however, they learned their hopes were misplaced.

Today, the state is still testing their water. The results of those tests will dictate whether a gas exploration and production company is held responsible for providing them with a clean supply. Meanwhile, the Eakins drink donated bottled water and in late 2014 began paying for deliveries of city water to avoid showering in contaminants such as lead and manganese. Since 2007, at least 2,800 water-related complaints have been investigated by the Pennsylvania Department of Environmental Protection’s Oil and Gas Program. Officials found ties to the drilling industry in 279. Another 500 or so cases, including the Eakins’, are open. While regulators try to catch up to natural gas exploration, some residents of the state have gone months, even years, without access to clean water at their homes.

Responding to a public-records request by the Center for Public Integrity, the Department of Environmental Protection, or DEP, provided data on 1,840 complaints lodged since 2010. More than half took longer than the agency’s target of 45 days to resolve. Almost one in 10 took more than a year. The state’s often-plodding response has left hundreds of rural Pennsylvanians in a sort of forced drought, scrambling to pay for water deliveries, seek remedies in court, take out second mortgages or even abandon their homes.

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Off the top of my head, over 150,000 landed in Italy so far this year. And Germany has a backlog of 450,000 asylum applications.

Italy Coastguard Rescues 7,100 In Mediterranean In Two Days (G.)

Ship crews have pulled more than 2,000 refugees from overcrowded boats in the Mediterranean, Italy’s coastguard has said, as people-smugglers stepped up operations during two consecutive days of good weather. More than 7,100 people have now been rescued from international waters since Thursday, many of them on the dangerous journey from Libya. Europe’s worst immigration crisis since the second world war is in its third year, and there has been little sign of any let-up in the flow of people coming from North African to Italy.

Ships belonging to Doctors without Borders, Migrant Offshore Aid Station, Italy’s navy, the EU’s border agency Frontex and the bloc’s anti-people-smuggling mission Sophia all helped take the migrants off nine boats on Friday. About 60,000 boat refugees have been brought to Italy so far this year, according to the interior ministry.

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Jun 242016
 
 June 24, 2016  Posted by at 10:16 am Finance Tagged with: , , , , , , ,  


Stephen Green 18×24 inches. 2016. Acrylic on canvas. MuseumofAwesomeArt.com

Well, they did it. A majority of Britons made clear they’re so fed up with David Cameron and everything he says or does, including promoting the EU, that they voted against that EU. They detest Cameron much more than they like Nigel Farage or Boris Johnson. It seems that everyone has underestimated that.

Cameron just announced he’s stepping down. And that points to a very large hole in the ground somewhere in London town. Because going through a list of potential leaders, you get the strong impression there are none left. Not to run the country, and not to negotiate anything with Brussels. Which has a deep leadership -credibility- hole of itself, even though the incumbents are completely blind to that.

But first Britain. The Leave victory was as much a vote against Chancellor George Osborne as it was against Cameron. So Osborne is out as potential leader of the Conservatives. Boris Johnson? Not nearly enough people like him, and he fumbled his side of the Leave campaign so badly his credibility, though perhaps not being fully shot, is far too much of an uncertainty for the Tories to enter the upcoming inevitable general elections with.

Who else is there? Michael Gove? Absolute suicide. Likeability factor of zero Kelvin. That bus these guys drove around which proclaimed they could get £350 million extra a week for the NHS health care system in case of a Brexit will come back to haunt all of them. Just about the first thing Farage said earlier when the win became clear, was that the £350 million was a mistake.

I guess you could mention Theresa May, who apparently wants the post, but she’s an integral part of the Cameron clique and can’t be presented as the fresh start the party so badly needs.

 

Talking about Farage, who’s not Tory, but Ukip, he’s done what he set out to do, and that means the end of the line for him. He could, and will, call for a national unity government, but there is no such unity. He got voted out of a job today -he is/was a member of the European Parliament- and Ukip has only one seat in the British parliament, so he’s a bit tragic today. There is no place nor need for a UK Independence Party when the UK is already independent.

Then there’s Labour, who failed to reach their own constituency, which subsequently voted with Farage et al, and who stood right alongside Cameron for Remain, with ‘leader’ Jeremy Corbyn reduced to the role of a curiously mumbling movie extra. So Corbyn is out.

Shadow finance minister John McDonnell has aspirations, but he’s a firm Remain guy as well, and that happens to have been voted down. Labour has failed in a terrible fashion, and they better acknowledge it or else. But they already had a very hard time just coming up with Corbyn last time around, and the next twist won’t be any easier.

Cameron, Osborne, Corbyn, they have all failed to connect with their people. This is not some recent development. Nor is it a British phenomenon, support for traditional parties is crumbling away everywhere in the western world.

 

The main reason for this is a fast fading economy, which all politicians just try to hide from their people, but which those same people get hit by every single day.

A second reason is that politicians of traditional parties are not perceived as standing up for either their people nor their societies, but as a class in themselves.

In Britain, there now seems to be a unique opportunity to organize a movement like (Unidos) Podemos in Spain, the European Union’s next big headache coming up in a few days. Podemos is proof that this can be done fast, and there’s a big gaping hole to fill.

Much of what’s next in politics may be pre-empted in the markets. Though it’s hard to say where it all leads, this morning there’s obviously a lot of panic, short covering etc going on, fact is that as I write this, Germany’s DAX index loses 6% (-16.3% YoY), France’s CAC is down 7.7% (-18.5%) and Spain’s IBEX no less than 10.3% (-30%). Ironically, the losses in Britain’s FTSE are ‘only’ 4.5% (-11%).

These are numbers that can move entire societies, countries and political systems. But we’ll see. Currency moves are already abating, and on the 22nd floor of a well-protected building in Basel, all of the relevant central bankers in the world are conspiring to buy whatever they can get their hands on. Losses will be big but can perhaps be contained up to a point, and tomorrow is Saturday.

By the way, from a purely legal point of view, Cameron et al could try and push aside the referendum, which is not legally binding. I got only one thing on that: please let them try.

As an aside, wouldn’t it be a great irony if the England soccer (football) team now go on to win the Euro Cup? Or even Wales, which voted massively against the EU?

 

Finally, this was of course not a vote about the -perhaps not so- United Kingdom, it was a vote about the EU. But the only thing we can expect from Brussels and all the 27 remaining capitals is damage control and more high handedness. It’s all the Junckers and Tusks and Schäubles and Dijsselbloems are capable of anymore.

But it’s they, as much as David Cameron, who were voted down today. And they too should draw their conclusions, or this becomes not even so much about credibility as it becomes about sheer relevance.

Even well before there will be negotiations with whoever represents Britain by the time it happens, the Brussels court circle will be confronted with a whole slew of calls for referendums in other member states. The cat is out of Pandora’s bag, and the genie out of her bottle.

