Sep 212018
 


M. C. Escher The Tower of Babel 1928

 

Two thirds of Americans get at least some of their news on social media. Google and Facebook receive well over 70% of US digital advertising revenues. The average daily time spent on social media is 2 hours. Just a few factoids that have at least one thing in common: nothing like them was around 10 years ago, let alone 20. And they depict a change, or set of changes, in our world that will take a long time yet to understand and absorb. Some things just move too fast for us to keep track of, let alone process.

Those of us who were alive before the meteoric rise of the hardware and software of ‘social’ media may be able to relate a little more and better than those who were not, but even that is not a given. There are plenty people over 20, over 30, that make one think: what did you do before you had that magic machine? When you walk down the street talking to some friend, or looking at what your friends wrote on Facebook, do you ever think about what you did in such situations before the machine came into your life?

 


From 10% to 75% in 10 years

 

We’re not going to know what the hardware and software of ‘social’ media will have done to our lives, individually and socially, for a very long time. But in the meantime, their influence will continue to shape our lives. They change our societies, the way we interact with each other, in very profound ways; we just don’t know how profound, or how, period. There can be little question that they change us as individuals too; they change how we communicate, and in such a way that there is no way they don’t also change our very brain structures in the process.

Someone who walks down a street talking to someone else 10, 100, 1000 miles away, or sees messages from such a person come in in virtual real time, experiences things that were not available ever in human history. Our brains must adapt to these changes, or we will be left behind. And while for the over-20, over-30 crowd this takes actual adaptation, for those younger than that it comes quasi pre-cooked: they’ve never known anything else. Still, their brains were formed in completely different times too. Think hunter-gatherers. And that’s just the human part of the brain.

There are too many aspects to this development to cover here. One day someone will write a book, or rather, many someones will write many books, and they will all be different. Some will focus on people’s lives being saved because their smartphones allow them to either receive or send out distress signals. Others will tell stories of teenagers committing suicide after being heckled on ‘social’ media. With yin comes yang. Millions feel better with new-found ‘friends’, and millions suffer from abuse even if they don’t kill themselves.

 

With new media, especially when it goes from 1 to 100 in no time flat, it should be no surprise that the news it delivers changes too. We went from a few dozen TV- and radio stations and newspapers to a few hundred million potential opinions in the US alone. The media are no longer a one-way street. The first effect that has had is that the chasm between news and opinion has narrowed spectacularly. If their readers post their views of what they read and see, journalists feel they have the right to vent their opinions too.

And then these opinions increasingly replace the news itself. The medium is again the message, in a way, a novel kind of way. A hundred million people write things without being restricted by due diligence or other journalistic standards, and we see journalists do that too. They will come up with lies, half-truths, innuendo, false accusations, and moreover will not retract or correct them, except when really hard-pressed. After all, who has the time when you post a hundred+ tweets a day and need to update your Facebook pages too?

Obviously, Donald Trump is an excellent example of the changing media environment. His use of Twitter was a major factor in his election victory. And then his detractors took to Twitter to launch a huge campaign accusing him of collusion with Russia to achieve that victory. They did this moving in lockstep with Bob Mueller’s investigation of that collusion accusation. But almost two years after the election, neither Mueller not the media have provided any evidence of collusion.

That, ironically, is the only thing that is actually true about the entire narrative at this point. Sure, Mueller may still have something left in his back pocket, but if he had solid proof he would have been obliged to present it. Collusion with a foreign government is too serious not to reveal evidence of. Therefore, it’s safe to conclude that in September 2018, Mueller has no such evidence. But what about the thousands of printed articles and the millions of Tweets and Facebook posts claiming collusion that were presented as true?

Funny you asked. What they prove is not collusion, but the changing media landscape. The anti-Trump echo-chamber that I’ve written about many times has been going strong for two years and shows no signs of abating. There are still lots of people posting a hundred (re-)tweets etc. daily who are being read by many others, all of them confirming their biases in a never fulfilled feeding frenzy.

This is not about Trump. And I’m not a Trump supporter. This is instead about the media, and the humongous difference interactivity has made. And about the fact that it hasn’t just added a hundred million voices, it has also altered the way traditional media report the news, in an effort to keep up with those hundred million.

 

The thing here that is about Trump, is that he’s everybody’s favorite meal ticket. He confirms everyone’s opinion, whether for or against him, by the way he uses media. And most importantly, they all make a lot of money off of him. The New York Times and WaPo and MSNBC would be in deep financial trouble without Trump. Like they were before he came along. Polarization of opinions saved them. Well, not the WaPo, Jeff Bezos can afford to run 1000 papers like that and lose money hand over fist. But for the NYT and many others a Trump impeachment would be disastrous. Funny, right?

Another thing that is obvious is that one thing still sells above all others: sex. The smear campaign against Julian Assange has been successful in one way only, and it’s been a smash hit: the rape allegations. Completely false, entirely made up, dragged out as long as possible, and turning millions, especially women, against him.

The accusations against Supreme Court candidate Brett Kavanaugh haven’t been around long enough to be discredited. Maybe they will be, maybe they won’t. But read through newspaper articles, watch TV shows, follow Twitter, and you see countless voices already convinced ‘he did it’. And that ‘it’ is often labeled ‘rape’, though that’s not the accusation.

But it’s part of the Anti-Trump train, and the echo-chamber has gone into overdrive once again. Even if everyone understands that a 36-year old accusation must be handled with care. The accusing woman’s lawyer says the FBI must investigate, and everyone says: FBI! FBI!. Conveniently forgetting that the FBI has been far from impartial with regards to Trump, and the White House is not exactly waiting for another FBI role.

What’s wrong with waiting till you know the facts? Why judge a situation you know nothing about other than a woman accuses a man of assault 36 years ago, and doesn’t remember time, location etc.?

 

And that’s the thing all along, isn’t it? That people, both readers and journalists, all 200 million Americans of them, think they have acquired the right to judge any person, any situation they read a few lines about, just because they have purchased a smartphone. A faulty notion fed on a daily basis by the fact there are millions who think just like them.

