May 042018
 
 May 4, 2018  Posted by at 8:32 am Finance Tagged with: , , , , , , , , , , , , , ,  


Herri met de Bles c1510-after 1555 Saint Jerome medidating

 

Fed’s QE Unwind Accelerates Sharply (WS)
The Root of It All (Batnick)
Tesla Is A Zombie Company (F.)
With No Letup In Home Prices, The California Exodus Surges (MW)
Demand For US Soybeans Remains Strong Despite China (CNBC)
US Charges VW Ex-CEO With Conspiracy And Fraud (G.)
Mueller’s Questions for Trump Show Folly of Special-Counsel Appointments (NR)
Why We Need To Be Propagandized For Our Own Good (CJ)
Neocons Form Brand New Russia-Bashing ‘Think’ Tank (RI)
UK Pushes To Strengthen Anti-Russia Alliance (G.)
Nobel Prize For Literature Postponed Amid Swedish Academy Turmoil (BBC)
Jacinda Ardern Pledges Shelter For All Homeless People Within Four Weeks (G.)

 

 

As most voices seem convinced QT would be madness.

Fed’s QE Unwind Accelerates Sharply (WS)

The QE Unwind is ramping up toward cruising speed. The Fed’s balance sheet for the week ending May 2, released this afternoon, shows a total drop of $104 billion since the beginning of the QE Unwind in October – to the lowest level since June 11, 2014. During the years and iterations of QE, the Fed acquired $3.4 trillion in Treasury securities and mortgage-backed securities. The mortgages underlying those MBS are guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. The “balance sheet normalization,” as the Fed calls it, was nudged into motion last October. But the pace accelerates every quarter until it reaches up to $50 billion a month in Q4 this year.

This would trim the balance sheet by up to $420 billion this year, and by up to $600 billion in 2019 and every year going forward, until the Fed considers the balance sheet to be adequately “normalized” — or until something big breaks, whichever comes first. [..] The balance of Treasury securities fell by $17.6 billion in April. This is up 60% from March, when $11 billion “rolled off.” Since the beginning of the QE-Unwind, $70 billion in Treasuries “rolled off.” Now at $2,395 billion, the balance of Treasuries has hit the lowest level since June 18, 2014.

[..] Residential MBS are different from regular bonds. Holders receive principal payments on a regular basis as the underlying mortgages are paid down or are paid off. At maturity, the remaining principal is paid off. Over the years, to keep the MBS balance from declining, the New York Fed’s Open Market Operations (OMO) has been continually buying MBS. But settlement of those trades occurs two to three months later. The Fed books the trades on an as-settled basis. The time lag between the trade and settlement causes the large weekly fluctuations on the Fed’s balance sheet. And it also delays when MBS that “rolled off” actually disappear from the balance sheet.

[..] Total assets on the Fed’s balance sheet dropped by $30 billion in April, and by $104 billion since the beginning of the QE-Unwind, to $4,356 billion. This is the lowest since June 11, 2014. Note that total assets are now down by $160 billion from the peak in January 2015:

Read more …

“The poor stay poor, the rich get rich. That’s how it goes. Everybody knows.”

The Root of It All (Batnick)

Steven Pinker wrote, “In almost every year from 1992 through 2015, an era in which the rate of violent crime plummeted, a majority of Americans told pollsters that crime was rising. In late 2015, large majorities in eleven developed countries said that “the world is getting worse.” But crime isn’t rising, and the world is objectively getting better. And while life is improving at the macro level, at the micro level, people aren’t feeling so great. So what gives? We tend to expect the worst as a way to insulate ourselves from disappointment. Life is not about good or bad, it’s about better or worse, so if things don’t turn out as bad as we imagine, we’re pleasantly surprised. If you were asked to think about how your life could improve, a few things might come to mind.

But imagine how your life could get worse, and a barrage of negative possibilities fills your brain. The risk and reward of every day life is asymmetrical. This is why being a pessimist feels safe and being an optimist feels reckless. [..] While the news certainly isn’t doing anyone any favors, there are legitimate reasons why people don’t feel like things are getting better. For too many, they aren’t. The chart below shows the change in real income since 1980. This chart is the root of all the negative things facing our society. People in the top 20% saw their income increase by 60%. People in the bottom 20% saw their income rise by just 5% over the same time. As Leonard Cohen said, “The poor stay poor, the rich get rich. That’s how it goes. Everybody knows.”

Real income increased 38% from 1980-2016, or just 0.87% per year, and 70% of that increase went to people in the top 20%. Things are better, especially around the world, but in our country, way too many people are getting left behind. Extreme poverty is collapsing, but relative poverty is exploding, and everything in life is relative. If things don’t feel better than they were two hundred years ago, it’s because people compare themselves to their neighbors, not to their ancestors.

Read more …

As simple as that.

Tesla Is A Zombie Company (F.)

Tesla’s quarter was terrible from a financial perspective, as I had expected. The controlling figure I use, operating cash flow (operating loss plus depreciation minus capital expenditures,) was reported as -$836 million in the quarter, which very nearly approximates one quarter of 2017’s full year cash outflow of $3.4 billion. Things are not improving at Tesla from a financial perspective, and the second quarter is likely to be just as bad as the first. For the third consecutive quarter, Tesla posted negative EBITDA (-$180 million) and if this were any other company, there would be an active death watch on the Street. Tesla’s bonds have dropped sharply in today’s trading, now quoted at 87 cents on the dollar.

This is not surprising given that Tesla is not even remotely close to earning enough profit to cover its interest expense, which management estimated would be $160 million in the second quarter. Tesla added $346 million to its now $10 billion debt pile in the quarter, and the management’s weasel-worded projection of “positive net income excluding non-cash stock based compensation in Q3 and Q4” would still leave Tesla short of covering its debt service costs, by my calculations. So, from a financial perspective, Tesla is a zombie company. There is simply no justification for Tesla’s current market capitalization of $47.2 billion, and the market eventually figures these things out. It’s actually been a slow burn for Tesla shares, not a plummet, but that can be just as painful.

On September 12, 2014, Teslashares closed at $279.20 and the Nasdaq Composite closed at 4567.60. As of this writing, Tesla is trading at $279.04 and the Nasdaq is trading at 7011.00. So that’s where the value destruction Musk has wrought is evident. His shares are down slightly in a period in which his peer companies have collectively risen 53.5%.

Read more …

Housing bubbles break communities.

With No Letup In Home Prices, The California Exodus Surges (MW)

Over a million more people moved out of California from 2006 to 2016 than moved in, according to a new report, due mainly to the high cost of housing that hits lower-income people the hardest. “A strong economy can also be dysfunctional,” noted the report, a project of Next 10 and Beacon Economics. Housing costs are much higher in California than in other states, yet wages for workers in the lower income brackets aren’t. And the state attracts more highly-educated high-earners who can afford pricey homes. There are many reasons for the housing crunch, but the lack of new construction may be the most significant.

According to the report, from 2008 to 2017, an average of 24.7 new housing permits were filed for every 100 new residents in California. That’s well below the national average of 43.1 permits per 100 people. If this trend persists, the researchers argued, analysts forecast the state will be about 3 million homes short by 2025. California homeowners spend an average of 21.9% of their income on housing costs, the 49th worst in the nation, while renters spend 32.8%, the 48th worst. The median rent statewide in 2016 was $1,375, which is 40.2% higher than the national average. And the median home price was — wait for it — more than double that of the national average.

Read more …

Globally, supple has a hard time keeping up with demand. Everybody involved knows this.

Demand For US Soybeans Remains Strong Despite China (CNBC)

Demand for U.S. soybeans remains strong, regardless of worries China could target the crop in retaliation over Trump administration tariffs. China has canceled several shipments of U.S. soybeans in the last month, raising questions over whether the country is taking preemptive action against the U.S. by reducing purchases. But analysts say the reduction is a minor amount and is not that surprising from a seasonal perspective. The “U.S. accounts for 37 percent of total soybean exports throughout the world. Beyond Brazil, there’s really nobody else,” said Rich Nelson, director of research at Allendale, an agricultural market research and trading firm. “Despite the trade concerns, there’s really nobody else. You’re just simply not going to have a massive decline in U.S. soybean exports,” he said.

Chinese cancellations of U.S. soybean orders for the week ended April 26 resulted in a decline of 133,700 metric tons in net sales to China, USDA Foreign Agricultural Service data showed Thursday. But 66,000 metric tons of those soybeans were sent to Vietnam instead, the data showed. Meanwhile, the U.S. sold 82,700 metric tons of soybeans in new sales to Mexico, 68,800 to Taiwan, 60,000 to Argentina and 52,600 to the Netherlands. Although Argentina is the third-largest exporter of soybeans, a severe drought has reduced production by 7 million tons to 40 million, according to USDA estimates. “That just goes to show we’re not dependent on China for soybean exports,” said Michael Stumo, head of Coalition for a Prosperous America, a nonprofit representing the interests of those in manufacturing, agriculture and labor unions.

Read more …

Germany doesn’t extradite its citizens.

US Charges VW Ex-CEO With Conspiracy And Fraud (G.)

US authorities have charged Volkswagen’s former chief executive officer Martin Winterkorn with conspiracy and wire fraud in relation to the car company’s efforts to cheat on US diesel emissions tests. Winterkorn, who resigned in 2015 as the scandal was revealed, conspired to defraud the US and violate the Clean Air Act, federal laws designed to control air pollution, according to an indictment unsealed on Thursday in a Michigan federal court. Five other VW executives were also charged in the indictment. He becomes the highest-ranking executive to be charged over “dieselgate” – a scheme where VW used software to trick government emissions testers.

“The indictment unsealed today alleges that Volkswagen’s scheme to cheat its legal requirements went all the way to the top of the company,” said US attorney general Jeff Sessions. “These are serious allegations and we’ll prosecute this case to the full extent of the law.” When news of the scheme broke Winterkorn said he was “stunned that misconduct on such a scale was possible in the Volkswagen Group”. He denied any knowledge of the scandal – which was used to evade pollution limits on nearly 600,000 diesel vehicles. Last December, Oliver Schmidt, a senior Volkswagen executive, was jailed for seven years and fined $400,000 for his part in the scheme. Schmidt, who had returned to Germany, was arrested while on holiday in Florida. VW pleaded guilty as a corporation in March, agreeing to pay a record $4.3bn in fines.

Read more …

“If Bob Mueller wants that kind of control over the executive branch, he should run for president. Otherwise, he is an inferior executive official who has been given a limited license — ultimately, by the chief executive — to investigate crime. If he doesn’t have an obvious crime, he has no business inventing one, much less probing his superior’s judgment. He should stand down.”

Mueller’s Questions for Trump Show Folly of Special-Counsel Appointments (NR)

I am assuming the authenticity of the questions that Special Counsel Robert Mueller reportedly wants to ask President Trump. The questions indicate that, after a year of his own investigation and two years of FBI investigation, the prosecutor lacks evidence of a crime. Yet he seeks to probe the chief executive’s motives and thought processes regarding exercises of presidential power that were lawful, regardless of one’s view of their wisdom. If Bob Mueller wants that kind of control over the executive branch, he should run for president. Otherwise, he is an inferior executive official who has been given a limited license — ultimately, by the chief executive — to investigate crime. If he doesn’t have an obvious crime, he has no business inventing one, much less probing his superior’s judgment. He should stand down.

The questions, reported by the New York Times, underscore that the special counsel is a pernicious institution. Trump should decline the interview. More to the point, the Justice Department should not permit Mueller to seek to interrogate the president on so paltry and presumptuous a showing.

When should a president be subject to criminal investigation? It is a bedrock principle that no one is above the law. The Framers made clear that this includes the president. But, like everything else, bedrock principles do not exist in a vacuum. They vie with other principles. Two competing considerations are especially significant here. First, our law-enforcement system is based on prosecutorial discretion. Under this principle, the desirability of prosecuting even a palpable violation of law must be balanced against other societal needs and desires. We trust prosecutors to perform this cost-benefit analysis with modesty about their mission and sensitivity to the disruption their investigations cause.