Many of the calls will come from the far-right, but it’s Brussels itself that created the space for these people to operate in. I’ve said it before, the EU does not prevent the next battle in Europe, it will create it. EC head Donald Tusk’s statement earlier today was about strengthening the union with the remaining 27 nations. As if Britain were the only place where people want out…

Holland, France, Denmark, Italy, Spain, Hungary, they will all have calls for referendums. Greece already had one a year ago. The center cannot hold. Nor can the system. If referendums were held in all remaining 27 EU member states, the union would be a lot smaller the next morning. The Unholy Union depends on people not getting a say.

The overwhelming underlying principle that we see at work here is that centralization is dead, because the economy has perished. Or at least the growth of the economy has, which is the same in a system that relies on perpetual growth to ‘function’.

But that is something we can be sure no politician or bureaucrat or economist is willing to acknowledge. They’re all going to continue to claim that their specific theories and plans are capable of regenerating the growth the system depends on. Only to see them fail.

It’s high time for something completely different, because we’re in a dead end street. If the Brexit vote shows us one thing, it’s that. But that is not what people -wish to- see.

Unfortunately, the kinds of wholesale changes needed now hardly ever take place in a peaceful manner. I guess that’s my main preoccupation right now.

 

Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
Yeats

Feb 122015
 
 February 12, 2015  Posted by at 4:02 pm Finance Tagged with: , , , , , ,  


Dorothea Lange Water supply in squatter camp near Calipatria CA 1937

It was already present over the past two weeks, for example in Yanis Varoufakis’ meetings with Eurogroup head Jeroen Dijsselbloem and German FinMin Schäuble, awkwardly obvious in facial expressions and body language. A touch of personal discomfort. A touch of a threat that required chest-thumping and hubris to be brushed off. ‘You better do what we say or else’. Back then, perhaps it was still experienced from a political, deal-making, perspective. But in the course of yesterday it became clear something has changed.

It has become personal, you could feel it in the air, and that raises the danger level considerably. It’s not personal from the Greek side; Alexis Tsipras and Varoufakis merely act according to – their interpretation of – the mandate handed them by their voters. It’s the other side(s) that have started making it personal. They see themselves, their positions, as being under attack. And they blame Greece’s new Syriza government for that. Which may seem logical at first blush, but that doesn’t make it true. The people sitting on the other side from Varoufakis have dug themselves into these positions.

Which, as they rightfully fear, are now threatened. Not because Syriza means to do so, but because they come to the table with that mandate, to put an end to what has caused Greece to sink as deep as it has. There’s nothing personal about that, it’s democracy at work, it’s politics. Still, it’s perceived as personal, because it makes the ‘old’ leadership uncomfortable. They haven’t seen it coming, they were convinced, all the way, that they would prevail. They mostly still are, but in a now much more nervous fashion.

It’s started to dawn on them that perhaps Syriza will not back down on its demands, that yet another – mostly superficial – political deal is not in the cards. CNBC reported last night that a deal on an extension of the existing bailout was near, and markets reacted quite strongly. It would appear, therefore, that both media and investors have been as deaf as the EU to what Syriza has been consistently saying, that it’s not interested in such an extension. It was never on the table, not from the Greek point of view.

Perhaps a headline such as yesterday’s ‘Greece Warned To Expect No Favors’ sums it up best. The EU side sees – or at least publicly presents – any negotiation with Greece as handing out favors, while Syriza says it doesn’t want any favors, it wants something that will give the Greek people back a future. And there is nothing that will make them not want that.

There is of course a fear within the EU that what is granted to Greece will eventually also have to be handed to other countries. Interestingly, though, the incumbent governments of the countries involved, Spain, Portugal, Italy, have a vested interest in Syriza failing. Because if it doesn’t, their powers are set to dwindle. This is most urgently obvious in Spain, where PM Rajoy’s ruling party is already way behind Podemos in the polls.

Podemos leader Pablo Iglesias, writing in the Guardian, made his position very clear:

If The Greek Olive Branch Is Rejected, Europe May Fall

During his swearing-in speech as Greece’s prime minister, Alexis Tsipras was clear: “Our aim is to achieve a solution that is mutually beneficial for both Greece and our partners. Greece wants to pay its debt.” The European Central Bank’s response to the Greek government’s desire to be conciliatory and responsible, was also very clear: negative. Either the Greek government abandons the programme on which it was elected, and continues to do the very thing that has been disastrous for Greece, or the ECB will stop supporting Greek debt.

The ECB’s calculation is not only arrogant, it is incoherent. The same central bank that recognised its mistakes a few weeks ago and began to buy government debt is now denying financing to the very states that have been arguing for years that the role of a central bank should be to back up governments in protecting their citizens rather than to rescue the financial bodies that caused the crisis.

And though Portugal may not – yet – have a full-fledged Syriza or Podemos, it’s economy is in straits as dire as those of its peers, as Ambrose EP explains today:

Germany Faces Impossible Choice As Greek Austerity Revolt Spreads

It is unfair to pick on Portugal but its public and private debts are 380% of GDP – the highest in Europe and higher than those of Greece – making is acutely vulnerable to toxic effects of deflation on debt dynamics. Portugal’s net international investment position (NIIP) – the best underlying indicator of solvency – has reached minus 112% of GDP. Public debt has jumped from 111% to 125% of GDP in three years. The fiscal deficit is still 5%. The country’s ranking in global competitiveness is close to that of Greece.

“The situation in Portugal is very different,” says Paulo Portas, the deputy premier. Sadly it is not. Once you violate the sanctity of monetary union and reduce EMU to a fixed-exchange system, the illusion that Portugal is out of the woods may not last long. Markets will test it. Only two people can now stop the coming train-wreck. Chancellor Angela Merkel and her finance minister Wolfgang Schauble, a man who masks his passion for the EU cause behind an irascible front.

Ambrose also quotes Italy’s Beppe Grillo:

Beppe Grillo’s Five Star movement – with 108 seats in parliament – is openly calling for a return to the lira. Mr Grillo proclaims that Syriza is carrying the torch for all the long-suffering peoples of southern Europe, as it is in a sense. “What’s happening to Greece today, will be happening to Italy tomorrow. Sooner or later, default is coming,” he said.

Maybe for the reigning ‘kings and queens’ of the EU and its member states it’s inevitable that all this should become personal at some point. They’ve certainly tried hard enough to trivialize Grillo as some kind of clown through the years. Perhaps, also, it’s the demeanor, the popularity and the person of Varoufakis, the ‘new heart-throb of the thinking German woman’, as Ambrose characterized him. And I don’t think he meant Angela Merkel. Christine Lagarde, perhaps, who showed up yesterday in the sort of attire that seemed designed to blend in with Yanis.