We may want to rethink the terms ‘social’ media and ‘smart’ phone. They sound good, but they don’t cover the true nature of either. It’s hard to say where all this is going, but the sharply increasing polarization of society is certainly not a good sign. People feeling they have the right to accuse others without knowing facts, people building a Russiagate narrative without evidence, these are not things a society should welcome, whether they’re profitable or not.

Meanwhile, there are two people (there are many more, of course) who were banned from the platforms so many others use to draw baseless conclusions and spout empty accusations. And we miss them both, or we should: Alex Jones and Julian Assange. Have they really used ‘social’ media in worse ways than those 200 million Americans? Or were they banned because millions of Americans were following and reading their non-mainstream views?

We better get a grip on this, and on ourselves, or we won’t get another chance. What we have seen so far is that it’s not that hard to shape people’s opinions in a world with information overload. And that process is about to get a whole lot more intense. Until all you’re left with is the illusion that your opinion is actually your own.

 

 

Aug 212017
 
 August 21, 2017  Posted by at 9:28 am Finance Tagged with: , , , , , , , ,  7 Responses »


Elliott Erwitt Waiting for a Streetcar in Downtown Pittsburgh 1950

 

Ron Paul: 50% Stock Market Plunge ‘Conceivable,’ But Not Trump’s Fault (CNBC)
Zombies Propped Up As China’s Debt Swaps Surpass $100 Billion (BBG)
China’s Plunge Protection Team Claims “State Meddling” Stabilizes Markets (ZH)
House Of Cards: Lending Culture Is Leaving Australians Vulnerable (Abc)
Diesel Scandal Is A Risk To German Economy, Says Ministry (R.)
Britain and EU Clash Over Brexit Timetable for Trade Deal (BBG)
NAFTA Negotiations Start in Secrecy. Lobbying Heats Up (WS)
Beware the “The Cultural Civil War” Narrative (CHS)
Rob Ford, Donald Trump and the New Direction of Political Polarization (Towhey)
When Exactly Will the Eclipse Happen? (Wolfram)

 

 

Paul’s just guessing on the numbers, but the risks are obvious. And Trump will be blamed anyway.

Ron Paul: 50% Stock Market Plunge ‘Conceivable,’ But Not Trump’s Fault (CNBC)

Ron Paul’s sell-off prediction just got more severe. The former Republican Congressman from Texas believes escalating dysfunction in Washington will create even more pain for Wall Street. “A 50% pullback is conceivable,” Paul said on “Futures Now” recently. “I don’t believe it’s ten years off. I don’t even believe it’s a year off. ” According to his calculations, it would cut the S&P 500 Index in half, to 1212, and the blue-chip Dow Jones Industrial Average would collapse to 10,837. Paul noted that there’s a lot of chaos in Washington right now, with an “unpredictable president” and those who are inclined to “tear him apart” but if the market takes that big of a tumble, he doesn’t see it as Trump’s fault.

“It’s all man-made. It’s not the fault of Donald Trump in the last week. If the market crashes tomorrow and we have a great depression, he didn’t do it in six months. It took more like six or ten years to cause all these problems that we’re facing,” he said. What’s more, it would come at the expense of businesses who are counting on reforms such as tax cuts and fewer regulations, according to Paul. Paul, who is also known for his presidential runs, originally made his case for a somewhat more benign 25% downturn on June 29 on “Futures Now.” He argued Wall Street is overestimating the strength of the economy, and the Federal Reserve kept interest rates too low for too long. He said the situation for stocks could turn ugly as soon as October. Stocks will try to bounce back on Monday from multiple losing weeks in a row. The Nasdaq just saw its fourth consecutive week of losses. Meanwhile, the Dow & S&P 500’s losing streak now sits at two weeks.

Read more …

China’s way of propping up coal and steel. Too big to fail.

Zombies Propped Up As China’s Debt Swaps Surpass $100 Billion (BBG)

Almost a year after China rolled out steps to rein in soaring corporate leverage, concerns are rising that undeserving companies are benefiting while households are getting saddled with risks. China unveiled guidelines for debt-to-equity swaps in October, part of measures to trim the world’s biggest corporate debt loads. The idea was that healthy firms would use the program to cut interest-bearing borrowings, while bloated companies would be shunned. But it hasn’t always worked out that way, even as the total value of swaps reached 776 billion yuan ($116 billion) in the second quarter when volumes jumped to a record, according to Natixis. While China’s State Council said in October that zombie firms may not take part, 55% of the swaps last quarter were in the coal and steel industries, which are plagued by overcapacity, Natixis says.

The stakes are high for lenders and even individual investors, some of whom buy wealth management products repackaged from the swaps. The absence of a clear definition of “zombie” is part of the problem, according to Fitch Ratings. Views vary on whether further guidelines on the program released this month by the banking regulator will help address these issues. The program is attracting bad companies because they see debt-to-equity swaps as a way to get a bailout, said Chi Lo, Greater China senior economist at BNP Paribas Asset Management. “You can imagine the zombie companies will be just like cancer cells that eat into the system.”

The swaps generally work like this: A bank agrees to take over a company’s debt from its original lenders. The bank sets up a unit which has other shareholders that help share risk. The unit assumes the debt and conducts a transaction with the company to convert it into equity. It can then dispose of the stake. In the most recent draft guidelines released earlier this month by the China Banking Regulatory Commission, a bank is required to own no less than a 50% stake in the unit conducting the swaps. The guidelines also say that the units can sell bonds and borrow from the interbank market.

Read more …

That’s the same claim the Fed and ECB make, just in other words.

China’s Plunge Protection Team Claims “State Meddling” Stabilizes Markets (ZH)

It was two years ago, in June of 2015, when just as the Shanghai Composite was flirting with 5,000 and when literally the local banana stand guy was trading stocks, that the Chinese stock bubble burst, unleashing an unprecedented selling spree, a 40% drop in just two months, and Beijing’s nationalization of the stock market, courtesy of the domestic plunge protection team, the China Securities Regulatory Commission also known as the “National Team”. The decision by local authorities to effectively shut down price discovery had a huge confidence crushing impact on local investor confidence. As Gavekal Research put it overnight, “the lack of trust was crystallized by the decision in the summer of 2015 to “shut down” the equity markets for a while and stop trading in any stock that looked like it was heading south.