Second, the president is the most essential official in the world’s most consequential government. That government’s effectiveness is necessarily compromised if the president is under the cloud of an investigation. Not only are the president’s personal credibility and capability diminished; such an investigation discourages talented people from serving in an administration, further undermining good governance. The country is inexorably harmed because a suspect administration’s capacity to execute the laws and pursue the interests of the United States is undermined.

Read more …

Caitlin Johnstone on the Atlantic Council.

Why We Need To Be Propagandized For Our Own Good (CJ)

I sometimes try to get establishment loyalists to explain to me exactly why we’re all meant to be terrified of this “Russian propaganda” thing they keep carrying on about. What is the threat, specifically? That it makes the public less willing to go to war with Russia and its allies? That it makes us less trusting of lying, torturing, coup-staging intelligence agencies? Does accidentally catching a glimpse of that green RT logo turn you to stone like Medusa, or melt your face like in Raiders of the Lost Ark? “Well, it makes us lose trust in our institutions,” is the most common reply. Okay. So? Where’s the threat there? We know for a fact that we’ve been lied to by those institutions. Iraq isn’t just something we imagined. We should be skeptical of claims made by western governments, intelligence agencies and mass media. How specifically is that skepticism dangerous?

Trying to get answers to such questions from rank-and-file empire loyalists is like pulling teeth, and they are equally lacking in the mass media who are constantly sounding the alarm about Russian propaganda. All I see are stories about Russia funding environmentalists (the horror!), giving a voice to civil rights activists (oh noes!), and retweeting articles supportive of Jeremy Corbyn (think of the children!). At its very most dramatic, this horrifying, dangerous epidemic of Russian propaganda is telling westerners to be skeptical of what they’re being told about the Skripal poisoning and the alleged Douma gas attack, both of which do happen to have some very significant causes for skepticism.

When you try to get down to the brass tacks of the actual argument being made and demand specific details about the specific threats we’re meant to be worried about, there aren’t any to be found. Nobody’s been able to tell me what specifically is so dangerous about westerners being exposed to the Russian side of international debates, or of Russians giving a platform to one or both sides of an American domestic debate. Even if every single one of the allegations about Russian bots and disinformation are true (and they aren’t), where is the actual clear and present danger? No one can say. No one, that is, except the Atlantic Council.

Read more …

The entire MSM can’t get the job done?!

Neocons Form Brand New Russia-Bashing ‘Think’ Tank (RI)

A group of neocon heartthrobs have banded together with an eclectic array of Russiagaters to form a visionary organization committed to protecting Western democracy. You can also pre-order their book, according to their website. Chaired by pompous chess wizard turned Kremlinologist Garry Kasparov, the brand-new Renew Democracy Initiative (RDI) is the latest three-letter-initialism non-profit devoted to “the defense of democratic freedom and prosperity.” The trailblazing think tank has already sent shockwaves through Washington, DC and every European capital. Celebrated war cheerleader Max Boot, who serves on RDI’s board of directors, announced the creation of this highly original organization in a Washington Post op-ed.

Interestingly, the unveiling started with a laundry list of 10 other groups that are already “protesting Trump and championing democracy.” So why does the world need RDI, then? Because RDI is different – some might even say “special.” Unlike the dozens of other well-financed bastions of status-quo thinking, RDI aims to “unite both the center-left and center-right” by promoting “liberty, democracy and sanity in an age of discord.” And where will this much-needed sanity come from? From RDI’s all-star team of important intellectuals and free thinkers, of course – some of whom just happen to be really tight with the other 10 groups mentioned in Boot’s WaPo piece. Dear Mr. Boot: does fighting Putin with the Committee to Investigate Russia allow enough spare time to fight Putin with the Renew Democracy Initiative? Curious minds want to know.

Read more …

It’s contagious.

UK Pushes To Strengthen Anti-Russia Alliance (G.)

The UK will use a series of international summits this year to call for a comprehensive strategy to combat Russian disinformation and urge a rethink over traditional diplomatic dialogue with Moscow, following the Kremlin’s aggressive campaign of denials over the use of chemical weapons in the UK and Syria. British diplomats plan to use four major summits this year – the G7, the G20, Nato and the European Union – to try to deepen the alliance against Russia hastily built by the Foreign Office after the poisoning of the former Russian double agent Sergei Skripal in Salisbury in March. “The foreign secretary regards Russia’s response to Douma and Salisbury as a turning point and thinks there is international support to do more,” a Whitehall official said.

“The areas the UK are most likely to pursue are countering Russian disinformation and finding a mechanism to enforce accountability for the use of chemical weapons.” Former Foreign Office officials admit that an institutional reluctance to call out Russia once permeated British diplomatic thinking, but say that after the poisoning of Skripal and his daughter, Yulia, that attitude is evaporating. A cross-party alliance in parliament has developed which sees the question of Russian corruption no longer through the prism of finance, but instead as a security and foreign policy threat, requiring fresh sanctions even if this causes short-term economic damage to the UK.

[..] For some old hands in the Foreign Office with deep experience of Russia, however, demonising Russia is a disastrous strategy. Sir Anthony Brenton, the British ambassador to Russia between 2004 and 2008, insists a fruitful common agenda with Moscow on issues such as nuclear disarmament, Islamist terrorism and cyberwarfare is still possible. “What on earth was her majesty’s foreign secretary doing comparing the Russian World Cup with Hitler’s 1936 Olympics?” he asked. “If you are looking for a single statement really calculated to infuriate the Russians there it is, or indeed the defence secretary telling Russia to shut up. Elementary diplomacy goes a long way with the Russians and we need to get back to that.

Read more …

Still feels like a weird story.

Nobel Prize For Literature Postponed Amid Swedish Academy Turmoil (BBC)

The organisation that decides the Nobel Prize for Literature has said it will not announce an award this year, after it was engulfed in a scandal over sexual assault allegations. The Swedish Academy has been in crisis over its handling of allegations against the husband of a member. She has since quit, as have the academy’s head and four other members. The academy says it will now announce the 2018 winner along with the 2019 winner next year.

The scandal is the biggest to hit the prize since it was first awarded in 1901. The academy said the decision had been made due to a lack of public confidence. Some academy members had argued that the prize should proceed to protect the tradition, but others said the institution was in no state to present the award. Apart from six years during the world wars, there has been only one year when the prize was not awarded. No worthy winner was found in 1935.

Read more …

You go girl. The only right thing to do.

Jacinda Ardern Pledges Shelter For All Homeless People Within Four Weeks (G.)

The New Zealand government has promised to get the country’s homeless population off the streets and into shelter in time for winter. In a joint announcement on Friday, housing minister Phil Twyford and prime minister Jacinda Ardern announced a NZ$100m emergency housing package to tackle the ballooning problem. An estimated 40,000 people live in cars, tents and garages amid a chronic housing shortage in the nation of 4.7 million people. “We’re pulling out all the stops to support people in need and urgently increase housing supply this winter,” said housing minister Phil Twyford. “Our government will make sure everyone is helped to find warm, dry housing this winter.”

With winter starting on 1 June in the southern hemisphere, less than four weeks away, the government has put out an urgent call for anyone with additional accommodation that may be suitable to house homeless people. Seasonal worker accommodation such as shearers quarters, private rental properties, motor camps and maraes (Maori meeting houses) would all be considered. New Zealand has the highest rates of homelessness in the OECD, with more than 40,000 people living on the streets, in emergency housing or in substandard conditions. Per capita New Zealand’s homeless population is almost twice as bad as Australia, which is placed third on the list. More than half of New Zealand’s homeless population live in Auckland but it is also growing in smaller cities such as Rotorua, Tauranga, Queenstown and Wellington.

Read more …

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


Jacobello Alberegno The Beast of the Apocalypse 1360-90

 

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

Mar 132018
 
 March 13, 2018  Posted by at 10:33 am Finance Tagged with: , , , , , , , , , , , ,  


Mayfair Building, Times Square NYC 1954

 

Sea Change Is Underway in Money Markets for Banks, Investors (BBG)
The Real Reasons Trump Blocked Broadcom’s Qualcomm Takeover (CNBC)
Donald Trump’s Attack on German Prosperity (Spiegel)
Trump Pushes EU to Cut Tariffs as Bloc Vows to Resist ‘Bullies’ (BBG)
Trump’s Metal Tariffs ‘Like An Atomic Bomb’ For European Firms (CNBC)
Is The Dot.Com Bubble Back? (Roberts)
China Plans New Ministries, Merger Of Regulators In Massive Revamp (R.)
Central Banks Are Looking for New Ways to Meet Inflation Targets (BBG)
Labour’s Nationalisation Plans As Damaging As ‘No Deal’ Brexit – CBI (G.)
Another Quandary (Jim Kunstler)
Russian Foreign Ministry Slams UK’s Comments On Skripal Poisoning Case (Tass)
Saudis Reportedly Wielding Veto Power Over Prince Alwaleed (CNBC)
The Rich Aren’t Happy About New Zealand Foreign Bolthole Ban (BBG)
The Pentagon & Hollywood’s Successful And Deadly Propaganda Alliance (RT)
Krill Fishing Poses Serious Threat To Antarctic Ecosystem (G.)

 

 

Is this where central banks fail in their quest for control?

Sea Change Is Underway in Money Markets for Banks, Investors (BBG)

While many fixed-income investors may be focused on the specter of higher long-term Treasury yields, there’s a sea change afoot at the shorter end – in U.S. money markets. The London interbank offered rate, or Libor, and rates on Treasury bills are at levels not seen since 2008. The Fed’s move to tighten policy forms the backdrop for the increase, but an added force behind the surge this year has come from a deluge of supply as U.S. deficits widen. Higher short-term borrowing costs have implications for investors and also for banks, which find themselves paying up to borrow through the commercial-paper market as they compete to lure cash. “We are in a new paradigm,” said Jerome Schneider at Pimco. “The clear focus for the market is where will incremental demand come from to meet this supply.”

The Treasury has been jacking up debt sales this quarter: Net issuance is slated to exceed $400 billion, with the bulk coming in bills. The Treasury increased the 4-week bill sale to $65 billion, from as low as $15 billion earlier in the year. The march higher in Libor has widespread consequences despite regulatory efforts to replace it following a price-fixing scandal. About $350 trillion of financial products and loans are linked to Libor, with a large chunk hinged to the dollar-based version of the benchmark. Libor is among the main indexes, along with one-year T-bill rates, used to set U.S. adjustable-rate mortgages.

Assets in U.S. government-only money funds, which include bills among key holdings, have risen to $2.26 trillion, from $2.07 trillion last year. As the Fed keeps hiking, with the next move likely this month, the influx may continue. But for banks, the increasing appeal of T-bill rates is making them pay up to compete, through offering better returns on the commercial paper they use for short-term borrowing. “Banks still need funding and they need to entice investors,” Schneider said.

Read more …

Protectionism, national security. Where’s the anti-Trump lobby on this?

The Real Reasons Trump Blocked Broadcom’s Qualcomm Takeover (CNBC)

The threat of China factored heavily into the U.S. government’s decision to block Broadcom’s proposed buyout of Qualcomm. President Donald Trump, for his part, officially declared on Monday that the proposed $117 billion deal was prohibited on national security grounds. The president said in his order that “there is credible evidence” leading him to believe that Broadcom through control of San Diego-based Qualcomm “might take action that threatens to impair the national security of the United States.” That conclusion may seem extreme given that Broadcom is based in Singapore — and looking to redomicile to the U.S., where it conducts most of its operations — but it’s not a fear of the Southeast Asian city state that is raising national security concerns.

“The case that has been constructed is that, given Broadcom’s business practices, the worry is that they will cut investment significantly, particularly in the 5G roadmap, weaken Qualcomm, as well as the U.S. position and allow Huawei, a Chinese company to take the lead,” explained Stacy Rasgon, chip analyst at Bernstein. The Treasury Department said last week in a letter to lawyers involved in the deal that Qualcomm was trusted by the U.S. government and cited Huawei as a competitive threat in the development of 5G, which is a telecommunications standard that will allow for faster transfer of data. Beyond those 5G concerns, there’s even more to Trump’s decision to block the deal, experts said.