But I still think the main reason things got personal is that with the arrival of Syriza on the scene, the ‘kings and queens’ can just ‘intuitively smell’ the changes that are afoot, and that don’t spell anything good for their own plush seats. For a while they could pretend it was all only – mostly right-wing – extremists that expressed feelings critical of the EU. And of course, Syriza is still habitually labeled ‘extreme left wing’ and ‘Marxist’, but Varoufakis clearly isn’t seen by people in Germany et al as some extremist nutcase.

The usual bag of tricks no longer works. And the subject Varoufakis brings to the table, that the EU and ECB economical policies have been an abject failure – at least for the people in Greece’ Main Street – is not some extreme notion either. Schäuble and Dijsselbloem can try and cling to the idea that Greece seeks to swindle German and Dutch voters out of even more money than they already have, and that still works to an extent, but it is wearing thin.

The contagion from Syriza success can be considerable, and though it pretends otherwise, the EU has no idea what it would mean down the line. Every single option they look at that is NOT Varoufakis surrendering, must scare them out of their socks. Anything they give up will be seen as a sign of weakness, and it will encourage parties for which Syriza ‘carries the torch’, and likely raise their support and votes.

However, if the Eurogroup don’t give up anything at all in the negotiations, there may be a Grexit, even with Russia and/or China stepping in to fund Athens. While there are all sorts of reports claiming that Grexit is manageable for the EU, don’t believe a word of them: nobody knows. And none of the present big shots wants to be held responsible for blowing up the common currency.

They have come to the realization over the past week that Syriza can be a ground-breaking force in Europe, not just a minor nuisance. They will have to adapt their attitude and their way of thinking, real fast. Monday February 16 comes to mind. Because Syriza will not back down and go for a bailout extension. For the simple reason that it is not what they see as their mandate. The Eurogroup had better be prepared for that, or it might become irrelevant in no time.

And no, no matter what they think, it’s not personal. Not for Varoufakis it isn’t. He merely represents the Greeks without access to health care who line up at soup kitchens. But you’re right, for those people, living in the third world that Europe has created within its borders, it’s very personal.

Feb 122015
 
 February 12, 2015  Posted by at 11:38 am Finance Tagged with: , , , , , , , , , ,  


Byron In Chinatown, Pell Street, New York 1900

Eurogroup Fails to Agree to Next Greek Bailout Steps (Bloomberg)
Rejected Eurogroup Draft Spoke Of “Extending” Greek Bailout (Reuters)
Greece And Eurozone In Stalemate Over Debt Burden (Guardian)
Greece Said to Offer Euro Area Four Principles for Talks (Bloomberg)
Germany Faces Impossible Choice As Greek Austerity Revolt Spreads (AEP)
Eurozone Leaders Believe Syriza Must Fail And Be Seen To Fail (Telegraph)
If The Greek Olive Branch Is Rejected, Europe May Fall (Pablo Iglesias)
86 Names Missing from Greek ‘Lagarde List’ (Greek Reporter)
Ukraine Gets IMF-Led $40 Billion Aid Accord to Avert Default (Bloomberg)
Ukrainian Cease-Fire Sealed After All-Night Minsk Peace Summit (Bloomberg)
Putin Top Advisor: US Eyes Ukraine for Regime Change in Russia (Zero Hedge)
Oil Firms ‘Need Fresh Strategies’ To Operate in Future of $50 Oil (BBC)
Global Oil Layoffs Exceed 100,000 (Bloomberg)
Goldman: Why Oil Crashed—and Why Lower Prices Are Here to Stay (Bloomberg)
Have Banks Overplayed Their Hand Fighting Wall Street Regulation? (Bloomberg)
Audit The Fed – And Shackle It, Too (David Stockman)
‘No Solution To Brazil’s Crisis’ (CNBC)
Sweden’s Riksbank Cuts Key Rate to Negative (Bloomberg)
Mediterranean Sinking ‘Kills 300 Migrants Bound For Europe (BBC)
New Ebola Cases Rise For Second Week In A Row (BBC)
Australia On Brink Of ‘Extinction Calamity’ (BBC)

The idea was always to stretch the meeting till Monday.

Eurogroup Fails to Agree to Next Greek Bailout Steps (Bloomberg)

Euro-area governments left tough decisions on the future of Greece’s bailout for next week, after talks failed to bridge differences over the aid program that the Greek government blames for economic hardship. With Greece’s current bailout expiring at the end of February, finance ministers met for six hours in Brussels without signing off on any conclusions on the way forward for the region’s most-indebted nation. That leaves open how Greece can avoid running out of cash and avert a possible exit from the 19-nation currency union. Attention now shifts to a summit of European Union leaders on Thursday in Brussels, a day after German Chancellor Angela Merkel and French President Francois Hollande traveled to meet Russian President Vladimir Putin to negotiate a cease-fire in Ukraine.

Merkel had left bargaining with Greece to the finance ministers. “We understand each other much, much better now than we did this morning,” Greek Finance Minister Yanis Varoufakis told reporters after the finance chiefs broke up without a deal early Thursday in Brussels. “Europe manages to find agreements even if it’s at the last moment.” The euro fell as much as 0.3% to $1.1303 after Jeroen Dijsselbloem, the Dutch finance minister who chairs the euro group’s talks, said ministers couldn’t agree on a common approach. The euro briefly spiked to as high as 1.1352 earlier, when officials suggested an accord on steps forward was within reach.

“We covered a lot of ground but didn’t actually reach a joint conclusion on how to take the next steps,” Dijsselbloem said at a press conference. “There has to be a political agreement on the way forward.” Finance chiefs will return to Brussels on Feb. 16 to try to break the deadlock after Greek negotiators were said to have wavered on a commitment to extending the country’s existing bailout from the Troika. Greek Prime Minister Alexis Tsipras’s campaign pledge to end the bailout — and its austerity mandates — hung over the talks. Agreed language on a bailout extension was within reach, only to be rejected later by Greek negotiators who said they had to consult with superiors in Athens, German Finance Ministry spokesman Martin Jaeger said.

Read more …

There will be no extension. Syriza has said that 1000 times.

Rejected Eurogroup Draft Spoke Of “Extending” Greek Bailout (Reuters)

A draft statement by euro zone finance ministers on how to handle Greece’s finances spoke of “extending” its current bailout deal as a “bridge” to a new package, according to a copy of the draft that was rejected by Athens. The new Greek government, elected on a mandate to end deeply unpopular international bailout terms, has insisted there can be no “extension” once that deal expires at the end of the month. But EU partners fear financial chaos without such an accord. A draft of the planned Eurogroup statement, seen by Reuters, read: “Today the Eurogroup took stock of the current situation in Greece and the state of the current adjustment programme. In this context, the Eurogroup has engaged in an intensive dialogue with the new Greek authorities.