That decision confirmed foreign investors’ apprehension about China and in their eyes set back renminbi internationalization by several years, if not decades.” Understandably, with the realization that China (or any other nation for that matter), no longer has a an efficient, discounting stock market, but merely a policy tool meant to inspire confidence on the way up, and punish short sellers and “speculators” on the way down, the China Securities Regulatory Commission kept a low profile: after all why remind traders and investors that the local market only exists in the imaginations of several Beijing bureaucrats who sit down every day to decide the “fair value” of all market-traded equities. That changed last week, when for the first time in years, the Chinese Plunge Protection Team broke its silence and said that “state meddling has successfully stabilized China’s US$7 trillion stock market by curbing volatility and steering valuations to rational levels.”

For those stunned by the idiocy in the circular statement above, don’t worry it’s not just you: China indeed just said that the local market has become more efficient as a result of more manipulation. What is far more shocking, however, is that most central bankers around the world would agree with this statement.

Read more …

The banking system will fall with real estate, exposure to mortgage debt is 60%. And Australian banks own New Zealand banks.

House Of Cards: Lending Culture Is Leaving Australians Vulnerable (Abc)

A decade of housing price rises, low interest rates and relatively easy credit has left Australians carrying the second-highest level of household debt in the world. And despite efforts to tighten lending and to address problems in the lending culture, the ABC’s Four Corners program has learnt bank staff and mortgage brokers are still required to meet tough lending targets and some staff are threatened with dismissal if they do not meet the banks’ requirement to sign up more mortgages. The problems in the lending culture were acknowledged by the banks themselves earlier this year in a review conducted by the former public service chief, Stephen Sedgwick. Incentive payments and lending targets are still a primary motivator for bank staff. Internal performance expectations for Westpac bank lenders, obtained by Four Corners, include targets of six-to-nine home-finance requests a week and between two and three home-loan drawdowns a week.

Another economist who has raised the alarm is former banker Satiyajit Das. He said the 60% exposure to mortgage debt in Australia’s banks was “extremely high”. That figure “is at least 20% higher than Norway, and also higher than Canada, which is a very comparable economy to Australia”, he said. Australia’s feverish housing market has contributed but Mr Das said other countries that had experienced rapid house price rises did not have the same potentially dangerous exposure. “One of the biggest housing bubbles in the world is Hong Kong, but the Hong Kong banks have only got exposure to the housing market of around 15%,” he said. Exposure to housing debt at Australian levels, Mr Das said, would leave banks more vulnerable in the case of any housing downturn. “If there is a downturn then obviously the losses will build up quite quickly,” he said.

[..] Gerard Minack, the former head of developed market strategy at Morgan Stanley, said Australia had been led down this path by current tax arrangements and lenders who had been increasingly willing to leverage up borrowers. This, he said, had created “a massive affordability problem” that will exacerbate the pain associated with any downturn. Australia now has a household-debt-to-income ratio of 190%. “For every $1 of household income, there’s [nearly] $2 of debt,” Mr Minack said.

Read more …

Preparing Germans for a lenient attitude by their government (ahead of the Merkel re-election). Sorry guys, but carmakers are too big to fail. Can’t blame Angela…

Diesel Scandal Is A Risk To German Economy, Says Ministry (R.)

The emissions scandal ensnaring German carmakers is a risk to Europe’s largest economy, the finance ministry said on Monday. In its monthly report, the ministry named the issue, which broke out almost two years ago after Volkswagen admitted to cheating US diesel emissions tests, as a threat to Germany along with Britain’s decision to leave the European Union and protectionist trade policies by the US government. But it has said it was impossible to put a figure on the potential damage it could cause. The car industry is Germany’s biggest exporter and provides about 800,000 jobs. “Risks linked to how Brexit will shape out and future US trade policies remain,” the ministry said. “In addition, the so-called diesel crisis should be classified as a new risk to the German economy even though its effects are not possible to quantify at the moment.”

Strong household and state spending provided most of the impulse for the German economy in the second quarter when growth was measured at 0.6%. Weaker net foreign trade dampened growth, as exports grew strongly less than imports. The ministry said it expected the industrial sector to continue its upswing also in the third quarter, pointing to robust orders and strong business sentiment indicators. But the diesel crisis could cloud the German growth outlook, it said, adding: “Given the importance of the automotive industry [the diesel crisis) must be classified in the medium term as a risk to the overall economic development.” German politicians and car bosses agreed earlier in August to overhaul engine software on 5.3m diesel cars to cut pollution and try to repair the industry’s battered reputation.

EU antitrust regulators are also investigating allegations of a cartel among a group of German carmakers, a measure that could result in hefty fines for the companies. In April, Volkswagen was ordered to pay a $2.8bn criminal penalty in the United States for cheating on emissions tests. The company is also paying $1.5bn in a civil case brought by the US government and spending $11bn to buy back cars and offer other compensation. Back in Europe, German carmakers VW, Audi, Porsche, Mercedes and BMW face questions over whether they colluded to bring down the cost of components – including some used to control diesel emissions.

Read more …

How is it possible that just one party does these negotiations?

Britain and EU Clash Over Brexit Timetable for Trade Deal (BBG)

Britain and the European Union are at odds over how soon the Brexit talks can pivot towards a trade deal just a week before negotiations are set to resume. Adopting a provocative posture, U.K. Prime Minister Theresa May’s government declared at the weekend that it’s “stepping up pressure” on the bloc to shift the discussions away from the terms of separation as soon as October. The use of fighting words in the past has not budged the EU and in a sign the U.K. will be disappointed, Slovenian Prime Minister Miro Cerar told the Guardian that “the process will definitely take more time than we expected.”

Signs of fresh discord may unnerve investors after the pound last week under-performed all of its Group of 10 counterparts. By giving out more details of where it stands and spelling out its demands, the U.K. wants to change the narrative that it’s been too vague, and by doing so jolt the EU into talking trade sooner. With the clock ticking down to the U.K.’s March 2019 departure, and the two sides clashing over many key issues, Brexit Secretary David Davis seems bent on reviving a debate over whether talks should run in parallel rather than in the strict order the EU has laid out.