“It is not just China, it is not just chips. It is broad technology. It is U.S. military power and economic power going forward and he’s got a very consistent point of view,” said Ron Napier, head of Napier Investment Advisors. “Trump has been saying all year long since he was inaugurated that security is very important to him, technology is very important to him, trade is very important to him and getting jobs back to the United States is very important to him. He’s making this all into one fabric,” he added. “He sees this as the U.S.’ last big stand if it’s going to remain the leader of the free world,” Napier told CNBC.

Read more …

Far too much steep is produced every year. THAT is the problem.

Donald Trump’s Attack on German Prosperity (Spiegel)

The looming conflict is a sign of the turning point at which the global economy finds itself. Recently, the economy in most corners of the globe has been healthy, with the world experiencing a rare phase of synchronous growth. But it looks as though that phase is now coming to an end. Interest rates are rising and sovereign debt is growing, the result of which is that governments are beginning to lose their flexibility and it is likely that some countries will soon face difficulties borrowing money on the open market. Increasing financial market instability shows that insecurity is on the rise. And in this situation, protectionist policies pursued by populists and nationalists harm economic growth and endanger international prosperity.

It is something on which a majority of economists actually agree: tariff barriers slow growth, put jobs at risk and drive up inflation. Once a trade war is triggered, there is no winner, although Munich-based economist Gabriel Felbermayr says that Germany has the most to lose. “There is no other country in the world that would be hit as hard.” Felbermayr, 41, heads up the Center for International Economics at the Center for Economic Studies (CES). The shaved-headed economics professor, originally from Austria, has examined just how devastating Trump’s economic policies could be for the German economy. Every fourth job in the country, he says, is dependent on exports. And in five key sectors – automobiles, machinery, electrical engineering, pharmaceuticals and precision instruments – fully three-quarters of all exports go to the United States.

“If the U.S. were to cut itself off, it would threaten the German business model,” Felbermayr says. “Everything would start teetering.” [..] The global steel market has been imbalanced for years, with producers manufacturing 1.6 billion tons of crude steel each year against an annual demand of just 900 million tons. China is primarily to blame for this lopsidedness. Inexpensive energy and low wages enable the country’s steel producers to sell their products cheaply around the world. If the U.S. were to make moves to protect its domestic steel producers, even more cheap steel would flow into the EU than is already the case. Were that to happen, says Wolfgang Eder, head of the Austrian steel concern Voestalpine, “Europe would threaten to become the world’s garbage pail.”

Read more …

The EU vows to stand up to bullies. Ask the Greeks about that one. What kind of person has the guts to say that?

Trump Pushes EU to Cut Tariffs as Bloc Vows to Resist ‘Bullies’ (BBG)

The EU told U.S. President Donald Trump it won’t be cowed by his escalating protectionist rhetoric and talk of punitive tariffs. “Europe is prepared,” Dutch Finance Minister Wopke Hoekstra said Monday as he headed into a meeting with his counterparts from the rest of the euro area. “We are not afraid, we will stand up to the bullies,” Trade Commissioner Cecilia Malmstrom said earlier in the day. Trump returned to the offensive over the weekend, raising the prospect of higher levies on European cars and telling supporters at a rally that the countries of the EU have banded together “to screw the U.S. on trade.” The latest brinkmanship follows new tariffs on steel and aluminum imports that are straining a transatlantic relationship already tested by disputes from climate change to Middle East policy.

“Secretary of Commerce Wilbur Ross will be speaking with representatives of the European Union about eliminating the large Tariffs and Barriers they use against the U.S.A.,” Trump tweeted on Monday. “Not fair to our farmers and manufacturers.” Trump’s rhetoric drew unanimous condemnation from European finance ministers gathering in Brussels. France’s Bruno Le Maire said that he’s concerned about “a trade war between the EU and the U.S.” while his Spanish counterpart Roman Escolano, making his debut as minister, said protectionism is always a mistake. Malmstrom accused the Trump administration of using trade “to threaten and intimidate” Europeans and using the issue as a “scapegoat.”

A meeting in Brussels between Malmstrom and her U.S. counterpart Robert Lighthizer on Saturday ended without a breakthrough, as the EU didn’t receive assurances that it will be exempted from the metal tariffs. “If anyone starts throwing stones, it’s better first to make sure he’s not living in a glass house,” European Commission spokesman Enrico Brivio said.

Read more …

If even more Chinese steel floods into Europe, that is now Trump’s fault.

Trump’s Metal Tariffs ‘Like An Atomic Bomb’ For European Firms (CNBC)

Donald Trump’s decision to impose tariffs on steel and aluminum could cause major disruption for companies in Europe, a business lobbyist told CNBC Monday, who argued that the U.S. president should have taken less severe measures to protect his domestic market. U.S.’s allies, including the European Union and Japan, are hoping to be excluded from new tariffs that Trump announced last week. The decision to raise steel import taxes by 25% and aluminum by 10% could hurt not only those industries directly, but also carmakers and construction firms which use the raw materials. Trump decided that the tariffs would be the best way to deal with overcapacity in these sectors and based his argument on national security.

“This is a very exceptional mechanism that is rarely used. It’s a bit considered like an atomic bomb, because really to use this is like saying ‘look we are really at a level where we cannot use anti-dumping or anti-subsidies’,” Luisa Santos, the international relations director at BusinessEurope, told CNBC Monday. [..] European steel and aluminum businesses are reportedly preparing for a collapse in local prices if the tariffs are indeed applied to their region. Charles de Lusignan, from the Steel Association for Europe, said ultimately the tariffs could mean a scaling back in Europe, with firms letting people go, cutting investment and also innovation. “We need to act immediately because the damage will be done within the first weeks,” he said. “In fact it might already be happening, because obviously an exporter knows that the steel might be blocked in the future so they already start sending it ahead.”

Read more …

Not a relevant question.

Is The Dot.Com Bubble Back? (Roberts)

Whether you believe there is a “bubble” in the Technology stocks, or the markets, is really not important. There are plenty of arguments for both sides. At the peak of every bull market in history, there was no one claiming that a crash was imminent. It was always the contrary with market pundits waging war against those nagging naysayers of the bullish mantra that “stocks have reached a permanently high plateau” or “this is a new secular bull market.” (Here is why it isn’t.) Yet, in the end, it was something unexpected, unknown or simply dismissed that devastated investors. This is why the discussion of “this time is not like the last time” is largely irrelevant.

Individuals no longer “invest” to become a “shareholder” in a publicly traded business. The “quaint concept” of “valuations” died with the mainstreaming of investing during the 1990’s as the “Wall Street Casino” opened for business. Today, investors only think in terms of speculating on “electronically traded bits of paper” in the hopes the value will rise over time. The problem, of course, is they are never told when to “sell” to capture that valuation increase which is the most critical aspect of the investment process. Instead, individuals continue to “bet” the “greater fool” will always appear. For now, the “bullish case” remains alive and well. The media will go on berating those heretics who dare to point out the risks that prevail, but the one simple truth is “this time is indeed different.”

Read more …

There goes the last shred of transparency.

China Plans New Ministries, Merger Of Regulators In Massive Revamp (R.)

China said it will merge its banking and insurance regulators, according to a parliament document released on Tuesday, in a series of proposed changes in the biggest ministry shake-up in years. In a long-awaited move to streamline and tighten oversight of the financial system in the world’s second-biggest economy, China will also transfer some of the banking and insurance regulators’ roles to the central bank, documents showed. In much-anticipated plans to create seven new ministries and a raft of government agencies announced on Tuesday, one of the most significant changes was creation of the national markets supervision management bureau.

The new body will decide on antimonopoly and pricing issues, replacing the roles played by the three national antitrust regulators: the National Development & Reform Commission (NDRC), the Ministry of Commerce and the State Administration for Industry and Commerce (SAIC). Unifying the structure under one agency, rather than handing the responsibility to one of the three existing watchdogs, reflects the growing importance of the issue for the government. China will also form a powerful new competition regulator in a bid to ramp up oversight of mergers and acquisitions and price-fixing as the world’s second-largest economy seeks to make policymaking more efficient and coordinated. Since the beginning of last year, Beijing has cracked down on leverage and risky market practices, with China’s various regulators releasing a flurry of new rules in an attempt to rein in risks.

Read more …

Only, they don’t know what it is.

Central Banks Are Looking for New Ways to Meet Inflation Targets (BBG)

With so many central banks failing to hit their inflation targets, some are considering changes to the tool kits they use to steer their economies. Norway’s decision to lower its price target is just the latest example, and follows more or less official adjustments in Sweden, Argentina and the euro area. Even in New Zealand, the birthplace of inflation targeting, the central bank is shifting to a broader goal that includes a focus on employment. But there’s no one-fits-all solution for monetary authorities and debate is splintered. Raising inflation targets has been discussed equally intensively in recent years as reducing or amending them.

And while some central banks acknowledge a need to reconsider their mandates, others are doubling down on existing policies. Claudio Borio, a top official at the Bank for International Settlements, poured fuel on the debate in September with a provocative speech calling for a broad rethink that accounts for how globalization and technological advances have influenced inflation. “Shall we throw away the books?” ECB President Mario Draghi asked on Thursday. “There are serious costs about changing course on credibility and the anchoring of expectations. We can go on on this for a while about changing objective.”

Read more …

Think tanks are your friend.

Labour’s Nationalisation Plans As Damaging As ‘No Deal’ Brexit – CBI (G.)

The head of Britain’s biggest business lobby group has attacked Labour’s nationalisation plans as potentially just as damaging to the economy as Britain leaving the European Union without a deal. In a speech on Monday, Paul Drechsler, the CBI president, said renationalising large parts of the economy would cause serious harm to the UK’s reputation as a place for international investors, which he argued would be as bad as a hard Brexit and would damage job prospects and living standards. “So you want to nationalise energy, rail and water, and bring public services contracts back in house? Let’s see the evidence that it will deliver a better service to consumers at a lower cost,” he said.

The intervention by the lobby group – which represents about 190,000 companies, including transport and utility firms – constitutes a warning from the boardrooms of corporate Britain that they harbour concerns over Labour’s plans for the economy despite supporting the party over its stance on Brexit. The CBI was among leading business voices supporting Jeremy Corbyn’s move to keep Britain in a customs union with the EU. The lobby group warned before the referendum that Brexit could lead to almost a million job losses and cost the economy £100bn – the equivalent of 5% of GDP – by 2020. Drechsler challenged Labour to provide evidence that its plans would lead to a better service for consumers at a lower cost.

He said private investment had helped create jobs and improve the efficiency of utility companies since they were sold off under the Thatcher government of the 1980s, and argued that progress could be undone if they were taken back into state control. However, utility companies and railway operators have faced intense pressure over their service standards and prices at a time when households are under increasing financial strain. Public support has swung behind Labour’s plans for greater state control of several key industries – shown in recent polls that suggest widespread backing for nationalisation of the railways, water, gas and electricity.

Read more …

Mentally ill, cannabis.

Another Quandary (Jim Kunstler)

That crusty ole rascal, Gov. Jerry Brown of California, seems to be enjoying his sunset journey into Civil War Two or maybe the destination is more like Blade Runner (since we know that history only rhymes but does not repeat). Anyway, it’s not a good place. The once-golden state begins to look something like what one federal official recently called — dare I say it? — a shithole. “A mix of used hypodermic needles, human feces, and other trash litters the streets and sidewalks in a large section of downtown San Francisco, a local news outlet reported Sunday night. It’s a problem that has grown by epic proportions in recent years and has many concerned for the health and safety of some the city’s youngest residents…” — The Blaze

Yes, quite literally. This particular failure of the political Left started in the 1970s when states began aggressively shuttering their large mental hospitals. Many of these institutions dated from the late 19th century – ghastly old gothic revival warehouses for the mentally ill, fraught with overtones of abuse and neglect, scenes out of Vincent Price movies… lightning flashes through the barred windows… a scream in the night… hysterical laughter echoing down the dark, tiled hallways…. They were an embarrassment, for sure, and certainly an affront to liberal sensibilities. But, of course, they fucked up the remedy for that. Instead of replacing the giant old state insane asylums with smaller, better-managed institutions, they just released the inmates under the rationale that they were a politically oppressed minority group. And there it ended.