“The Greek authorities have expressed their commitment to a broader and stronger reform process aimed at durably improving growth prospects”. At the same time, the Greek authorities reiterated their unequivocal commitment to the financial obligations to all their creditors. “On this basis, we will now start technical work on the further assessment of Greece’s reform plans. The Greek authorities have agreed to work closely and constructively with the institutions to explore the possibilities for extending and successfully concluding the present programme taking into account the new government’s plans. If this is successful this will bridge the time for the Greek authorities and the Eurogroup to work on possible new contractual arrangements. We will continue our discussions at our next meeting on Monday 16 February.”

Read more …

Mexican standoff.

Greece And Eurozone In Stalemate Over Debt Burden (Guardian)

The Greek government’s confrontation with its eurozone creditors over its campaign to relieve its staggering debt burden while relaxing the terms of five years of austerity resulted in stalemate late on Wednesday. The first proper negotiations between Greece and eurozone finance ministers failed to make any progress or result in a joint statement. While no immediate agreement had been expected, the emergency meeting had been tipped to produce a framework for talks to be finessed over the next few days before another meeting next Monday. Jeroen Dijsselbloem, the Dutch finance minister who chaired the Brussels meeting, announced that this aim was not met. It appeared that the new leftwing government in Athens was isolated in seeking to extract better terms from Europe.

Alexis Tsipras, the new Greek prime minister, seems to have ordered his finance minister, Yanis Varoufakis, to stand firm against the pressure to make any concessions. Tsipras is due in Brussels on Thursday for his debut on the European stage at an EU summit. Following 10 days of touring Europe in a failed attempt to woo Berlin, Frankfurt and other key capitals to alter the terms of trade between Athens and the eurozone, Varoufakis went into negotiations with the other finance ministers at a specially convened session in Brussels. Entering and leaving the meeting, he was uncharacteristically taciturn.

The stalemate could see Greece running out of cash next month, unilaterally defaulting on the bailout programme with the ECB, the European Commission and the IMF, and being forced to leave the single currency. That prospect is viewed as a disaster fraught with risks in Brussels, Paris and Rome. But Berlin, whose voice matters more than most in the negotiations, is reliably said to be “extremely relaxed” about the Greek crisis and opposed to tearing up the agreements that Greece is formally bound to under the bailout terms.

Read more …

“..popular protests “across Greece and Europe” are “the source of our strength.”

Greece Said to Offer Euro Area Four Principles for Talks (Bloomberg)

Greek Finance Minister Yanis Varoufakis presented his European counterparts with four principles for a new financing deal, according to two euro-area officials, as Greece battles to stave off a cash crunch and stay in the currency bloc. Greece wants a deal that provides for financial stability, financial sustainability and debt restructuring, while addressing Greece’s humanitarian crisis, Varoufakis said during talks Wednesday in Brussels without offering details, according to the officials, who asked not to be named because the talks are private. Finance ministers of the 19 euro nations met on Wednesday after Germany and Greece took clashing positions heading into negotiations that will continue Feb. 16 in the Belgian capital.

Dutch Finance Minister Jeroen Dijsselbloem, who heads the meetings, said the ministers wanted to hear Greece’s proposals. “I don’t expect an outcome today,” Dijsselbloem told reporters in Brussels before the talks. Extra money “is not on the table right now” and Greece needs to stick to its reform path, he said. Greece’s bailout package will expire this month if the euro area’s most-indebted nation can’t reach a deal with its creditors. Asked by a reporter before the meeting whether Greece’s exit from the euro area is on the table, Varoufakis said: “Of course not.” In Athens, thousands rallied in front of the Greek parliament in support of the government’s anti-austerity stance. Prime Minister Alexis Tsipras posted a photo of the rally on his Twitter account, saying popular protests “across Greece and Europe” are “the source of our strength.”

Read more …

“You can defend EMU policies, or you can defend your political base, but you cannot do both.”

Germany Faces Impossible Choice As Greek Austerity Revolt Spreads (AEP)

The political centre across southern Europe is disintegrating. Establishment parties of centre-left and centre-right – La Casta, as they say in Spain – have successively immolated themselves enforcing EMU debt-deflation. Spain’s neo-Bolivarian Podemos party refuses to fade. It has endured crippling internal rifts. It has shrugged off hostile press coverage over financial ties to Venezuela. Nothing sticks. The insurrectionists who came from nowhere last year – with Trotskyist roots and more radical views than those of Syriza in Greece – are pulling further ahead in the polls. The latest Metroscopia survey gave Podemos 28pc. The ruling conservatives have dropped to 21pc. The once-great PSOE – Spanish Workers Socialist Party – has fallen to 18pc and risks fading away like the Dutch Labour Party, or the French Socialists, or Greece’s Pasok.

You can defend EMU policies, or you can defend your political base, but you cannot do both. As matters stand, Podemos is on track to win the Spanish elections in November on a platform calling for the cancellation of “unjust debt”, a reversal of labour reforms, public control over energy, the banks, and the commanding heights of the economy, and withdrawal from Nato. Europe’s policy elites can rail angrily at the folly of these plans if they wish, but they must answer why ex-Trotskyists threatening to dismantle market capitalism are taking a major EMU state by storm. It is what happens when 5.46m people lack jobs, when 2m households still have no earned income, and when youth unemployment is still running at 51.4pc, and home prices are down 42pc, six years into a depression.

It is pointless protesting that Spain’s economy is turning the corner, a contested claim in any case. There comes a point when a society breaks and stops believing anything its leaders say. The EU elites themselves have run their currency experiment into the ground by imposing synchronized monetary, fiscal, and banking contraction on the southern half of EMU, in defiance of known economic science and the lessons of the 1930s. It is they who pushed the eurozone into deflation, and thereby pushed the debtor states into accelerating compound-interest traps. It is they who deployed the EMU policy machinery to uphold the interest of creditors, refusing to acknowledge that the root cause of Europe’s crisis was a flood excess capital flows into vulnerable economies.

It is they who prevented a US-style recovery from the financial crisis, and they should not be surprised that such historic errors are coming back to haunt. The revolt in Italy has different contours but is just as dangerous for Brussels. Italians may not wish to leave the euro but political consent for the project but broken down. All three opposition parties are now anti-euro in one way or another. Beppe Grillo’s Five Star movement – with 108 seats in parliament – is openly calling for a return to the lira. Mr Grillo proclaims that Syriza is carrying the torch for all the long-suffering peoples of southern Europe, as it is in a sense. “What’s happening to Greece today, will be happening to Italy tomorrow. Sooner or later, default is coming,” he said.

Read more …

How the right wing sees things.