Such an ambition will draw short shrift from the EU. Its chief negotiator, Michel Barnier, last week reiterated that the other 27 governments won’t allow trade talks to start until “sufficient progress” has been made resolving residency rights, the U.K.’s exit bill and the border with Ireland. The original hope was to reach this milestone in October – in time for a summit of EU leaders – but that is now in doubt amid criticism within the EU of sluggish progress and a lack of detail from the British. “There are so many difficult topics on the table, difficult issues there, that one cannot expect all those issues will be solved according to the schedule made in the first place,” Slovenia’s Cerar told the Guardian. “What is important now is that the three basic issues are solved in reasonable time.”

Read more …

The NAFTA talks may well end up being as tough as the Brexit ones.

NAFTA Negotiations Start in Secrecy. Lobbying Heats Up (WS)

The first round of re-negotiating the North American Free Trade Agreement between the US, Canada, and Mexico began on Wednesday and is scheduled to last through Sunday. And the one thing we know about it is this: Despite promises in March by US Trade Representative Robert Lighthizer (USTR) that the negotiations would be transparent, the USTR now considers the documents and negotiations “classified” and they’ll be cloaked in secrecy. But corporate lobbyists have access. And they’re all over it. The Electronic Frontier Foundation put it this way: “Once again, following the failed model of the Trans-Pacific Partnership (TPP), the USTR will be keeping the negotiating texts secret, and in an actual regression from the TPP will be holding no public stakeholder events alongside the first round. This may or may not set a precedent for future rounds, that will rotate between the three countries every few weeks thereafter, with a scheduled end date of mid-2018.”

But during his confirmation hearing in March, Lighthizer had promised to make the negotiations transparent and to listen to more stakeholders and the public. The EFF reported at the time that in response to Senator Ron Wyden question – “What specific steps will you take to improve transparency and consultations with the public?” – Lighthizer replied in writing: “If confirmed, I will ensure that USTR follows the TPA [Trade Promotion Authority, aka. Fast Track] requirements related to transparency in any potential trade agreement negotiation. I will also look forward to discussing with you ways to ensure that USTR fully understands and takes into account the views of a broad cross-section of stakeholders, including labor, environmental organizations, and public health groups, during the course of any trade negotiation.

He said that “we can do more” to ensure that we “have a broad and vigorous dialogue with the full range of stakeholders in our country.” Senator Maria Cantwell tried to have Lighthizer address the skewed Trade Advisory Committees that currently advise the USTR, by asking: “Do you agree that it is problematic for a select group of primarily corporate elites to have special access to shape US trade proposals that are not generally available to American workers and those impacted by our flawed trade deals?” Lighthizer replied: “It is important that USTR’s Trade Advisory Committees represent all types of stakeholders to ensure that USTR benefits fully from a diverse set of viewpoints in considering the positions it takes in negotiations.”

Read more …

You’re being played.

Beware the “The Cultural Civil War” Narrative (CHS)

The play is as old as civilization itself: conjure up extremists (paying them when necessary), goad the formation of opposing extremists, then convince the populace that these extremists have been normalized, i.e. your friends and neighbors already belong to one or the other. This normalization then sets up the relentless demands to choose a side – the classic techniques of misdirection and false choice. Just as you’re sold a triple-bacon cheeseburger or a hybrid auto, you’re being sold a completely fabricated cultural civil war. There have always been extremists on every edge of the ideological spectrum, just as there have always been religious zealots. In a healthy society, these fringe pools of self-reinforcing fanaticism are given their proper place: they are outliers, representing self-reinforcing black holes of confirmation bias of a few.

In times of social, political and financial stress, such groups pop up like mushrooms. In times of media saturation, a relative handful can gain enormous exposure and importance because the danger they pose sells adverts and attracts eyeballs/viewers. Add a little fragmentation, virtue-signaling, demands for ideological conformity and voila, you get a deeply fragmented and deranged populace that is incapable of recognizing the dire straits it is in or recognizing the structural sources of its impoverishment and powerlessness. In other words, you get an easily mallable populace at false war with itself.

There is always common ground for those who dare to seek it. The Powers That Be are blowing up the bridges as fast as they can, whipping up fear and hatred of the Other, fanning the flames of extremism and claiming extremists are now normalized and everywhere. All of this is false. Would you buy an entirely manipulated cultural civil war if it was advertised as such? If not, then don’t buy into the false (but oh so useful to the ruling elites) narrative of an “inevitable cultural Civil War.”

Read more …

Excellent piece by G. Mark Towhey, “a key player on the team that helped elect Rob Ford as mayor of Toronto”.

Rob Ford, Donald Trump and the New Direction of Political Polarization (Towhey)

You are not a typical American. Not even close. The typical American doesn’t read lengthy articles in policy journals. The typical American gets up far too early in the morning, after too little sleep, works too hard for too long in a job that pays too little, before heading home, feeding the kids, cleaning the house, and collapsing into bed far too late. He or she has precious little time to consume news: a fleeting glimpse of pithy headlines, maybe a two-minute newscast on the radio if they drive to work or a few minutes of local TV news—mostly weather and sports scores. It is through this lens that typical Americans view the world beyond their personal experience and that of friends and family. It’s through this lens that they assess their government and judge their politicians.

These are the typical Americans who elected Donald Trump. They weren’t alone in voting for Trump, and they didn’t cast their ballots by mistake. They chose Trump because, out of the available alternatives, he best represented their view of the world. I am not a typical American, either. In fact, I’m a Canadian. I was a key player on the team that helped elect Rob Ford as mayor of Toronto—North America’s fourth largest city. I helped him craft a campaign platform that resonated with typical Torontonians and, later, helped him translate that platform into an actionable governing agenda. I helped him get things done. Three years later, Ford fired me as his chief of staff when I insisted that he go to rehab to address the personal demons that were destroying both him and his mayoralty. My experience with Ford has given me an unusual perspective on the recent presidential election, the Trump phenomenon, and the rise of a new and powerful political force that favors unorthodox candidates.