And so here we are, going on a half-century later, with an economy that manufactures failure and immiseration at a greater volume than its other finished products, and many more lost souls out on the city streets, and now we are an even more ideologically inflamed society than we were in 1973, with the ranks of intersectional oppressed minorities and aggrieved victim groups grown into virtual armies-of-the-night — and the mentally ill just lost in the crowd. It never seems to occur to anyone that a mental hospital can be run humanely, at an appropriate scale, and that these poor, sad creatures might, at least, be better off there with a bed, a bathroom, and somebody to check in on them daily than they are wallowing in the gutters of San Francisco and other cities. Surely there are up-to-date models in other lands for this kind of caretaking — if maybe we sent a few bureaucrats overseas to have a look.

Read more …

Who needs proof in an echo chamber? Whether it’s Theresa May or the House Intelligence case, the lines have been drawn long ago.

Russian Foreign Ministry Slams UK’s Comments On Skripal Poisoning Case (Tass)

Russian Foreign Ministry Spokeswoman Maria Zakharova has dubbed as a ‘circus show’ comments of UK Prime Minister Theresa May on the poisoning of Sergey Skripal, a former colonel in Russia’s GRU military intelligence, and his daughter. “This is a circus show in Britain’s parliament,” she stressed. “The conclusion is obvious – a next political media campaign based on provocation,” Zakharova added. Earlier, Theresa May said it is “highly likely” that Russia is responsible for the poisoning of Sergey Skripal and his daughter. Moscow urges London to make public the results of the investigation into the deaths of Alexander Litvinenko and Boris Berezovsky, Zakharova said.

“Before making up new stories, let somebody in the Kingdom tell us what the previous fairy-tales ended in – those about Litvinenko, Berezovsky, Perepilichny and many others who died under mysterious circumstances on British soil,” the diplomat said. Former GRU Colonel Sergey Skripal, 66, and his 33-year-old daughter Julia on March 4 suffered from the effects of an unidentified nerve agent. They were found in an unconscious condition on a bench near The Maltings shopping center in Salisbury. Both are now in hospital in critical condition.

In 2004, Skripal was arrested by the federal security service FSB, charged, tried and convicted of high treason and stripped of all ranks and awards. In 2010 he was handed over to the United States under an arrangement to exchange persons arrested on spying charges. Later in the same year Skripal settled in Britain.

Read more …

The price of freedom.

Saudis Reportedly Wielding Veto Power Over Prince Alwaleed (CNBC)

Prince Alwaleed Bin Talal remains chairman of Kingdom Holding Company following his release from detention, but the Saudi government reportedly has final say over decisions at the investment firm. Investment decisions at Kingdom Holding are now subject to approval by the government, The Wall Street Journal reported on Monday, citing senior Saudi advisers. Kingdom Holding has $12.5 billion invested across more than a dozen sectors around the world, according to its website. Alwaleed’s personal investment portfolio is also under government control, according to the Journal. Alwaleed holds substantial stakes in companies like Citigroup, Twitter, Lyft and Time Warner.

The Journal report does not indicate whether the government has exercised its newfound influence over these investments. However, sources tell the Journal the government has already intervened in a major real estate project, ordering senior managers at Kingdom Holding to abandon the Jeddah Tower, which would be the world’s tallest skyscraper when — and if — it is completed. Officials have directed Kingdom Holding to instead focus its energy on a new city called Neom, which is expected to cost $500 billion to build. The project was announced in October by Crown Prince Mohammed bin Salman, the influential king in waiting who is overseeing the kingdom’s economic transformation and spearheaded the campaign that led to Alwaleed’s detention.

Read more …

What happens when there’s only rich people left? Or: who cares about New Zealanders?

The Rich Aren’t Happy About New Zealand Foreign Bolthole Ban (BBG)

Rich-listers like Californian billionaire Ric Kayne have issued a warning to New Zealand – banning house sales to foreigners could hurt the country’s reputation and turn wealthy investors away. Kayne, who has built an exclusive golf course in New Zealand and wants to expand his investments, is one of several rich businessmen who claim the proposed new law will have unintended consequences. They’re seeking amendments to the draft legislation or its withdrawal in its current form. “The vision we have for what we would like to contribute to New Zealand is now being threatened,” Kayne wrote in submissions to a parliamentary committee examining the proposed law change.

“The new rules will “impact on us personally, and others like us who, having discovered this country, want to devote considerable resources to preserving, protecting and enhancing it.” The new Labour-led government came to power in October on a pledge to fix a housing crisis with a raft of measures, including a ban on foreign speculators buying residential property. While data suggest non-residents have only a minor impact on the wider housing market, support for the move was boosted by headlines about rich foreigners buying mansions and farms in New Zealand as boltholes away from the world’s ills.

House prices have surged more than 60% in the past decade amid record immigration and a construction shortfall. In biggest city Auckland, prices have almost doubled since 2007 to an average of more than NZ$1 million ($730,000). That’s made it more difficult for first-time buyers to enter the market and driven up rents, leaving increasing numbers of poor people homeless. “It’s really important for us that we sort our housing market out, that we give New Zealanders a fair go at buying their first home,” Finance Minister Grant Robertson said in a television interview Sunday. While the country welcomes foreign investment, “what we want is good-quality investment that supports the productivity of the New Zealand economy,” he said.

Read more …

Ethics and Hollywood.

The Pentagon & Hollywood’s Successful And Deadly Propaganda Alliance (RT)

The Pentagon helps Hollywood to make money and, in turn, Hollywood churns out effective propaganda for the brutal American war machine. The US has the largest military budget in the world, spending over $611 billion – far larger than any other nation on Earth. The US military also has at their disposal the most successful propaganda apparatus the world has ever known… Hollywood. Since their collaboration on the first Best Picture winner ‘Wings’ in 1927, the US military has used Hollywood to manufacture and shape its public image in over 1,800 films and TV shows. Hollywood has, in turn, used military hardware in their films and TV shows to make gobs and gobs of money.

A plethora of movies like ‘Lone Survivor,’ ‘Captain Philips,’ and even blockbuster franchises like ‘Transformers’ and Marvel, DC and X-Men superhero movies have agreed to cede creative control in exchange for use of US military hardware over the years. In order to obtain cooperation from the Department of Defense (DoD), producers must sign contracts that guarantee a military approved version of the script makes it to the big screen. In return for signing away creative control, Hollywood producers save tens of millions of dollars from their budgets on military equipment, service members to operate the equipment, and expensive location fees.

Capt. Russell Coons, director of the Navy Office of Information West, told Al Jazeera what the military expects for their cooperation: “We’re not going to support a program that disgraces a uniform or presents us in a compromising way.” Phil Strub, the DOD chief Hollywood liaison, says the guidelines are clear. “If the filmmakers are willing to negotiate with us to resolve our script concerns, usually we’ll reach an agreement. If not, filmmakers are free to press on without military assistance.”

Read more …

We’ve screwed up even the bottom of the food chain. Winning!

Krill Fishing Poses Serious Threat To Antarctic Ecosystem (G.)

Industrial fishing for krill in the pristine waters around Antarctica is threatening the future of one of the world’s last great wildernesses, according to a new report. The study by Greenpeace analysed the movements of krill fishing vessels in the region and found they were increasingly operating “in the immediate vicinity of penguin colonies and whale feeding grounds”. It also highlights incidents of fishing boats being involved in groundings, oil spills and accidents, which it said posed a serious threat to the Antarctic ecosystem. The report, published on Tuesday, comes amid growing concern about the impact of fishing and climate change on the Antarctic.

A global campaign has been launched to create a network of ocean sanctuaries to protect the seas in the region and Greenpeace is calling for an immediate halt to fishing in areas being considered for sanctuary status. Frida Bengtsson, from Greenpeace’s Protect the Antarctic campaign, said: “If the krill industry wants to show it’s a responsible player, then it should be voluntarily getting out of any area which is being proposed as an ocean sanctuary, and should instead be backing the protection of these huge swaths of the Antarctic.” Last month a study found a combination of climate change and industrial-scale fishing is hitting the krill population, with a potentially disastrous impact on larger predators.


Photograph: Justin Hofman/Alamy Stock Photo

The study warned that the penguin population could drop by almost one-third by the end of the century due to changes in krill biomass. Krill are a key part of the delicate Antarctic food chain. They feed on marine algae and are a key source of food for whales, penguins and seals. They are also important in removing the greenhouse gas carbon dioxide from the atmosphere by eating carbon-rich food near the surface and excreting it when they sink to lower, colder water. There is a growing global demand for krill-based health products which are claimed to help with a range of ailments from heart disease to high blood pressure, strokes and depression. A recent analysis of the global krill industry predicted it was on course to grow 12% a year over the next three years. Krill populations have declined by 80% since the 1970s.

Read more …

Feb 262018
 
 February 26, 2018  Posted by at 10:58 am Finance Tagged with: , , , , , , , , , ,  


Lewis Wickes Hine Hot day, East Side, New York 1908

 

The Albatross of Debt – Part 2 (David Stockman)
Day Of Reckoning Nears with Record $650 Billion In Stock Buybacks (ZH)
It’s Dalio Versus Everyone Else as Money Flows to Europe Stocks (BBG)
A Strong Euro Is A Headache For The ECB (Mises)
1% Interest Rate Rise Would Cost Average UK Homeowner £930 a Year (G.)
Corbyn Policy Shift Draws Brexit Battle Lines (Ind.)
Erdogan Slams ‘Worldwide War Of Propaganda’ Against Turkey (K.)
Eastern Ghouta Crisis: The West’s Hypocrisy Knows No Bounds (SCF)
It Is Always, Always, ALWAYS Okay To Question Official Narratives (CJ)
The Exponent Problem Of Running Other People’s Lives (Gore)
More Than Half of World’s Ocean Surface Hit By ‘Industrial Fishing’ (CNBC)
Millennials To Be Most Overweight Generation in History (Ind.)

 

 

Some numbers in case you were still unsure.

The Albatross of Debt – Part 2 (David Stockman)

Needless to say, we have reached the mane. What drove the US economy for the past three decades was debt expansion – private and public – at rates far faster than GDP growth. But that entailed a steady ratcheting up of the national leverage ratio until we hit what amounts to the top of the tiger’s back – that is, Peak Debt at 3.5X national income. As we also showed yesterday, the fulcrum event was Nixon’s abandonment of the dollar’s anchor to a fixed weight of gold at Camp David in August 1971. That unleashed the Fed to expand it balance sheet at will, thereby injecting fiat credit into the financial system at relentlessly accelerating rates; and it also paved the way for takeover of the FOMC by Keynesian academics and apparatchiks in lieu of the conservative bankers and money men who had run the Fed prior to 1970.

At length, the Fed’s balance sheet grew by 82X over the 48 years since June 1970, erupting from $55 billion to $4.5 trillion at the recent QE3 peak. The effect was drastic and enduring financial repression that drove bond yields far below what would have prevailed on the free market based on the supply of domestic real money savings. Stated differently, as the so-called “reserve currency issuer” the Fed’s massive balance sheet eruption forced money-printing reciprocity among all the central banks of the world owing to the fear of rising exchange rates – a syndrome which afflicts politicians and policy-makers everywhere. So the convoy of modest central bank balance sheets that collectively stood at perhaps $80 billion in June 1970 totals more than $22 trillion today.

That is, herded-on by the rogue central bank unleashed at Camp David, the convoy of global central banks evolved into a gigantic yield-insensitive bond buyer. For all practical purposes, they collectively operated the monetary equivalent of roach motels: The bonds went in but never came out. This massive sequestering of real debt funded by fiat credits, which central banks conjured from thin air, had the obvious first order effect of suppressing yields well below honest market clearing levels. That’s just the law of supply and demand 101.