Eurozone Leaders Believe Syriza Must Fail And Be Seen To Fail (Telegraph)

In current discussions of what Greece might or might not get in the way of concessions from the Eurozone, there has so far been relatively little appreciation of one basic political reality: as far as the governments of Spain, Portugal, Ireland, probably Italy and perhaps even France are concerned, Syriza must fail and must be seen to fail. Why? The reasons differ slightly between countries. The easiest case to see is perhaps Spain. In Spain, the governing party is the centre-right Partido Popular led by Mariano Rajoy. It is currently facing pressure from a far-left party, Podemos, allied to Syriza. Indeed the Podemos leader Pablo Iglesias even campaigned in partnership with Syriza and, following Syriza’s victory, at his own party’s rally he proclaimed: “Syriza, Podemos – we will win [venceremos]!”

Podemos is currently leading in the polls, ahead of an election later this year. The very last thing Rajoy can afford is for Syriza’s approach to be seen to succeed, emboldening and vindicating Podemos. As for Portugal and Ireland, where the governments stuck to bailout conditions despite the domestic pain, how would they sell concessions to Syriza to their own voters? Suppose they go back and say: “We were suckers. We shouldn’t have made all those cuts. Instead, what we really should have done was to raise the minimum wage, hire back the public sector staff that had been fired, say we weren’t going to pay our debts to our eurozone partners, cosy up to the Russians and tell the Germans they didn’t feel nearly guilty enough about World War II. Then everyone would have said we were ‘rock stars’ and and forgiven our debts.” Do you reckon that would go down well?

As for the Italians, the Syriza leaders are terribly keen to claim that Greece and Italy are in much the same position and that there should therefore be a general debt amnesty across the eurozone. The Italians, on the other hand, are less keen on this comparison. Over the weekend, the Greek finance minister stated: “Let’s face it, Italy’s debt situation is unsustainable”. The Italian Finance Minister Pier Carlo Padoan replied on Twitter that his Greek counterpart’s remarks were “out of place” and that Italy’s debt is “solid and sustainable”. If the Italians, at any point, seek any relaxation of the fiscal strictures their eurozone partners have placed upon them, you can rest assured they will not be claiming that they are just like Greece or that anything that happens in Greece sets a precedent for them.

Read more …

Letter from Spain’s oppostion leader: “..the diktats of those who still appear to be running things in Europe have failed, and the victims of this inefficiency and irresponsibility are Europe’s citizens.”

If The Greek Olive Branch Is Rejected, Europe May Fall (Pablo Iglesias)

During his swearing-in speech as Greece’s prime minister, Alexis Tsipras was clear: “Our aim is to achieve a solution that is mutually beneficial for both Greece and our partners. Greece wants to pay its debt.” The European Central Bank’s (ECB) response to the Greek government’s desire to be conciliatory and responsible, was also very clear: negative. Either the Greek government abandons the programme on which it was elected, and continues to do the very thing that has been disastrous for Greece, or the ECB will stop supporting Greek debt. The ECB’s calculation is not only arrogant, it is incoherent. The same central bank that recognised its mistakes a few weeks ago and began to buy government debt is now denying financing to the very states that have been arguing for years that the role of a central bank should be to back up governments in protecting their citizens rather than to rescue the financial bodies that caused the crisis.

Now, instead of acknowledging that Greece deserves at least the same treatment as any other EU member state, the ECB has decided to shoot the messenger. Excesses of arrogance and political short-sightedness cost dear. The new despots who are trying to persuade us that Europe’s problem is Greece are putting the European project itself at risk. Europe’s problem is not that the Greeks voted for a different option from the one that led them to disaster; that is simply democratic normality. Europe’s threefold problem is inequality, unemployment and debt – and this is neither new nor exclusively Greek. Nobody can deny that austerity has not solved this problem, but rather has exacerbated the crisis.

Let’s spell it out: the diktats of those who still appear to be running things in Europe have failed, and the victims of this inefficiency and irresponsibility are Europe’s citizens. It is for this precise reason that trust in the old political elites has collapsed; it is why Syriza won in Greece and why Podemos – the party I lead – can win in Spain. But not all the alternatives to these failed policies are as committed as Syriza and Podemos are to Europe and to European democracy and values. The Greeks have been pushed to the point of disaster, yet the Greek government has reached out and shown great willingness to cooperate. It has requested a bridge agreement that would give both sides until June to deal with what is little short of a national emergency for the majority of the Greek population.

Read more …

Interesting to see how hard Syriza will go after these guys.

86 Names Missing from Greek ‘Lagarde List’ (Greek Reporter)

The notorious “Lagarde List” should include a total of 2,148 names and not the 2,062 that are listed so far, according to a report in Ta Nea newspaper. The Lagarde List is a spreadsheet containing over 2,000 names of possible Greek tax evaders with undeclared deposits at Swiss HSBC bank’s Geneva branch. It is named after former French finance minister Christine Lagarde who passed it to the Greek government in October 2010 to help them tackle tax evasion. Lagarde is now Managing Director of the International Monetary Fund. The list was hidden by Greek officials and it became known two years later when it was exposed by investigative journalist Costas Vaxevanis.

The newspaper report says that after research by the International Consortium of Investigative Journalists, there are 86 new names of Greeks who have undeclared deposits in the Swiss bank. They are all natives of Greece, but have declared residency in other countries, thereby not listed on the original list. Also, the investigation shows that there are another 41 names who are linked to the accounts of potential tax evaders already on the list. So far, very few names on the list have been audited. Former finance minister Giorgos Papaconstantinou is accused of distorting the spreadsheet and erasing names of his relatives on the list and will be referred to the Special Court.

Read more …

Even deeper into debt slavery.

Ukraine Gets IMF-Led $40 Billion Aid Accord to Avert Default (Bloomberg)

Ukraine reached a preliminary accord to expand an International Monetary Fund-led bailout to $40 billion to avert a default as the 10-month conflict in the nation’s east damages the economy and drains resources. An IMF team, which has been in the Ukrainian capital since Jan. 8, will recommend the Washington-based lender’s board sign off on the package, Managing Director Christine Lagarde said Thursday in Brussels. The package includes contributions from other sources, including the EU, Lagarde told reporters. Ukraine, rocked by a pro-Russia insurgency in its industrial heartland, is struggling with the deepest recession since 2009, foreign reserves at an 11-year low and the world’s worst-performing currency.

The country’s fiscal and economic condition will help determine whether it remains oriented toward the U.S. and EU or is drawn into Russia’s orbit amid the worst standoff since the end of the Cold War. “It’s an ambitious program, it’s a tough program and it’s not without risk,” Lagarde told reporters. “But it’s also realistic.” Ukraine’s April 2023 Eurobond was little changed at 53.19 cents on the dollar at 10:23 a.m. in Kiev, lowering the yield two basis points to 19%. The government of Ukraine faces debt repayments of $11 billion this year and has said it will approach foreign bondholders over easier terms once IMF financing is in place. The accord still needs IMF board approval. Ukraine’s allies stepped in with funding pledges in the run-up to the IMF talks being completed.