No, you and I are not typical at all. We have time to read (and, apparently, to write) long-form articles in policy journals. We can pause our breadwinning labor and child-rearing duties long enough to consider hypotheticals and to ruminate, now and then, on an idea or two. We may not recognize this as a luxury in our modern world, but we should. Amid all that rumination, however, we rarely stop to think that what motivates us does not necessarily excite typical Americans, the people who elected Donald Trump some six years after their northern cousins elected Rob Ford in Toronto. Almost by mistake, this bloc of typical citizens—overstressed, under-informed, concerned more with pragmatic quality of life issues than idealistic social goals—has become a powerful political movement. And we didn’t see them coming. Conventional political leaders seem to completely misunderstand them, and even their own champions often appear to disrespect them. They do so at their peril.

In 2010, Rob Ford was a dark horse candidate in the race to be mayor of Toronto. He later became internationally notorious for his very public battles with drug addiction and frequent appearances as a punch line in late-night television monologues. But his 2010 campaign was based on his understanding of the struggles typical residents endured and their limited time for politics. Ford boiled his campaign down to “Respect for Taxpayers” and “Stop the Gravy Train.” His message was concise and understandable. It fit on a bumper sticker. It could be passed by word of mouth from one person to the next without loss of meaning or impact. That it meant something different to everyone was not a weakness but a strength—no matter what you thought the “gravy train” was, everyone wanted it stopped.

Read more …

In case you want to know Absolutely Everything about the eclipse, here’s Stephen Wolfram.

When Exactly Will the Eclipse Happen? (Wolfram)

A total solar eclipse occurs when the Moon gets in front of the Sun from the point of view of a particular location on the Earth. And it so happens that at this point in the Earth’s history the Moon can just block the Sun because it has almost exactly the same angular diameter in the sky as the Sun (about 0.5° or 30 arc-minutes). So when does the Moon get between the Sun and the Earth? Well, basically every time there’s a new moon (i.e. once every lunar month). But we know there isn’t an eclipse every month. So how come? Well, actually, in the analogous situation of Ganymede and Jupiter, there is an eclipse every time Ganymede goes around Jupiter (which happens to be about once per week). Like the Earth, Jupiter’s orbit around the Sun lies in a particular plane (the “Plane of the Ecliptic”).

And it turns out that Ganymede’s orbit around Jupiter also lies in essentially the same plane. So every time Ganymede reaches the “new moon” position (or, in official astronomy parlance, when it’s aligned “in syzygy”—pronounced sizz-ee-gee), it’s in the right place to cast its shadow onto Jupiter, and to eclipse the Sun wherever that shadow lands. (From Jupiter, Ganymede appears about 3 times the size of the Sun.) But our moon is different. Its orbit doesn’t lie in the plane of the ecliptic. Instead, it’s inclined at about 5°. (How it got that way is unknown, but it’s presumably related to how the Moon was formed.) But that 5° is what makes eclipses so comparatively rare: they can only happen when there’s a “new moon configuration” (syzygy) right at a time when the Moon’s orbit passes through the Plane of the Ecliptic.

Read more …

Jun 012017
 
 June 1, 2017  Posted by at 9:45 am Finance Tagged with: , , , , , , , , ,  1 Response »


Ted Russell James Baldwin and Bob Dylan 1963

 

America Is Racing Toward Peak Polarization (NYMag)
US Middle Class Is Now The Company Store Class (Michael Hudson)
Theresa May’s Lead Slashed To Record Low Of Three Points In New Poll (Ind.)
Does Theresa May Pass The Turing Test? (PH)
Terror In Britain: What Did The Prime Minister Know? (John Pilger)
UK Policymakers Face A Dilemma Over Public’s Slowing Demand For Credit (G.)
UK Comes Bottom Of G7 Growth League, Canada Takes Lead (G.)
Europe May Finally Rethink NATO Costs (McGovern)
NATO Allies Can Spend More Money, More Wisely (BBG)
Oil Prices Crushed As Traders Bet Against OPEC, Russia (CNBC)
Fitch Warns Baidu Faces “Default Risk” Due To Growing Shadow Banking Business (ZH)

 

 

Very true of course, but what’s this worth coming from a polarized view?

America Is Racing Toward Peak Polarization (NYMag)

There is a venerable, centrist point of view that partisan polarization is a function of Washington’s warring politicians, who inflate artificial differences into causes for political war. Out there in the country, it is thought, Americans simply want politicians to come together and work out sensible, centrist policies. Whatever this gospel’s general applicability, it is increasingly clear that in the era of Donald Trump it’s The People who are even more polarized than their representatives in Washington. A new poll from Morning Consult for Politico has this jarring news: after the president’s first overseas trip, his job approval ratings rose. But so, too, did the percentage of Americans who want impeachment proceedings against him to begin post-haste.

Indeed, we are rapidly approaching the point where Americans are basically divided between those who think the president’s doing a good job (45% at present), and those who think he should be removed from office before his first term ends (43% at present). Unsurprisingly, these sentiments closely match partisan preferences. According to this same poll, 82% of self-identified Republicans approve of Trump’s job performance, 46% of them strongly. 79% of self-identified Democrats disapprove of Trump’s job performance, 65% of them strongly. These grassroots Americans are really, really at odds. That becomes even more obvious when the possibility of impeachment is introduced. Seventy-one% of Democrats want Congress to initiate impeachment proceedings.

Over half of these impeachment supporters say he’s unfit to serve, whether or not he has committed an impeachable offense. 76% of Republicans oppose the idea. For all the talk about anti-Trump Republicans and moderate Democrats, the truth is there is not a lot of support out there for anything other than the highly partisan approach Trump and the congressional GOP have taken this year, and for what some Democrats have called “the resistance.”

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Empty bags can get heavy.

US Middle Class Is Now The Company Store Class (Michael Hudson)

Students usually don’t think of themselves as a class. They seem “pre-class,” because they have not yet entered the labor force. They can only hope to become part of the middle class after they graduate. And that means becoming a wage earner – what impolitely is called the working class. But as soon as they take out a student debt, they become part of the economy. They are in this sense a debtor class. But to be a debtor, one needs a means to pay – and the student’s means to pay is out of the wages and salaries they may earn after they graduate. And after all, the reason most students get an education is so that they can qualify for a middle-class job. The middle class in America consists of the widening sector of the working class that qualifies for bank loans – not merely usurious short-term payday loans, but a lifetime of debt.