[..] global GDP has expanded from about $3 trillion to $80 trillion since 1970 or by 26X. By contrast, the balance sheets of central banks has exploded by around 275X. [..] In June 1970 the GDP was $1.1 trillion and it has since expanded by 18X to $19.6 trillion. By contrast, total public and private debt outstanding was $1.58 trillion and has since expanded by 42X to $67 trillion. In effect, the law of compounding eventually rules. That’s because to extend these unsustainably divergent trends for even another decade would lead to an outright absurdity. As we also pointed out in Part 1, ten years from now nominal GDP would total $35 trillion and total public and private debt would reach $150 trillion.

Read more …

This will not look benign for much longer.

Day Of Reckoning Nears with Record $650 Billion In Stock Buybacks (ZH)

When it comes to stock buybacks – an increasingly politically charged topic – 2018 has already been a historic year: as we reported last weekend the $171 billion in YTD stock buyback announcements is the most ever for this early in the year. In fact, it is already more than double the prior 10 year average of $77 billion in YTD buyback announcements. And, according to Goldman’s revised forecast of corporate cash use, the buyback tsunami is about to be truly unleashed this year. In a note released on Friday, Goldman’s chief equity strategist David Kostin revises his prior forecast for S&P 500 corporate cash spending, and now expects that in 2018 corporate cash outlays will grow by 15% to $2.5 trillion as a result of corporate tax reform and strong EPS growth, with $1.4 trillion (54% of the total) going toward growth while $1.2 trillion (46%) gets returned to shareholders.

While Goldman expects capex to grow by a modest 11% to $690BN, remaining the single largest use of cash, it will be so only by a fraction as buybacks will be breathing down CapEx’ neck, and are set to increase by a whopping 23% from $527BN in 2017 to an all time high of $650BN, an amount which would make total 2018 buybacks the highest annual S&P500 stock repurchase on record. A quick reminder: corporations – via share buybacks – have been the main buyers of shares in the U.S. since 2009. Non-financial corporates have repurchased a net US$3.3 trillion worth of US equities since 2009, according to the Federal Reserve’s flow of funds data based on calculations from CLSA’s Chris Wood. By contrast, households and institutions (insurers and pension funds) have sold a net US$672 billion and US$1.2 trillion respectively over the same period, while mutual funds and ETFs have bought a net US$1.6 trillion.

[..] Chris Cole last October perfectly encapsulated the importance of stock buybacks to perpetuate the record low vol regime observed until recently: “The later stages of the 2009–2017 bull market are a valuation illusion built on share buyback alchemy…The technique optically reduces the price-to-earnings multiple because the denominator doesn’t adjust for the reduced share count… Share buybacks are a major contributor to the low volatility regime because a large price insensitive buyer is always ready to purchase the market on weakness…Share buybacks result in a lower volatility, lower liquidity, which in turn incentivizes more share buybacks, further incentivizing passive and systematic strategies that are short volatility in all their forms. Like a snake eating its own tail, the market cannot rely on share buybacks indefinitely to nourish the illusion of growth. Rising corporate debt levels and higher interest rates are a catalyst for slowing down the $500-$800 billion in annual share buybacks artificially supporting markets and suppressing volatility.” A graphic representation of Cole’s lament:

Read more …

One-eyed leading blind?!

It’s Dalio Versus Everyone Else as Money Flows to Europe Stocks (BBG)

Billionaire Ray Dalio has $18.45 billion in bets against Europe’s biggest stocks. Most of the rest of the investing world is headed in the other direction. U.S. stocks lost $9.7 billion in investment so far this month while Eurozone shares have gained $3.2 billion, according to data compiled by Bloomberg. Peers of Dalio’s firm, Bridgewater Associates, are mostly wagering that Eurozone equities will rise. “I’m surprised. That’s a big bet. Dalio and his team are very confident,” said Rick Herman at BB&T Institutional Investment. “That’s definitely out of consensus. European stocks are cheaper, and they also have stronger earnings growth.”

Dalio has always marched to the beat of his own drummer, so his big short position, especially when other hedge funds are betting in the opposite direction, could be seen in that context. Even among those who are short, Bridgewater stands out, according to a Bloomberg survey of hedge funds. The combined value of their shorts stands at $23 billion. Dalio’s position has decreased from $22 billion on Feb. 15 but is still a whopping 43% larger than the outstanding bets by Cliff Asness’s AQR Capital Management.

Read more …

” A weak dollar while the US economy grows as it is, means an opportunity for the Federal Reserve. Will Powell use this opportunity?”

A Strong Euro Is A Headache For The ECB (Mises)

In recent weeks, the euro has been at its highest level, relative to the US dollar, that we’ve seen in the last three years. This is a movement that surprises when the European Central Bank is carrying out the most aggressive monetary expansion in the world after the Bank of Japan. A strong euro is not a problem for any European citizen. European households keep a large part of their financial wealth in deposits. Additionally, a strong euro curbs inflation in imported products, mainly energy and food, generating a significant wealth effect. If we look at the commodity index between January 6, 2017 and January 12, 2018, we can see that it has fallen by more than 12% in euros, while it is slightly up in US dollars. For the average European citizen, a stable or strong euro is a blessing, and one of the essential factors for the recovery of household disposable income.

A strong euro has not been a problem either for exports. Spain, for example, has increased by 53% the weight of exports in GDP in the last five years and Eurozone exports in 2017 marked a record, growing more than the average of global trade and with a record trade surplus, which is one of the decisive factors explaining the euro strength. But a strong euro is bad news for central planners, indebted states and obsolete or low value-added sectors that need the hidden subsidy of devaluation. A strong euro destroys the ECB expectations of inflation, the increase in estimated profits of the low productivity sectors and puts in danger the debt reduction of inefficient states, which have been unable to reduce their deficits quickly enough. The ECB´s monetary policy, which becomes an assault on the savers and efficient sectors to subsidize the inefficient and indebted, does not work in a globalized world with open economies.

And, ironically, that is good for European families, who see their wealth in deposits strengthen and stable disposable income because inflation is low. Although the ECB maintains ultra-low rates and monthly repurchases of 30,000 million euros, they are unable to devalue as they would like. The European central planner must scratch its head thinking why. The US economy accelerates its growth, inflation expectations rise, the trade deficit is at decade-lows, the Federal Reserve is raising interest rates … And the US dollar does not strengthen. The main explanation lies in the trade surplus of China and the Eurozone. Central banks should know it is difficult to have rising trade profits and weakening currencies. A weak dollar while the US economy grows as it is, means an opportunity for the Federal Reserve. It can raise rates and strengthen options ahead of a global slowdown without worrying about its currency. Will Powell use this opportunity?

Read more …

Eevryone’s favorite bubble.

1% Interest Rate Rise Would Cost Average UK Homeowner £930 a Year (G.)

A 1% rise in interest rates would add around £10bn to the UK’s mortgage bill, according to analysis from estate agent Savills. The increase would equate to adding £930 a year to the cost of servicing the average mortgage. Borrowers on variable rate deals influenced by movements in the Bank of England base rate would be the first to feel the pain, putting the annual mortgage bill up by £4.3bn immediately, Savills said. The 59% of borrowers on fixed-rate deals would feel the impact later, when their existing mortgage deals come to an end. Of the total increase, Savills calculates that buy-to-let landlords would pay an additional £2.4bn, with other home owners paying £7.8bn more.

“This would bring an end to the historically low mortgage costs that have boosted housing affordability and limit the buying power of those needing a mortgage, and underscores our forecasts for more subdued house price growth over the next five years,” said Lucian Cook, head of residential research at Savills. Savills forecasts that average UK house price growth will stand at 14% in total over the next five years. Borrowers are bracing themselves for further possible interest hikes following the increase last year from 0.25% to 0.5%. Earlier this month, the Bank of England governor, Mark Carney, readied borrowers for further and faster interest rate hikes, although he also stressed that rises would be limited and gradual.

Read more …

“For the many, not the few” already sounds old and stale. Be careful with that.

Corbyn Policy Shift Draws Brexit Battle Lines (Ind.)

Jeremy Corbyn will today create a clear Brexit dividing line between Labour and the Tories in a keynote speech which will see him finally commit to keep the UK in a European customs union. The Labour leader will argue the move would enable his party to secure “full tariff-free access” to the single market but without committing to all of its rules, allowing him to negotiate exemptions on freedom of movement and workers’ rights. The move ends months of speculation about Mr Corbyn’s stance on the issue, which goes to the heart of the debate about Britain’s future. It also simultaneously heaps pressure on Theresa May as pro-EU Tory rebels are poised to join Labour and force her to keep the UK in the customs union.

The Prime Minister is scrambling to agree Britain’s approach to the future relationship with the EU by Friday, as Brexiteers also threaten her leadership from the right, if she fails to seek a deal that allows the UK to agree trade deals – something staying in the customs union would preclude. In a much-anticipated speech in Coventry, Mr Corbyn will say: “Britain will need a bespoke relationship of its own. Labour would negotiate a new and strong relationship with the single market that includes full tariff-free access and a floor under existing rights, standards and protections. “That new relationship would need to ensure we can deliver our ambitious economic programme, take the essential steps to upgrade and transform our economy, and build an economy for the 21st century that works for the many, not the few.”

Read more …

Dressing up one’s propaganda as a war against propaganda.

Erdogan Slams ‘Worldwide War Of Propaganda’ Against Turkey (K.)

Turkish President Recep Tayyip Erdogan has lashed at what he claims is a “worldwide war of propaganda” against his country. “The launching of a worldwide war of propaganda based on lies, slander and distortion, by those who cannot deal with Turkey on the ground will not work,” Erdogan was quoted by Anadolu agency as saying during a meeting of his ruling Justice and Development Party (AKP) in southern Turkey on Saturday. “Those who see us as yesterday’s Turkey and treat us in this manner have begun to gradually realize the truth,” Erdogan said, according to the report.

Read more …

We’re back to Putin kills babies.

Eastern Ghouta Crisis: The West’s Hypocrisy Knows No Bounds (SCF)

As usual, the West has demonstrated its ability to fire off a quick response when it comes to slamming Russia for something it has not done. This time it’s about Eastern Ghouta, a Damascus suburb under terrorist control. The accusation? Russia and its ally Syria are guilty of killing innocent civilians, thanks to their “devastating” attacks and “siege-and-starve tactics.” It’s the same old story – no actions against terrorists are permissible because of the risk of collateral damage. The Western media have jumped on the anti-Russia bandwagon as readily as if they were orchestra members carefully following the tempo of their conductor’s baton. US Ambassador to the UN Nikki Haley wasted no time chiming in. One has to do some digging into the problem to see what’s really happening in Eastern Ghouta.

It was reported on Feb. 21 that talks to end the hostilities had broken down because the terrorists had refused to lay down their arms. The anti-government groups, including the notorious Al-Nusra (Hayat Tahrir al-Sham), have prevented civilians from leaving this dangerous zone. They are obstructing the humanitarian operations of international aid agencies, such as the Red Cross and World Food Program. The UN has repeatedly expressed its concern over the situation in the region, urging that humanitarian access to the area be safeguarded.

The presence of armed jihadists in Eastern Ghouta, which is at the root of the problem, is never mentioned in Western press reports. The attacks on Russia’s embassy in Damascus, carried out by the same “guys” who are causing the suffering of civilians in Ghouta, receive little or no media attention. Russian aircraft did not conduct air strikes on this suburb. The Western accusations are groundlessand offer no details. The Russian military has been involved in humanitarian efforts to help the refugees fleeing this dangerous area. It was Moscow alone who called for the urgent UN Security Council meeting to discuss the situation.

The Syrian authorities have never made a secret of their intention to rid the area of jihadists. A ground offensive might be coming soon, but would that be a bad thing? Isn’t it the duty of any government to provide security to its citizens by fighting the terrorists who are holding civilians hostage? Terrorists from Eastern Ghouta regularly shell Damascus, killing civilians. The sooner the suburb is liberated, the better for everyone. If the anti-Assad fighters were real patriots, they would have left the populated areas a long time ago. Instead, they use civilians as human shields. Aren’t they the ones to blame for this dire situation? But no, the Western media call them “rebels,” not “gangs of ruthless murderers.” The terrorists in Ghouta won’t surrender because they are pinning their hopes on the West to help them out.