The U.S. promised as much as $2 billion in loan guarantees, while the European Union said it would disburse €1.8 billion euros. Leaders of Russia, Ukraine, France and Germany are meeting in Minsk, Belarus on Thursday to reach a peace deal in the conflict that has killed at least 5,400 people, the United Nation estimates. The U.S., EU and Ukraine blame Russia for aiding the rebels. President Vladimir Putin denies the charges. “The hope will be to send a signal to Putin and to Ukrainians that the West stands behind Ukraine and will not let it fail financially,” Timothy Ash at Standard Bank said.

Read more …

Meaningless?!

Ukrainian Cease-Fire Sealed After All-Night Minsk Peace Summit (Bloomberg)

The leaders of Russia, Ukraine, Germany and France agreed on a cease-fire to stem the conflict that’s devastated eastern Ukraine and triggered the worst crisis in more than 20 years between Russia and its former Cold War foes. The deal envisages a truce starting Feb. 15 and reaffirms some commitments from a failed September bid to end the conflict, Russian President Vladimir Putin told reporters in the Belarusian capital of Minsk. The accord was struck early Thursday after all-night talks between Ukrainian President Petro Poroshenko, Putin, German Chancellor Angela Merkel and French President Francois Hollande.

The collapse of previous cease-fires has stoked skepticism as to whether this one will hold. Ten months of fighting have killed more than 5,000 people, ravaged Ukraine’s economy and propelled Russia toward recession through U.S. and European sanctions. Raising pressure to deliver a settlement, the run-up to the summit was accompanied by escalating violence and calls for the U.S. to supply weapons to Ukraine’s struggling army. “The conflict will continue, even with this agreement,” Joerg Forbrig, a senior program director at the German Marshall Fund in Berlin, said by phone. “Eastern Ukraine is now basically lost to central government control.”

Read more …

“The situation in Ukraine is being used as a pretext for the active ‘repression’ of our country..”

Putin Top Advisor: US Uses Ukraine To Get Regime Change in Russia (Zero Hedge)

Following the humiliation of tonight’s much anticipated Eurogroup meeting in which for the first time ever the ensuing disarray was so profound the panicked European finance ministers couldn’t even find a quorum consensus to produce even the tersest of official statements, there was some hope that the second round of negotiations currently taking place in Minsk to find a solution to the Ukraine civil war would at least partially redeem Europe’s faltering negotiating reputation. Alas, as of this moment, that does not appear to be the case, and as Reuters reports citing a Kiev presidential aide, that Minsk talks on Ukraine crisis could last six more hours. “We’ve got another 5-6 hours of work. At least. But we should not leave here without an agreement on an unconditional ceasefire. There’s a battle of nerves underway,” aide Valeriy Chaly said in a Facebook post.

Well, if it is indeed a “battle of nerves”, something tells who the victor will be, considering all his peers are just a little more preoccupied with the potential collapse of their artificial monetary and political union. Yet, just like the previous Minsk “agreement”, even if by some miracle there is a solution this time around, the probability peace will be maintained is slim to none. The reason is not simply because the Ukraine civil war will go on until there is a terminal partition between the pro-western West part of the country, and the pro-Russian eastern regions. The real reason may be what one of Vladimir Putin’s top security advisors, the secretary of the Security Council, Nikolai Patrushev said earlier today, when he told a Russian state newspaper that the U.S. was orchestrating events in Ukraine in a bid to overthrow Mr. Putin’s government.

He also expressed certainty that the West’s financial aid for Kiev would only bring the Ukrainian economy to a “dead end.” “The situation in Ukraine is being used as a pretext for the active ‘repression’ of our country,” Mr. Patrushev, who ran Russia’s Federal Security Service during Mr. Putin’s first eight years as president, said in an interview with the Rossiyskaya Gazeta, published Wednesday. And, if accurate, Patrushev’s assessment is that the US will not stop short of what effectively will be world war: “The Americans are trying to involve the Russian Federation in an interstate military conflict, cause regime change [in Russia] and ultimately dismember our country via events in Ukraine,” he said.

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Most won’t be able to.

Oil Firms ‘Need Fresh Strategies’ To Operate in Future of $50 Oil (BBC)

Many oil and gas firms will need to transform the way they operate in order to grasp future opportunities in the sector, according to a report. PwC said companies should be looking to deploy fresh strategies, following a sustained fall in the price of oil. It suggested they should look to reduce costs “in a sustainable manner” and find efficiencies by keeping tax costs in control. Other suggestions included divesting non-core parts of their business. PwC argued that firms might also want to identify and invest in strategic acquisitions to secure market position in key areas. The report’s authors said the UK oil and gas sector would have been in a much better place “to weather the oil price maelstrom”, had it heeded 30%-40% cost reduction warnings which surfaced 12-18 months ago.

The report said there was still time for firms to “learn the harsh lessons of past languor” by adopting fresh strategies. But it also warned that to achieve that, they needed to get away from “short term knee-jerk reactions” seen in previous downturns – or risk damaging the long term future of the industry. PwC cited significant downsizing undertaken during the downturn of 1999-2000, arguing that the industry had struggled since then with talent retention. It said “aggressive price negotiation” and contract revisions with the oil services sector would also do little to create a collaborative environment. The report argued that companies must answer “hard questions” about whether they can continue to invest in the sector, or if they should instead “move on”.

But it stressed the need for the industry to take a long-term view, adding that “intelligent and strategic cost-cutting” could “position players well through this turmoil”. Brian Campbell, oil and gas capital projects director at PwC and co-author of the report, said: “With economists predicting low oil prices throughout 2015, UK oil and gas firms are not out of the woods by any means. “They are still at risk of an economic triple-whammy: as the falling oil price reduces income, incremental investment may no longer be economic with a risk that field life diminishes and decommissioning is accelerated. “The stark reality is that firms need to be able to operate in an environment where oil averages at $50 per barrel – only then can it be truly fit for the future.”

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Just starting.

Global Oil Layoffs Exceed 100,000 (Bloomberg)

The promise of plentiful jobs and salaries as high as a quarter-million dollars a year lured Colombia native Clara Correa Zappa and her British husband to Perth, Australia, at the height of the continent’s oil and gas frenzy. Engineers were in high demand in 2012, when oil prices exceeded $100 a barrel, making the move across the world a no-brainer. Within two years, though, oil plunged to less than half the 2012 price and Zappa lost her job as a safety analyst. Now she’s worried her husband, who also works in the commodities industry, could also lose his job. Such anxieties are rising at a time when the number of energy jobs cut globally have climbed well above 100,000 as once-bustling oil hubs in Scotland, Australia and Brazil, among other countries, empty out, according to Swift Worldwide Resources, a staffing firm with offices across the world.