So the middle class today is a debtor class. Shedding crocodile tears for the slow growth of U.S. employment in the post-2008 doldrums (the “permanent Obama economy” in which only the banks were bailed out, not the economy), the financial class views the role industry and the economy at large as being to pay its employees enough so that they can take on an exponentially rising volume of debt. Interest and fees (late fees and penalties now yield credit card companies more than they receive in interest charges) are soaring, leaving the economy of goods and services languishing. Although money and banking textbooks say that all interest (and fees) are a compensation for risk, any banker who actually takes a risk is quickly fired. Banks don’t take risks. That’s what the governments are for. (Socializing the risk, privatizing the profits.)

Anticipating that the U.S. economy may be unable to recover under the weight of the junk mortgages and other bad debts that the Obama administration left on the books in 2008, banks insisted that the government guarantee all student debt. They also insisted that the government guarantees the financial gold-mine buried in such indebtedness: the late fees that accumulate. So whether students actually succeed in becoming wage-earners or not, the banks will receive payments in today’s emerging fictitious “as if” economy. The government will pay the banks “as if” there is actually a recovery. And if there were to be a recovery, then it would mean that the banks were taking a risk – a big enough risk to justify the high interest rates charge on student loans.

This is simply a replay of what banks have negotiated for real estate mortgage lending. Students who do succeed in getting a job hope to start a family, or at least joining the middle class. The most typical criterion of middle-class life in today’s world (apart from having a college education) is to own a home. But almost nobody can buy a home without getting a mortgage. And the price of such a mortgage is to pay up to 43% of one’s income for thirty years, that is, one’s prospective working life (in today’s as-if world that assumes full employment, not just a gig economy).

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Boy, is she doing a bad job. Calling an election and not showing up. And yeah, we get it: if she would show up, numbers would be even worse. On Twitter: “A Ladbrokes customer in Chelsea has just had £2,000 at 100/1 for Boris Johnson to be PM on July 1st. #GE2017

Theresa May’s Lead Slashed To Record Low Of Three Points In New Poll (Ind.)

Labour is closing the gap with Tories and now stands just three points from Theresa May’s party, a new YouGov poll shows. The poll, commissioned by The Times, found the Conservative lead has slipped dramatically in recent weeks and is now within the margin of error. The figures show the Conservatives on 42 points but Labour are close behind on 39. Meanwhile, the Liberal Democrats are struggling to maintain the momentum of their “fightback” as they slip to just 7% vote share. The poll points to a remarkable change in fortunes for the Tories, which had a 24-point lead over Labour when the snap general election was called in April. Ms May has struggled in recent weeks after she was forced into an embarrassing U-turn over plans to reform social care in the party’s manifesto.

The party said elderly people who needed care will be able to put off playing for it until after their deaths so they could potentially stay in their own home for as long as possible. But critics said this would unfairly penalise people who suffer a slow decline from illnesses like dementia, over people who die suddenly and can then leave their estate to their children. Ms May has faced criticism for refusing to to engage with voters, especially after she declined to take part in televised debates. During the debate, Green party leader Caroline Lucas said: “You don’t call a general election and say it is the most important election in her lifetime and then not even be bothered to debate the issues at hand.” She added: “I think the first rule of leadership is to show up.”

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Fitting comment on Twitter to the original title “Three minutes of nothing”: “Does this pass the Turing test?”

Does Theresa May Pass The Turing Test? (PH)

Before 8.30am today, I had never interviewed a Prime Minister. Heading back to the office to transcribe my encounter with Theresa May at Plymouth’s fish market, I couldn’t be certain that had changed. To start with, it was quite an exciting experience. We got the call late on Tuesday night, and the visit was kept totally secret until her arrival. We waited in the drizzle as she chatted with fishermen and nodded earnestly at nets and buckets, leopard print heels click-clacking on the harbour floor. ired-looking campaign managers hurried back and forth, mulling over our request for a filmed interview which had been denied on her previous visit. Then suddenly we were on. I had a list of four questions, all on local issues, carefully prepared with the help of my newsroom colleagues.

Two visits in six weeks to one of the country’s most marginal constituencies – is she getting worried?

May: “I’m very clear that this is a crucial election for this country.”

Plymouth is feeling the effects of military cuts. Will she guarantee to protect the city from further pain?

May: “I’m very clear that Plymouth has a proud record of connection with the armed forces.”

How will your Brexit plan make Plymouth better off?

May: “I think there is a better future ahead for Plymouth and for the whole of the UK.”

Will you promise to sort out our transport links?

May: “I’m very clear that connectivity is hugely important for Plymouth and the South West generally.”

I was pleased to have secured the interview and happy to have squeezed all my points in. But no sooner had the ministerial car pulled away from Sutton Harbour than I began to feel a bit deflated. If the ultimate job of a journalist is to get answers, I had failed. Should I have stopped her and demanded she be more specific? Could I have gone full angry Paxman, or brought the interview to an abrupt close in protest? Back at the office, we scratched our heads and wondered what the top line was. She had and given me absolutely nothing. It was like a postmodern version of Radio 4’s Just A Minute. I pictured Nicholas Parsons in the chair: “The next topic is how Plymouth will be affected by Brexit, military cuts and transport meltdown. Theresa, you have three minutes to talk without clarity, candour or transparency. Your time starts now.”

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No, Theresa May in reality is not so funny or innocent.

Terror In Britain: What Did The Prime Minister Know? (John Pilger)

The unsayable in Britain’s general election campaign is this. The causes of the Manchester atrocity, in which 22 mostly young people were murdered by a jihadist, are being suppressed to protect the secrets of British foreign policy. Critical questions – such as why the security service MI5 maintained terrorist “assets” in Manchester and why the government did not warn the public of the threat in their midst – remain unanswered, deflected by the promise of an internal “review”. The alleged suicide bomber, Salman Abedi, was part of an extremist group, the Libyan Islamic Fighting Group, that thrived in Manchester and was cultivated and used by MI5 for more than 20 years. The LIFG is proscribed by Britain as a terrorist organisation which seeks a “hardline Islamic state” in Libya and “is part of the wider global Islamist extremist movement, as inspired by al-Qaida”.