Read more …

It’s a duty.

It Is Always, Always, ALWAYS Okay To Question Official Narratives (CJ)

On the fifth of April, 2017, CNN staged a fake, scripted interview featuring a seven year-old Syrian girl sounding out pro-regime change talking points syllable-by-syllable using concepts that she could not possibly understand. CNN host Alisyn Camerota was asking the child questions throughout the performance, which means that Camerota necessarily had the other half of the script. CNN has never offered an explanation for this event, and nobody has ever been able to provide me with a plausible defense of it. This is not some tinfoil hat fantasy I made up in my imagination. This happened. CNN knowingly staged a fake, scripted interview and deceitfully passed it off to its audience as a real one, exploiting a small child for interventionist propaganda in an inexcusably fraudulent way.

And yet CNN has the gall to get huffy and indignant when it’s suggested that they tried to use scripted questions in a town hall about the Florida school shooting. I rarely pay much attention to the false flag theories which emerge after every hotly publicized mass shooting in America. They’re very convoluted and consist mostly of pointing out inconsistencies and plot holes in the official story being advanced, without offering any clear substantial narrative about what did happen and why. It’s not that I doubt for one second that the US power establishment would butcher American citizens if it significantly benefitted them, I just see no clearly laid-out evidence that that’s what happened in these cases. That said, the fact that the same mass media machine which brazenly staged a war psyop using a seven year-old girl is loudly condemning people who question the official narrative about the Florida school shooting is obscene.

[..] The mass media created conspiracy theories. By lying to the public day after day after day in the most grotesque and brazen ways imaginable, they created an environment where people will necessarily question the ways in which reality differs from what they’ve been told. How could they not? And yet these depraved manipulators still dedicate massive amounts of resources toward putting immense public pressure on anyone who still has unanswered questions, because Seth Rich’s family wants you to shut up and some guy shot a hole in a pizza shop floor.

Read more …

Math for sociopaths.

The Exponent Problem Of Running Other People’s Lives (Gore)

Most people find managing their own affairs sufficiently challenging. Earning a living, establishing a family, rearing children, saving for college and retirement, and dealing with illness and aging fill the days and leave little time, attention, or energy to manage someone else’s affairs. A hypothesis: the effort required to run other people’s lives is an exponential function. If X is the sum total of everything required to run your life; running two lives is X squared; three lives is X cubed, and so on. Call it the exponent problem. For partial verification, try running someone else’s life for a day or two. See how it works out for you and the other person. Why do governments fail? Government is someone imposing rules on someone else, and backing them up with repression, fraud, and violence when necessary.

The governed always outnumber those governing, which means the latter face the exponent problem. In the US, there are around 22 million employed by the government, and let’s add in another million who actively influence it. The US population is around 323 million, so there are 23 million rulers to 300 million ruled, or about 13 ruled per ruler. How fitting, like the 13 original colonies! Whatever amount X of time, energy, money, attention, and other resources the rulers expend on their own lives, they must expend that X to the thirteenth power to “govern” the ruled. If X could actually be quantified and it was only 2, it would still take 8192 times the effort to rule the US as it does for the rulers to govern their own lives. Those are just illustrative numbers, but you get the picture. No wonder rulers use repression, fraud, and violence.

They’re overwhelmed by the exponent problem. On its best days governance is a comic proposition, on its worst, a tragic and terrible one. A farce, but in its own way tragic and terrible, is preceding the ultimately tragic and terrible outcome of the US government’s efforts to govern every aspect of its constituents’ lives and exercise power over what it considers its global domain.

Read more …

Let theme at jellyfish.

More Than Half of World’s Ocean Surface Hit By ‘Industrial Fishing’ (CNBC)

Commercial fishing covers more than 55% of the ocean’s surface, a new study has revealed in a potentially worrying sign about the depletion of marine resources. Fish from the wild do not currently contribute a significant portion of human caloric consumption, but “the footprint of industrial fishing in the ocean is over four times larger than the land area occupied by agriculture,” researchers said in a paper published by the journal Science on Thursday. And the bulk of activity is dominated by just five countries: China, Spain, Taiwan, Japan and South Korea. Publishing a comprehensive map of global fisheries for the first time using satellite technology and big data, researchers discovered that fishing patterns were strongly influenced by cultural and political events rather than weather.

“The Christmas holiday and fishing moratorium in China have a bigger effect on the global temporal footprint of fishing than any seasonal weather changes.” Every year, the world’s second-largest economy imposes a nation-wide fishing ban that usually lasts for three months. Beijing will institute the rule in the Yellow River from April 1 to June 30 this year, Xinhua reported this week. Other water bodies, such as the Yangtze River and Pearl River, could also see annual bans.

Read more …

Causing the biggest leap in demand for health care in history. A system that‘s already shaking on its foundations.

Millennials To Be Most Overweight Generation in History (Ind.)

Middle-aged millennials are set to be the most overweight generation since records began, with experts warning they are unwittingly and significantly increasing their risk of cancer. Analysis by Cancer Research UK (CRUK) shows that on current trends 70% of millennials, those born between the early 1980s to mid-1990s, will be overweight or obese by the age 35 to 45. However, despite being linked to 800,000 cancer cases a year, the vast majority of people are unaware of the additional risk obesity brings. Health campaigners said the figures were “horrifying” and a consequence of the Government only paying “lip service” to tackle the obesity crisis, while slashing health budgets.

The seven out of 10 figure for millennials compared to around 50% of the “baby boomer” generation, born between 1945 and 1955, who were overweight or obese in their thirties and forties. “This means millennials are the most overweight generation since current records began”, said CRUK after it extrapolated current obesity trends to look at the state of the nation’s weight in 2028. The UK is already the most overweight nation in Western Europe, with obesity rates rising even faster than in the US. However, just 15% of people in the UK are aware that being obese increases your risks of developing bowel, kidney and breast cancers, and at least 10 other types.

Read more …

Jan 212018
 
 January 21, 2018  Posted by at 11:09 am Finance Tagged with: , , , , , , , , , , ,  


Francisco Goya The Dog 1819-23

 

US Senate In Weekend Bid To End Shutdown Impasse (BBC)
Trump’s Trip To Davos Is Up In The Air Because Of The Shutdown (CNBC)
Republicans Have Four Easy Ways to #ReleaseTheMemo – and the Evidence (GG)
China Orders Banks To Stop Financing Cryptocurrencies (SCMP)
China Urges U.S. to Abandon ‘Cold War’ Mindset (BBG)
Britain’s Tired Old Economy Isn’t Strong Enough For Brexit (G.)
Macron: Bespoke Brexit Deal Possible If UK Accepts ‘Preconditions’ (G.)
Athens Hopeful For Eurogroup Decisions Despite Problems (K.)
In New Zealand, 100% Pure Is 100% Propaganda (Stuff)
Ain’t No Sunshine: Winter Is One Of Darkest Ever For Parts Of Europe (G.)
Turkey Threatens Refugee Deal With EU (K.)
15 Syrian Refugees Found Frozen To Death On Lebanon Border (BBC)

 

 

Let it go down; why maintain the illusion that the system functions?

US Senate In Weekend Bid To End Shutdown Impasse (BBC)

The US Senate is due back in session to try to end a budget impasse before the start of the working week when the shutdown of many federal services will be felt around the country. Hundreds of thousands of federal staff face the prospect of unpaid leave. On Saturday, recriminations flew around over the Senate’s failure to pass a new budget and prevent the shutdown. A bill to fund the federal government for the coming weeks did not receive the required 60 votes by Friday. The Republican leader of the US Senate, Mitch McConnell, has said there will be a vote at 01:00 in the early hours of Monday (06:00 GMT) on a bill to fund the government until 8 February. The last government shutdown was in 2013, and lasted for 16 days.

This is the first time a government shutdown has happened while one party, the Republicans, controls both Congress and the White House. The vote on Friday was 50-49, falling far short of the 60 needed to advance the bill. With a 51-seat majority in the Senate, the Republicans do not have enough votes to pass the bill without some support from the Democrats. They want funding for border security – including the border wall – and immigration reforms, as well as increased military spending. The Democrats have demanded protection from deportation of more than 700,000 undocumented immigrants who entered the US as children.

Read more …

No gloating.

Trump’s Trip To Davos Is Up In The Air Because Of The Shutdown (CNBC)

Donald Trump was set to be the first U.S. president to attend the World Economic Forum in Davos, Switzerland, in nearly two decades, but the government shutdown might have scrambled those plans. White House budget chief Mick Mulvaney said Saturday that Trump’s plans to travel to Davos next week are up in the air while Congress scrambles to strike a deal to fund the federal government. “We’re taking Davos, from the president’s perspective and the Cabinet’s perspective, on a day-by-day basis,” Mulvaney told reporters during an impromptu briefing. The government shut down at midnight Friday, after congressional negotiators failed to pass a budget.

Earlier in the day, Trump cancelled a planned trip to Florida, where he was scheduled to host a party at his private Mar-a-Lago club to mark the one year anniversary of his inauguration. Tickets for the Mar-a-Lago party begin at $100,000 per couple, and proceeds will benefit the Trump reelection campaign and the Republican National Committee. On Saturday, RNC staffers were busy setting up TV screens in the private club, so Trump could address the guests via satellite, according to CNN. The budget impasse showed no signs of letting up on Saturday, as both Democrats and Republicans dug their heels in, and each party blamed the other. The president is scheduled to depart for Switzerland on Wednesday, along with a delegation of more than a dozen Cabinet members, including Treasury Secretary Steven Mnuchin, and top White House aides.

Read more …

They have to release it, no choice.

Republicans Have Four Easy Ways to #ReleaseTheMemo – and the Evidence (GG)

One of the gravest and most damaging abuses of state power is to misuse surveillance authorities for political purposes. For that reason, The Intercept, from its inception, has focused extensively on these issues. We therefore regard as inherently serious strident warnings from public officials alleging that the FBI and Department of Justice have abused their spying power for political purposes. Social media last night and today have been flooded with inflammatory and quite dramatic claims now being made by congressional Republicans about a four-page memo alleging abuses of Foreign Intelligence Surveillance Act spying processes during the 2016 election.

This memo, which remains secret, was reportedly written under the direction of the chair of the House Permanent Select Committee on Intelligence, GOP Rep. Devin Nunes, and has been read by dozens of members of Congress after the committee voted to make the memo available to all members of the House of Representatives to examine in a room specially designated for reviewing classified material. The rhetoric issuing from GOP members who read the memo is notably extreme. North Carolina Republican Rep. Mark Meadows, chair of the House Freedom Caucus, called the memo “troubling” and “shocking” and said, “Part of me wishes that I didn’t read it because I don’t want to believe that those kinds of things could be happening in this country that I call home and love so much.”

GOP Rep. Scott Perry of Pennsylvania stated: “You think about, ‘Is this happening in America or is this the KGB?’ That’s how alarming it is.” This has led to a ferocious outcry on the right to “release the memo” – and presumably thereby prove that the Obama administration conducted unlawful surveillance on the Trump campaign and transition. On Thursday night, Fox News host and stalwart Trump ally Sean Hannity claimed that the memo described “the systematic abuse of power, the weaponizing of those powerful tools of intelligence and the shredding of our Fourth Amendment constitutional rights.” Given the significance of this issue, it is absolutely true that the memo should be declassified and released to the public — and not just the memo itself.

The House Intelligence Committee generally and Nunes specifically have a history of making unreliable and untrue claims (its report about Edward Snowden was full of falsehoods, and prior claims from Nunes about “unmasking” have been discredited). Thus, mere assertions from Nunes — or anyone else — are largely worthless; Republicans should provide American citizens not merely with the memo they claim reveals pervasive criminality and abuse of power, but also with all of the evidence underlying its conclusions.

Read more …

Don’t worry, the shadow banks will.