“It’s shocking,” Zappa, 29, said in a telephone interview. There is “so much pressure for him to keep his job and even work extra.” Her concerns mirror those of tens of thousands of workers who migrated to oil and gas boomtowns worldwide in the years of $100-a-barrel crude, according to Tobias Read, Swift’s chief executive officer. While much of the focus on layoffs has centered on the U.S., where the shale fields that created the glut have seen the steepest cutbacks, workers in oil-related businesses across the globe are suffering, he said. “The issue is one of uncertainty, of whether there’s a job out there,” Read said in a phone interview. “For seven years, there was a shortage of staff. Now for the first time, there’s a surplus. Currently almost no one is hiring.”

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“The idea is that the stock market is a pretty good indicator of economic demand.” Really? Nothing to do with QE?

Goldman: Why Oil Crashed—and Why Lower Prices Are Here to Stay (Bloomberg)

Oil prices have gotten crushed for the last six months. The extent to which that was caused by an excess of supply or by a slowdown in demand has big implications for where prices will head next. People wishing for a big rebound may not want to read farther. Goldman Sachs released an intriguing analysis on Wednesday that shows what many already suspected: The big culprit in the oil crash has been an abundance of oil flooding the market. A massive supply shock in the second half of last year accounted for most of the decline. In December and January, slowing demand contributed to the continued sell-off. Goldman was able to quantify these effects.

Goldman’s model is simple on its face, looking at just two variables over time: the price of oil and the value of U.S. stocks (as measured by the S&P 500). The idea is that the stock market is a pretty good indicator of economic demand. So when stocks move in tandem with oil prices, demand is in the driver’s seat. When the price of oil moves in the opposite direction of stocks, the shock is coming from supply.

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“The message is clear that Warren’s attacks on the industry have made even moderate Democrats skittish to stand up for banks..”

Have Banks Overplayed Their Hand Fighting Wall Street Regulation? (Bloomberg)

The financial industry is finding that winning in Washington comes at a cost. Wall Street lobbied aggressively and succeeded late last year in persuading lawmakers to roll back rules for the $700 trillion derivatives market. Instead of generating momentum for further changes to the Dodd-Frank Act, the victory sparked a populist uprising among Democrats that’s had wide-ranging consequences, including stymieing less controversial requests from regional banks like Capital One Financial Corp. “A short while ago there was bipartisan agreement on a number of common sense improvements,” said Rob Nichols, president of the Financial Services Forum that represents the chief executives of Wall Street’s biggest banks. “Unfortunately, that bipartisan agreement is gone.”

Financial companies and their employees spent $169 million on the November elections and had expectations that their bid to loosen regulations would get easier with Republicans in control of both the House and Senate. Now, there is second-guessing that banks overplayed their hand, according to lobbyists. The December win on swaps rules has become a rallying cry for Senator Elizabeth Warren, a frequent critic of Wall Street, and spurred repeated White House vows to defend Dodd-Frank. The fallout has frustrated banks, which hope it’s temporary. Democrats who previously said they wanted to revise the law now won’t even discuss it. Republicans are altering their strategy for attacking Dodd-Frank. And lobbyists have been hindered in their efforts to persuade Senate Democrats to champion changes to financial rules.

A sign of the political headwinds has been regional banks’ difficulty winning bipartisan support for a bill that would free them from stringent oversight imposed on lenders with at least $50 billion of assets. Capital One considers getting the threshold increased a top legislative goal this year, according to people with knowledge of the matter. The company’s inability to persuade Democrats to lead the charge in the Senate, particularly home state Senator Mark Warner of Virginia, has reverberated through the ranks of financial lobbyists, according to two people involved in the talks. The message is clear that Warren’s attacks on the industry have made even moderate Democrats skittish to stand up for banks, the people said. Capital One’s discussions with Warner aren’t unique, said company spokeswoman Tatiana Stead. “We have had identical and multiple discussions with his Senate colleagues and other elected officials,” she said.

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“..this whole chorus of Fed governors – yesterday’s lineup included Richard Fisher and Charles Plossner – defending the sacred “independence” of the Federal Reserve is downright Kafkaesque.”

Audit The Fed – And Shackle It, Too (David Stockman)

The reason to be fearful about the economic and financial future is that we are in the thrall of a mainstream consensus that is downright meretricious. In attacking Rand Paul’s audit legislation, for instance, one of the time-servers on the Fed Board of Governors, Jerome H. Powell, let loose the following gem: “As recent U.S. history has shown, elected officials have often pushed for easier policies that serve short-term political interests…..” Perhaps Mr. Powell is a descendent of Rip Van Winkle – and missed the last 20 years of history while doing LBOs at the Carlyle Group and helping Congress improve upon its enviable record of fiscal management while at the Bipartisan Policy Center. But whatever he was doing—snoozing or otherwise distracted – it most assuredly was not gathering evidence that “elected officials” were putting undue pressure on the Fed for “easier policies”.

For crying out loud there is exactly zero evidence that “politicians” had anything to do with zero interest rates. And ZIRP defines the ultimate level of “ease” according to Bernanke himself, who famously described his policies as positioned at the “zero bound”. Indeed, given the very earliest expected date for “lift-off” in June, the Fed will have pinned the money market rate at zero for 80 months running. This unprecedented tsunami of “easy money”, of course, happened with nary a Congressman or Senator darkening the door at the Eccles Building. Folks, this whole chorus of Fed governors – yesterday’s lineup included Richard Fisher and Charles Plossner – defending the sacred “independence” of the Federal Reserve is downright Kafkaesque.

Rather than protecting the Fed from meddling politicians, it is the American public that desperately needs protection from the depredations of an unelected monetary politburo that runs the entire financial system. Let’s say you have saved a quarter million bucks over a lifetime of working and scrimping, but wish to keep it safe and liquid in your retirement years. Well thank you “independent” governors of the Fed for the privilege of owning a bank CD that generates 40 bps or the grand sum $2.75 per day. That’s one visit to Starbucks each morning, but forget the cappuccino. It’s just black coffee for you!

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When will this bomb burst?

‘No Solution To Brazil’s Crisis’ (CNBC)

Brazil’s central bank won’t be able to save the country with monetary policy, economists warned, after downgrading their 2015 growth outlook to zero as stagflation drags the once vibrant economy. “There is no near-term solution to deepening stagflation,” said Dev Ashish, Latin America economist at Societe Generale in a note on Wednesday. “Fiscal and monetary orthodoxy is not expected to yield any fruit in the near to medium term.” Annual inflation shot up to a twelve-year high of 7.1% in January, according to official data on Friday, well above the central bank’s 4.5% target range. With inflation widely expected to remain elevated, analysts in Brazil revised their 2015 gross domestic product (GDP) growth forecast to zero, according to a central bank survey this week.