The “smoking gun” is that when Theresa May was Home Secretary, LIFG jihadists were allowed to travel unhindered across Europe and encouraged to engage in “battle”: first to remove Mu’ammar Gadaffi in Libya, then to join al-Qaida affiliated groups in Syria. Last year, the FBI reportedly placed Abedi on a “terrorist watch list” and warned MI5 that his group was looking for a “political target” in Britain. Why wasn’t he apprehended and the network around him prevented from planning and executing the atrocity on 22 May? These questions arise because of an FBI leak that demolished the “lone wolf” spin in the wake of the 22 May attack – thus, the panicky, uncharacteristic outrage directed at Washington from London and Donald Trump’s apology.

The Manchester atrocity lifts the rock of British foreign policy to reveal its Faustian alliance with extreme Islam, especially the sect known as Wahhabism or Salafism, whose principal custodian and banker is the oil kingdom of Saudi Arabia, Britain’s biggest weapons customer. This imperial marriage reaches back to the Second World War and the early days of the Muslim Brotherhood in Egypt. The aim of British policy was to stop pan-Arabism: Arab states developing a modern secularism, asserting their independence from the imperial west and controlling their resources. The creation of a rapacious Israel was meant to expedite this. Pan-Arabism has since been crushed; the goal now is division and conquest.

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“The BoE has busted a gut to keep the mortgage market afloat with one scheme after another to subsidise everything from deposits to the lenders themselves. It must have been upsetting to see a fall in approvals for house purchases in April for the third month in a row.”

UK Policymakers Face A Dilemma Over Public’s Slowing Demand For Credit (G.)

As the election on 8 June nears, the debate has intensified over how much Britain’s frothy cappuccino-drinking economy can cope without endless dollops of interest-free credit. Financial regulators are worried about it. So are the debt charity workers who pick up the pieces when the debt merry-go-round grinds to a halt. And they should be worried. Many of the biggest, shiniest new cars zipping round UK streets would still be sitting on the garage forecourt without ultra cheap credit deals that rival mortgages for their rock-bottom rates. On the high street, shops have in recent years relied more heavily on consumers using their credit cards for big purchases. Back in 2014 these shoppers could avoid paying the 18.9% interest commonly applied to credit card balances and use the two, even three-year interest-free period many card operators allow.

As we know from recent experience, when debt bubbles burst, they hit everyone and drag the economy down into recession. The Bank of England’s most recent data for April shows that the mania for borrowing last year and the year before has paused somewhat since January. That should be seen as good news. Net mortgage lending is down at levels seen a year ago while unsecured borrowing on credit cards and loans has stabilised at a growth rate of of just over 10% a year. But not everybody at the Bank of England will be content to see consumers putting their credit cards in a drawer. The economists attached to the BoE’s interest rate-setting committee know the economy runs on debt. To adapt a well-known first world war poster, they know Britain needs borrowers. If a reminder of this basic economic rule was needed, it was made clear earlier this month when the latest UK GDP figures appeared.

The relative lack of borrowing in the first three months of the year coincided with a dive in GDP growth from 0.7% in the final quarter of 2016 to 0.2% in the first quarter of this year. The BoE has busted a gut to keep the mortgage market afloat with one scheme after another to subsidise everything from deposits to the lenders themselves. It must have been upsetting to see a fall in approvals for house purchases in April for the third month in a row. Now there are signs that the credit habit is returning as almost zero interest rates work their magic again, Easter’s spending is out of the way and wage rises are being outpaced by inflation. Analysts say GDP growth in Q2 will be higher for this very reason. Is that a return of consumer confidence with shoppers shrugging off the election, they ask? Or is it, as the debt charities suspect, cash-strapped consumers rolling over their debts and taking out a bit more credit just to get by?

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Yes, if you can’t get people to go deeper into debt, your growth shrinks. That’s economics these days.

UK Comes Bottom Of G7 Growth League, Canada Takes Lead (G.)

The UK has slumped to the bottom of the league table of advanced economies after Canada registered stellar growth in the first three months of the year. Canada was the final member of the G7 to report its growth figures, which confirmed the UK as officially the joint worst performing member so far this year. The announcement marked a significant decline for the UK economy, which a year ago was outshining Germany, the US and Japan. In February it was announced that Germany had pipped the UK as the fastest-growing G7 nation during 2016 by 10 basis points. However, the latest figures for Canada, which showed that growth accelerated to 0.9% in the first quarter, putting it top of the G7 performers, has left Britain languishing alongside Italy at the bottom of the table.

Germany is in second spot at 0.6%, followed by Japan with 0.5%, France 0.4% and the US at 0.3%. The UK and Italy are then level on growth of just 0.2%. The sluggish expansion in the first quarter provides the latest evidence that the early resilience to the EU referendum result last June is now wearing off as higher inflation puts consumers under pressure. Prices have been increasing since the Brexit vote because the referendum result sent the pound sharply lower and has raised the cost of imports to the UK. That higher inflation has hit household budgets and dented the main driver of UK growth, consumer spending. The Bank of England said earlier this month that it expected GDP growth would edge up marginally to 1.9% for 2017 from 1.8% in 2016. But it warned that living standards would fall this year because inflation would be higher than pay growth.

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NATO needs enemies or it will disappear.

Europe May Finally Rethink NATO Costs (McGovern)

President Donald Trump’s politically incorrect behavior at the gathering of NATO leaders in Brussels on Thursday could, in its own circuitous way, spotlight an existential threat to the alliance. Yes, that threat is Russia, but not in the customary sense in which Westerners have been taught to fear the Russian bear. It is a Russia too clever to rise to the bait – a Russia patient enough to wait for the Brussels bureaucrats and generals to fall of their own weight, pushed by financial exigencies in many NATO countries. At that point it will become possible to see through the West’s alarmist propaganda. It will also become more difficult to stoke artificial fears that Russia, for reasons known only to NATO war planners and neoconservative pundits, will attack NATO. As long as Russian hardliners do not push President Vladimir Putin aside, Moscow will continue to reject its assigned role as bête noire.