China Orders Banks To Stop Financing Cryptocurrencies (SCMP)

The People’s Bank of China has ordered financial institutions to stop providing banking or funding to any activity related to cryptocurrencies, further tightening the noose since its shutdown of crypto exchanges last September sent digital currency enthusiasts fleeing overseas. “Every bank and branch must carry out self-inspection and rectification, starting from today,” according to a document issued by the central bank on Wednesday. “Service for cryptocurrency trading is strictly prohibited. Effective measures should be adopted to prevent payment channels from being used for cryptocurrency settlement.” The Chinese-language document, as seen by the South China Morning Post, was distributed as an internal document among banks, and not published on the central bank’s official website.

“Banks should enhance their daily transaction monitoring, and the timely shut down of the payment channel once they discover any suspected trading of cryptocurrencies,” the document said, adding that the deadline for disclosing the measures is on January 20. The emphasis was on handling any capital settlement to avoid any financial losses by cryptocurrency investors from escalating into public protests – known as “group events” in China – and preserve social stability, the central bank said. [..] Chinese cryptocurrency traders, who once dominated 90 per cent of the world’s trading volume of bitcoin, the most popular and oldest form of cryptocurrency, have moved to the underground market, or overseas to Japan. Bitcoin is considered legal tender in Japan.

“Most of the trading is taking place via US dollar now, as some big accounts active in digital currency trading are already on China’s official watch list and payment channel already blocked,” said Zhao Dong, an individual bitcoin investor who spends most of his time in Japan now. “This move by the PBOC is further pushing capital and innovation out of China.” Still, a person no less than Zhou Xiaochuan, the longest-serving governor in the Chinese central bank, has himself announced that the People’s Bank of China itself is studying the feasibility of developing its own digital currency.

Read more …

As does Russia.

China Urges U.S. to Abandon ‘Cold War’ Mindset (BBG)

China’s National Defense Ministry said the U.S. should abandon a “Cold War” mindset and view Chinese national security and military efforts “rationally and objectively.” The instigators of militarization of the South China Sea are “other countries” that don’t seem to want to see peace in the region and are using the banner of “navigational freedom” to undertake military activities in a tyrannical manner, ministry spokesman Ren Guoqiang said in a statement released late Saturday. The statement was in response to a U.S. Defense Department strategy report, released last week, that singled out China’s military modernization and expansion in the South China Sea as key threats to U.S. power.

China has undertaken massive land reclamation in the contested waterway that hosts $5 trillion in trade a year, to strengthen its claim to more than 80 percent of the area. That has strained ties with other claimant states, such as Vietnam and the Philippines, as well as the U.S. The National Defence ministry’s statement on Saturday came shortly after China’s Foreign Ministry vowed to take “necessary measures” to safeguard its sovereignty after a U.S. warship entered waters surrounding the Huangyan Island in the South China Sea. China’s activities in the South China Sea is “a matter within China’s sovereign rights,” Ren said, adding that the country is committed to a path of peaceful development and a harmonious world order.

Read more …

A good point not particularly well made.

Britain’s Tired Old Economy Isn’t Strong Enough For Brexit (G.)

Brexit, at its heart, is a recognition that Britain has become steadily weaker since it spent much of its empire wealth fighting two world wars – too feeble in the years before the 2016 referendum to sustain an exchange rate of $1.60 and €1.40, just as it was too poor to cope with $4 to the pound in the 1950s and $2 to the pound in 1992. Manufacturers were unable to make things cheaply, reliably or efficiently enough against the headwind of a high-value currency, forcing many to give up. An economy that boasted 20% of its income coming from manufacturing in the 1980s found it was the source of barely 10% at the beginning of this decade.

Surges in GDP growth in the 70 years since the war can be attributed (and this short list makes the point crudely) to periods when there were cheap raw materials and energy costs; or a growing population; or foreign ownership and management of key industries; or the offloading of vast amounts of state and mutually owned assets; or cheap borrowing. Without these in operation to improve the UK’s performance, a lower exchange rate became inevitable. Some Brexit campaigners made a cheaper currency their explicit aim, arguing that while Britain’s wealth and standing in the world would be diminished in the short term, the breathing space given to manufacturers would allow them to sell abroad at cheaper prices, then use the funds to invest and gain the efficiencies needed to cope with a return to a higher exchange rate sometime in the next decade.

There is a good deal of logic to the argument, but it rests, like so many revolutionary aims, on the many and competing forces in the economy doing exactly what its proponents want them to. For instance, manufacturers, with a few honourable exceptions, have refused to invest more than the bare minimum for decades, even when the exchange rate has helped them. There are windfall profits to be made when currencies fall: but these windfalls have been trousered by shareholders, not invested.

Read more …

Little emperor.

Macron: Bespoke Brexit Deal Possible If UK Accepts ‘Preconditions’ (G.)

Emmanuel Macron has said it would be possible for Britain to secure a bespoke trade deal but only if the UK accepts certain “preconditions”. The French president said that while a special solution could be secured, full access to the single market without accepting its rules was “not feasible”. The comments were made during an interview recorded for BBC One’s The Andrew Marr Show on Sunday. Macron has been in the UK for his first visit since taking office. On Thursday, at the end of a joint press conference with Theresa May at Sandhurst military training college, he rejected the idea of a tailored Brexit deal for Britain’s financial services sector. Macron said full access to EU markets would not be possible unless the UK paid into the EU budget and accepted all its rules.

In the interview with Marr, he said there was “a competition between different countries” to attract financial services companies in the future and that France wanted “to attract the maximum activity”. The Brexit secretary, David Davis, has said he is seeking a “Canada plus plus plus” arrangement, based on the EU-Canada trade treaty, but with additional access for services. However, EU negotiators have stressed that Britain would not be allowed to “cherry-pick” sectors. Pressed on whether there would be a bespoke special solution for the UK, Macron said: “Sure, but … this special way should be consistent with the preservation of the single market and our collective interests. “And you should understand that you cannot, by definition, have the full access to the single market if you don’t tick the box.” He added: “So it’s something perhaps between this full access and a trade agreement.”

Read more …

It’s starting to feel like Stockholm Syndrome.

Athens Hopeful For Eurogroup Decisions Despite Problems (K.)

Eurozone finance ministers are to meet in Brussels on Monday to assess Greece’s progress in enforcing economic reforms, decide whether to disburse 6.7 billion euros in bailout loans and, Athens hopes, signal talks on debt relief. It was unclear if the loan tranche would be disbursed in its entirety, as some prior actions are pending. However, Greek officials sounded upbeat following a decision late on Friday by Standard & Poor’s to raise Greece’s sovereign credit rating from B- to B with a positive outlook. “Greece’s growth and fiscal outlooks have improved alongside a labor market recovery and amid a period of relative policy certainty,” S&P said.

“These positive developments boost the sense that the trust of the markets and investors in the Greek economy is being restored with steady steps,” the Finance Ministry said on Saturday. “With the conclusion of the program in August 2018 and the securing of steady access to the markets, the Greek economy is definitely moving away from a long period of crisis.” Despite the upbeat rhetoric, there are divisions within SYRIZA over government policies, particularly in the radical Group of 53 faction. In comments to SYRIZA’s central committee on Saturday, Finance Minister Euclid Tsakalotos conceded that there are “many short-term problems” and underlined two major risks. “One is the banks and the other is the IMF,” he said.

Read more …

Nice. Kiwis believe in fairy tales.

In New Zealand, 100% Pure Is 100% Propaganda (Stuff)

Ask Tourism New Zealand what 100% Pure means and they’ll tell you: it’s not a ‘clean, green’ campaign, but a campaign that delivers a “100% Pure New Zealand experience”. What it is is 100% pure advertising, and a slogan fit to replace the fertiliser used in the country’s intensive farming. But while Kiwis do seem to be realising there’s something murky about our clean-green image, there is one area we are still fooling ourselves about – the state of our native creatures. Stuff has just wrapped up its Forgotten Species series, a five-part series looking at a handful of the estimated 3700 native species which are either approaching extinction or at risk. Despite having one of the highest proportions of threatened or endangered species of anywhere on the planet, 70% of the public feel the state of our country’s natives is adequate or doing well, according to a recent Lincoln University study.

Ask study co-author Ross Cullen and he will tell you – 70% of the public is “totally wrong”. All countries advertise, and everyone accepts it with a pinch of salt. If we didn’t we would all be jetting off to England expecting a village in the Cotswolds and end up at a sleazy pub in Plumstead, east London. Advertising is advertising, and good advertising brings in tourism money. However, when the public believes its own advertising, it’s no longer advertising, it’s propaganda –and that’s a problem. It’s a problem because if the populace think something’s going well, they ignore it, the political hot-potato cools, and the decline continues. Case in point – the National Government’s Minister for Conservation, Maggie Barry, paraded the new Threatened Species Strategy in front of voters just as the 2017 general election was heating up.

It promised to increase the number of at-risk species directly managed by 40%. On the face of it, this seems great, but when the Budget was released a couple of weeks later, almost all of DOC’s extra funding was ring-fenced for upgrading tourism infrastructure and developing new Great Walks. It was a great ad delivered by a great ex-garden show host. Kiwis might have kicked up a fuss – if the majority didn’t think we were doing a bang up job on protecting native species already. I remember a telling moment after ex-Parliamentary Commissioner for the Environment Jan Wright’s launched her report finding 80% of native birds were threatened. I was present to hear why Tourism Industry Aotearoa chief executive Chris Roberts didn’t fancy this was a problem. “The people come here for our scenery, not our wildlife,” he said. Roberts didn’t disagree with any of the report’s findings, he just thought a visitor levy would do more harm to the country than the rapid die-off of our native birds.

Read more …

Depression zone. I went from Athens to Amsterdam 5 weeks ago, lost 2 hours of daylight to begin with, and been dead tired ever since. Vitamin D doesn’t do it either.

Ain’t No Sunshine: Winter Is One Of Darkest Ever For Parts Of Europe (G.)

Sunshine is in short supply across a swathe of north-west Europe, shrouded in heavy cloud from a seemingly never-ending series of low pressure systems since late November and suffering one of its darkest winters since records began. If you live in Brussels, 10 hours and 31 minutes was your lot for the entire month of December. The all but benighted inhabitants of Lille in France got just two hours, 42 minutes through the first half of January. “Sound the alarm and announce the disappearance,” read a despairing headline in photon-deprived northern France’s regional paper, La Voix du Nord. “A star has been kidnapped. We still have no sign of life from the sun.”

Belgium’s Royal Meteorological Institute has declared December 2017 “the second darkest month since 1887”, when it began measuring, after the 10.5 hours of sun recorded at its Uccle weather station last month were beaten only by a bare 9.3 hours in 1934. France’s northern Hauts-de-France region did better with 26 hours of sunshine in December, but that was against a norm of 48. But Météo France described the paltry 2.7 hours of sun recorded from 1 to 13 January in Lille, the region’s biggest city, as “exceptional”. The January average stands at 61.4 hours, according to the agency – meaning Lille and its unfortunate residents were deprived of perhaps 30 hours’ worth of rays in the first part of the month.

[..] Even southern French sun-traps such as Bordeaux and Marseille fell a very long way short of their usual ray quota in the first half of the month, basking in just 10.3 and 26.9 hours respectively against monthly averages of 96 and 92.5. Health experts say a shortage of sunshine can lead to seasonal depression, whose symptoms include a lack of energy, a desire to sleep and a perceived need to consume greater quantities of sugar and fat. “Exposure to morning light inhibits the secretion of melatonin that promotes sleep and favours the production of hormones that will stimulate the body,” Matthieu Hein, a psychiatrist at the Erasmus Hospital in Brussels, said. In the absence of light, we are “rather slow, tired, which is characteristic of SAD, or seasonal affective disorder”. Florent Durand, who runs a massage studio in Lille, told France 3 TV that his €39 light therapy sessions were booked out.

Read more …

As Turkey bombs US supported Kurds, Erdogan feels like a god.

Turkey Threatens Refugee Deal With EU (K.)