South America’s largest nation is estimated to have grown less than 1% last year. Brazil’s central bank – the Banco Central do Brasil (BCP) – engaged in an aggressive tightening cycle last year to combat inflation. It pushed the benchmark short-term interest rate, the Selic, to its current multi-year high of 12.25%. Markets widely expect more rate hikes in the coming months. Analysts don’t have faith in the central bank’s toolbox. Rate hikes dampen economic growth, so the success of additional monetary tightening depends on how effectively the government manages its finances, but that depends on economic growth, SocGen said. The bank expects public debt to rise nearly 70% over the next two years on the back of weak GDP.

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Panic.

Sweden’s Riksbank Cuts Key Rate to Negative (Bloomberg)

Sweden’s central bank cut its main interest rate below zero and unexpectedly unveiled plans to start buying government bonds to jolt the largest Nordic economy out of a deflationary spiral. The Riksbank lowered its repo rate to minus 0.10% from zero. A cut had been predicted by six of the 18 economists surveyed by Bloomberg, while the remainder forecast no change. Policy will “soon” be made “more expansionary” by buying 10 billion kronor ($1.2 billion) in government bonds with maturities of one to five years, the Stockholm-based bank said. It pledged to keep the repo rate negative until underlying inflation is close to 2%, which the bank predicts will happen in the second half of 2016. Policy makers will take further steps if necessary, the bank said.

“To ensure that inflation rises toward the target, the Riksbank is prepared to quickly make monetary policy more expansionary, even between the ordinary monetary policy meetings, should the need arise,” it said. Policy makers are delving deeper into their toolbox, joining the European Central Bank in unleashing unconventional measures as deflation risks becoming entrenched. The bank, led by Governor Stefan Ingves, last year reversed course and scrapped a policy of keeping rates up to guard against a build-up in household debt. The reluctance to ease in the face of slowing inflation and high unemployment was characterized as “sadomonetarist” by Nobel laureate Paul Krugman.

The krona slumped as much as 2.1%, and was down 1.4% at 9.62 per euro as of 10:33 a.m. in Stockholm. The yield on Sweden’s benchmark five-year note fell 10 basis points to 0.8%. Two-year yields slid to minus 0.24%. “We didn’t expect the Riksbank to buy government bonds as early as now, but rather that they would wait and see if this would be needed,” said Olle Holmgren, an analyst at SEB. “They are also maybe even clearer in signaling willingness to do even more if needed. This is softer than we thought.”

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Europe’s biggest disgrace is still not being tackled.

Mediterranean Sinking ‘Kills 300 Migrants Bound For Europe (BBC)

At least 300 migrants are feared dead after the boats carrying them from the North African coast sank in the Mediterranean Sea, the UN says. UNHCR regional director Vincent Cochetel called the incident a “tragedy on an enormous scale”. Nine survivors who were brought to Lampedusa by the Italian coast guard are believed to be from West Africa. Initial reports on Monday suggested that at least 29 migrants had died after their dinghy overturned. The UNHCR said the migrants had departed from Libya on Saturday in four dinghies. Mr Cochetel said, “Europe cannot afford to do too little too late”, and called the tragedy, “a stark reminder that more lives could be lost if those seeking safety are left at the mercy of the sea.” In November, Italy ended a year-long operation aimed at rescuing seaborne migrants.

Known as Mare Nostrum, it was launched in October 2013 in response to a tragedy off Lampedusa in which 366 people died. The aim of the mission was to look for ships carrying migrants that may have run into trouble off the Libyan coast. There is no way of knowing for sure whether these men, women, and children would have been saved if the former Italian search-and-rescue operation known as Mare Nostrum was still running. But having spent a week on board an Italian navy frigate, I can be sure they would have done their utmost to save as many lives as possible. The EU’s Triton border patrol is not designed to do that. It cannot pre-empt trouble in international waters – it can only act when lives are immediately at risk. The Italian operation was set up differently. The naval crews knew they had one single purpose – to prevent death.

Some time back, EU leaders pledged that not a single life would again be lost as a result of these large scale tragedies at sea. The EU now runs a border control operation, called Triton, with fewer ships and a much smaller area of operations. The UNHCR says almost 3,500 people died attempting to cross the Mediterranean Sea to reach Europe in 2014, making it the world’s most dangerous sea crossing for migrants. More than 200,000 people were rescued in the Mediterranean during the same period, many under the Mare Nostrum mission prior to its abolition, and the UNHCR expects the figure to remain high in 2015. In a speech before the European Parliament in November, Pope Francis called for a “united response to the question of migration”, warning that the Mediterranean could not be allowed to become a “vast cemetery”.

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“In another development, US President Barack Obama has said he will withdraw nearly all US troops helping to combat the disease in Liberia.”

New Ebola Cases Rise For Second Week In A Row (BBC)

The number of new cases of Ebola has risen in all of West Africa’s worst-hit countries for the second week in a row, the World Health Organization (WHO) says. This is the second weekly increase in confirmed cases in 2015, ending a series of encouraging declines. The WHO said on Wednesday that Sierra Leone had registered 76 of the 144 new cases, Guinea 65 and Liberia three. More than 9,000 people have died from Ebola since December 2013. The WHO said that the increase highlights the “considerable challenges” that must still be overcome to end the outbreak. “Despite improvements in case finding and management, burial practices, and community engagement, the decline in case incidence has stalled,” the UN health agency said in a statement. In another development, US President Barack Obama has said he will withdraw nearly all US troops helping to combat the disease in Liberia.

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“No other country has had such a high rate and number of mammal extinctions over this period, and the number we report for Australia is substantially higher than previous estimates..”

Australia On Brink Of ‘Extinction Calamity’ (BBC)

Australia has lost one in ten of its native mammals species over the last 200 years in what conservationists describe as an “extinction calamity”. No other nation has had such a high rate of loss of land mammals over this time period, according to scientists at Charles Darwin University, Australia. The decline is mainly due to predation by the feral cat and the red fox, which were introduced from Europe, they say. Large scale fires to manage land are also having an impact. As an affluent nation with a small population, Australia’s wildlife should be relatively secure from threats such as habitat loss. But a new survey of Australia’s native mammals, published in the journal Proceedings of the National Academy of Sciences, suggests the scale of the problem is more serious than anticipated.

Since 1788, 11% of 273 native mammals living on land have died out, 21% are threatened and 15% are near threatened, the study found. Marine mammals are faring better. “No other country has had such a high rate and number of mammal extinctions over this period, and the number we report for Australia is substantially higher than previous estimates,” said conservation biologist John Woinarski, who led the research. “A further 56 Australian land mammals are now threatened, indicating that this extremely high rate of biodiversity loss is likely to continue unless substantial changes are made. “The extent of the problem has been largely unappreciated until recently because much of the loss involves small, nocturnal, shy species with [little] public profile – few Australians know of these species, let alone have seen them, so their loss has been largely unappreciated by the community.”

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