First a request: Let me ask those of you who believe Russia is planning to invade Europe to put down the New York Times for a minute or two. Take a deep cleansing breath, and try to be open to the possibility that heightened tensions in Europe are, rather, largely a result of the ineluctable expansion of NATO eastward over the quarter-century since the Berlin Wall fell in 1989. Actually, NATO has doubled in size, despite a U.S. quid-pro-quo promise in early 1990 to Russian leader Mikhail Gorbachev in early 1990 not to expand NATO “one inch” to the east of Germany. The quid required of Russia was acquiescence to a reunited Germany within NATO and withdrawal of the 300,000-plus Russian troops stationed in East Germany.

The US reneged on its quo side of the bargain as the NATO alliance added country after country east of Germany with eyes on even more – while Russia was not strong enough to stop NATO expansion until February 2014 when, as it turned out, NATO’s eyes finally proved too big for its stomach. A U.S.-led coup d’etat overthrew elected President Viktor Yanukovych and installed new, handpicked leaders in Kiev who favored NATO membership. That crossed Russia’s red line; it was determined – and at that point able – to react strongly, and it did.

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No, Bloomberg, spending more is not an answer to any serious question.

NATO Allies Can Spend More Money, More Wisely (BBG)

If Donald Trump and Barack Obama agree on something, does that mean it’s true? In the case of Europe’s woeful support of its collective defense, yes: Member states need to contribute their “fair share” toward the North Atlantic Treaty Organization, a phrase both men used in speeches in European capitals. The question is what “fair share” means. Instead of measuring how much member nations spend on their defense, NATO should pay more attention to how they spend it. The current definition – members are expected to spend at least 2% of GDP on defense – is both misleading and unfair. Currently, only four European members meet the alliance’s target and things are going the wrong direction. Across Europe, including non-NATO members, military spending as a percentage of GDP has dropped by almost 9% in the last five years.

But some kinds of military spending are better than others. Money for major training exercises, or transport planes and helicopters for airlift operations, is far more valuable than lots of spending on ill-equipped troops in glorified jobs programs. Spending on national defense is always going to reflect national priorities. That said, better coordination among member nations can bolster both their security and the alliance’s. A wealthy nation may want some shiny new fighter jets, but the collective defense may be better served by more prosaic equipment such as refueling tankers. To their credit, not only have the alliance’s newer members such as the Baltic States been paying up, they’ve been helpful in buying what NATO most needs. Arriving at a consensus as to what constitutes useful spending among 28 separate militaries would be contentious and difficult, to put it mildly. It would still be a useful exercise.

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Flip flop. Up down.

Oil Prices Crushed As Traders Bet Against OPEC, Russia (CNBC)

The oil market has serious doubts that the production deal between OPEC and Russia is sufficient enough to bring the world oil market back into balance, against a potential wave of new supply. As a result, traders appeared to be adding to short positions, as crude fell sharply Wednesday morning, analysts said. The decline in oil prices was triggered by news that Libya had increased its production to a three-year high of 827,000 barrels a day. “The game of chicken between them and the market is back on again,” said John Kilduff, partner at Again Capital. West Texas Intermediate crude for July settled off 2.7%, at $48.32 per barrel after briefly breaking $48. Brent, the international benchmark, dipped temporarily below the psychological $50 for the first time in two weeks, and was down 3% at $50.66 in afternoon trading.

Last week, Saudi Arabia and other members of OPEC agreed with Russia and other producers to extend their agreement to cut back output by 1.8 million barrels a day for another nine months. But market expectations had been hinging on the idea that producers would take even more barrels off the market because of the overhang of supply. Oil plunged 5% last Thursday, after the announcement. “The meeting was much more of a failure than people realize because of what wasn’t achieved. There are no caps on production for Libya, or Nigeria, or Iran,” said Kilduff. Libya has shipped an average of 500,000 barrels per day of oil so far this year, up from 300,000 per day last year. Production reached 800,000 barrels per day earlier this month.

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“Shadow bank run” is a good way to put it. I’ve been warning about Chinese shadown banking for years, and I haven’t been wrong. Baidu is a search engine, for pete’s sake… which “does not need to set aside large capital against potential defaults on its WMPs”… Beijing facilitates the shadows, and they in turn lend into the economy what Beijing’s state banks can’t do without raising bright red alarms.

Fitch Warns Baidu Faces “Default Risk” Due To Growing Shadow Banking Business (ZH)

Less than a week after Moody’s downgraded China’s sovereign credit rating, prompting an unprecedented currency response by the PBOC which as noted earlier resumed its crusade against Yuan shorts by sending CNH overnight deposit rates as high as 65%, on Wednesday another rating agency, Fitch, took aim at what many consider the weakest link in China’s financial system: the nearly $9 trillion in shadow banking “assets”, of which roughly $4 billion are Wealth Management Products. Just as surprising was the target of Fitch’s wrath: none other than China’s tech giant Baidu, which Fitch put on “negative watch” warning that the company’s financial services division faced increased risk of default as a result of its growing reliance on shadow banking in general and Wealth Management Products (WMPs) in particlar.

As reported previously, China’s popular WMPs offer a higher yielding alternative to conventional financial instruments by bundling together investments into money market bonds, corporate loans and many other products, all of which are usually a mystery to the buyer. As of 2016, China had nearly 30 trillion yuan outstanding in WMPs. Baidu, China’s dominant search engine, has not been immune to the scramble for funding optionality provided by shadow banking alternatives, and has been getting into the WMP game by rapidly expanding its Financial Services Group, which Fitch says is increasing Baidu’s overall business risk. While Baidu is not under obligation to pay the returned target on these products, a failure could be potentially damaging to Baidu’s reputation, Fitch warned.

As with Chinese banks, Baidu does not need to set aside large capital against potential defaults on its WMPs … WMPs have become an alternative form of financing for projects or investments that would not qualify for bank loans,” Fitch said. This could lead to an increased risk of default or “shadow bank run”, since many of the bundled assets are of poor quality and would not qualify for bank loans. The WMP warning from Fitch came less than two weeks after Moody’s also put Baidu’s corporate debt on watch for a potential downgrade. WMPs have been behind the staggering surge in total assets of Baidu’s Financial Services Group, which have more than doubled to CNY25 billion in the period ended April 2017.

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