Turkey’s agreement with the European Union to curb human trafficking across the Aegean appears to be in jeopardy again after a top Turkish official warned that a current impasse with the EU gives Ankara no reason to honor the deal. A collapse of the deal would put more pressure on Greek islands where thousands of migrants are cooped up in overcrowded reception centers. The comments on Friday by Turkey’s minister for EU affairs, Omer Celik, essentially rejected a proposal by French President Emmanuel Macron for a partnership rather than full EU membership for Turkey. “A privileged partnership or similar approaches, we don’t take any of these seriously. Turkey cannot be offered such a thing,” Celik told Reuters.

Celik said the EU was not fully honoring its part of the migration deal, noting that financial aid was “not working well” and that no new chapters have been opened in Turkey’s EU accession bid. “Technically there’s no reason for Turkey to maintain this deal,” he said. The minister’s words echoed those of Turkish President Recep Tayyip Erdogan, who, during a landmark visit to Greece in December, hit out at the EU for giving Turkey just a portion of the aid it had pledged as part of the 2016 migrant deal. During Erdogan’s visit, Prime Minister Alexis Tsipras proposed that Turkey take back migrants from facilities on the Greek mainland to free up space for migrants from overcrowded camps on the islands. Erdogan did not publicly respond to the suggestion.

After Celik’s comments on Friday, a spokesman for the Greek Migration Ministry said the government’s position, that all sides must honor the Turkey-EU deal, remained “fixed and firm.” Migration Minister Yiannis Mouzalas visited Lesvos on Friday, together with Valentin Radev, the interior minister of Bulgaria, which holds the EU’s rotating presidency. Mouzalas reassured local residents, who had gathered at the Moria facility, that measures would be taken to ensure that migrants alleged to have been involved in thefts or other offenses will no longer be allowed to leave the premises. Lesvos Mayor Spyros Galinos said the minister was not doing enough to adequately inform residents and was shifting the blame for the situation on the islands on to local authorities.

Read more …

New year, same old lack of humanity.

15 Syrian Refugees Found Frozen To Death On Lebanon Border (BBC)

Fifteen Syrian refugees – some of them children – have been found frozen to death while trying to cross the mountainous border into Lebanon. Thirteen bodies were found on Friday and two more were discovered on Saturday after the area was hit by a fierce snowstorm. Lebanese civil defence officials found the bodies after being told a group of refugees were in trouble near Masnaa. Local reports say the group had been abandoned by smugglers. Two smugglers have reportedly been arrested.

Several refugees were rescued, including a young boy who was found wandering by himself. The group were taking the same route hundreds of thousands of Syrians have taken before them trying to flee the conflict at home. Lebanon, with a population of four million, has taken in nearly one million Syrians since the war began in 2011. The Lebanese authorities brought in new restrictions in 2015 to try to restrict the number of refugees arriving in the country.

Read more …

Jul 102017
 
 July 10, 2017  Posted by at 9:15 am Finance Tagged with: , , , , , , , ,  


Fred Lyon Anne Lyon getting into her Riley on Nob Hill, San Francisco 1950s

 

Propaganda-ville (Robert Parry)
Trump Cannot Improve Relations With Russia (PCR)
Comey’s Leaked Trump Memos Contained Classified Information (ZH)
Tales from the FOMC Underground (PT)
Stock Market Tsunami Siren Goes Off (WS)
America Is Struggling With Economic Rot (BBG)
May Appeals To Corbyn For Help In Coming Up With New Ideas (Ind.)
US-Russian Ceasefire Deal Holding In Southwest Syria (R.)
The Lynx Could Return To UK Within Months After 1,300-Year Absence (Ind.)

 

 

When slow news becomes no news. I must have seen 100 different versions of the non-story of one of Trump’s not-so-bright sons meeting with a Russian lady, a story that’s supposed to prove what nothing else has yet proven, not even Bob Mueller, Russian meddling. Yeah, Russia spies, and it hacks, and so does everyone else. But that’s clearly not news, and you can’t make it so be endlessly repeating it. That Comey leaked classified information is apparently much less newsworthy. Only, it is not. It just serves the machine to a lesser degree. Be careful, America, or you’ll have no news sources left soon. Not a great prospect.

Propaganda-ville (Robert Parry)

As much as the U.S. mainstream media wants people to believe that it is the Guardian of Truth, it is actually lost in a wilderness of propaganda and falsehoods, a dangerous land of delusion that is putting the future of humankind at risk as tension escalate with nuclear-armed Russia. This media problem has grown over recent decades as lucrative careerism has replaced responsible professionalism. Pack journalism has always been a threat to quality reporting but now it has evolved into a self-sustaining media lifestyle in which the old motto, “there’s safety in numbers,” is borne out by the fact that being horrendously wrong, such as on Iraq’s WMD, leads to almost no accountability because so many important colleagues were wrong as well.

Similarly, there has been no accountability after many mainstream journalists and commentators falsely stated as flat-fact that “all 17 U.S. intelligence agencies” concurred that Russia did “meddle” in last November’s U.S. election. For months, this claim has been the go-to put-down whenever anyone questions the groupthink of Russian venality perverting American democracy. Even the esteemed “Politifact” deemed the assertion “true.” But it was never true. It was at best a needled distortion of a claim by President Obama’s Director of National Intelligence James Clapper when he issued a statement last Oct. 7 alleging Russian meddling. Because Clapper was the chief of the U.S. Intelligence Community, his opinion morphed into a claim that it represented the consensus of all 17 intelligence agencies, a dishonest twist that Democratic presidential candidate Hillary Clinton began touting.

However, for people who understand how the U.S. Intelligence Community works, the claim of a 17-agencies consensus has a specific meaning, some form of a National Intelligence Estimate (or NIE) that seeks out judgments and dissents from the various agencies. But there was no NIE regarding alleged Russian meddling and there apparently wasn’t even a formal assessment from a subset of the agencies at the time of Clapper’s statement. President Obama did not order a publishable assessment until December – after the election – and it was not completed until Jan. 6, when a report from Clapper’s office presented the opinions of analysts from the Central Intelligence Agency, Federal Bureau of Investigation and the National Security Agency – three agencies (or four if you count the DNI’s office), not 17.

The report also contained no hard evidence of a Russian “hack” and amounted to a one-sided circumstantial case at best. However, by then, the U.S. mainstream media had embraced the “all-17-intelligence-agencies” refrain and anyone who disagreed, including President Trump, was treated as delusional. The argument went: “How can anyone question what all 17 intelligence agencies have confirmed as true?” It wasn’t until May 8 when then-former DNI Clapper belatedly set the record straight in sworn congressional testimony in which he explained that there were only three “contributing agencies” from which analysts were “hand-picked.”

Read more …

Paul Craig Roberts lays it on. A bit much if you ask me, but then so is everything else.

Trump Cannot Improve Relations With Russia (PCR)

On the same day that President Donald Trump said “it is time to move forward in working constructively with Russia,” and the day after he said “I had a tremendous meeting yesterday with President Putin,” the ignorant, stupid, Nikki Haley, who Trump appointed as US UN Ambassador, publicly contracted her president, forcefully stating: “we can’t trust Russia and we won’t ever trust Russia.” The ignorant stupid Haley is still in office, a perfect demonstration of Trump’s powerlessness. The ignorant stupid Haley has gone far beyond Obama’s crazed UN Ambassador, neocon Smantha Power in doing everything in her power to ruin the prospect of normal relations between the two major nuclear powers. Why does Nikki Haley work in favor of a confrontation between nuclear powers that would destroy all life on earth?

What is wrong with Nikki Haley? Is she demented? Has she lost her mind, assuming she ever had one? How can President Trump normalize relations with Russia when every one of his appointees wants to worsen the relations to the point of nuclear war? How is President Trump going to improve relations with Russia when President Trump stands powerless in face of his dressing down by his UN Ambassador? Clearly, Trump is powerless, a mere cipher. Joining Nikki Haley was Trump’s Secretary of State, Rex Tillerson. Tillerson, allegedly a friend of Russia, is also working overtime to worsen relations between the two nuclear powers by publicly contradicting the President of the United States, thereby making it clear that Trump is barely even a cipher.

Tillerson, a disgrace, said that Putin’s refusal to admit that Putin elected Trump by interferring in the US election “stands as an obstacle to our ability to improve the relationship between the US and Russia and it needs to be addressed in terms of how we assure the American people that interference into our eletions will not occur by Russia or anyone else.” Trump’s incompetence is illustrated by his appointments. There is no one in “his” government that supports him. Everyone of them works to undermine him. And he sits there and Twitters. So, what is President Putin’s belief that an understanding can now be worked out with Washington worth? Not a plugged nickel. Trump has zero authority over “his” government. He can be contradicted at will by his own appointees. The President of the United States is a joke.

You can find him on Twitter, but nowhere else, not in the Oval Office making foreign or military policy. The president Twitters and thinks that that is policy. The Trump administration was destroyed when the weak Donald Trump allowed the neoconservatives to remove his National Security Advisor, General Flynn. Trump has never recovered. “His” administration is staffed with violent Russophobes. Wars can be the only outcome. We know two things about the alleged Russian inteferrance in the Trump/Hillary presidential election. One is that John Brennan, Obama’s CIA director, and Comey, Obama’s FBI director, implied repeatedly that Trump was elected by Russian interference in the election, but neither the CIA nor the FBI have provided any evidence whatsoever that any such interference occurred. Indeed, months into the case, the special prosecutor, the former FBI director, can produce no evidence.

The whole thing is a sham, but it is ongoing. There will be no end to it as it is designed to undermind President Trump with the people who elected him. The message is: “Trump is not for America. Trump is for Russia.”

Read more …

Is Muelller going to investigate Comey soon?

Comey’s Leaked Trump Memos Contained Classified Information (ZH)

Comey’s troubles started when he testified under oath last month that he considered the memos he prepared to be personal documents and that he shared at least one of them with a Columbia University lawyer friend. As Comey later disclosed, he asked that lawyer to leak information from one memo to the news media in hopes of increasing pressure to get a special prosecutor named in the Russia case after Comey was fired as FBI director. The Hill recounts that particular exchange with Senator Roy Blunt: “So you didn’t consider your memo or your sense of that conversation to be a government document?,” Sen. Roy Blunt (R-Mo.) asked Comey on June 8. “You considered it to be, somehow, your own personal document that you could share to the media as you wanted through a friend?”

“Correct,” Comey answered. “I understood this to be my recollection recorded of my conversation with the president. As a private citizen, I thought it important to get it out.” Comey insisted in his testimony he believed his personal memos were unclassified, though he hinted one or two documents he created might have been contained classified information. “I immediately prepared an unclassified memo of the conversation about Flynn and discussed the matter with FBI senior leadership,” he testified about the one memo he later leaked about former national security adviser Lt. Gen. Michael Flynn. Additionally, he added, “My view was that the content of those unclassified, memorialization of those conversations was my recollection recorded.”

That’s when the problems escalated, because according to The Hill – which for the first time disclosed that the total number of memos linked to Comey’s nine conversations with Trump – when the seven memos Comey wrote regarding his nine conversations with Trump about Russia earlier this year were shown to Congress in recent days, the FBI claimed all were, in fact, deemed to be government documents. Oops. As The Hill reveals, four, or more than half, of the seven memos had markings making clear they contained information classified at the “secret” or “confidential” level, according to officials directly familiar with the matter. This is a major problem for Comey because FBI policy forbids any agent from releasing classified information or any information from ongoing investigations or sensitive operations without prior written permission, and mandates that all records created during official duties are considered to be government property.

“Unauthorized disclosure, misuse, or negligent handling of information contained in the files, electronic or paper, of the FBI or which I may acquire as an employee of the FBI could impair national security, place human life in jeopardy, result in the denial of due process, prevent the FBI from effectively discharging its responsibilities, or violate federal law,” states the agreement all FBI agents sign. FBI policy further adds that “all information acquired by me in connection with my official duties with the FBI and all official material to which I have access remain the property of the United States of America” and that an agent “will not reveal, by any means, any information or material from or related to FBI files or any other information acquired by virtue of my official employment to any unauthorized recipient without prior official written authorization by the FBI.”

Read more …

“..Not since Herbert C. Hoover has there been a more perfect scapegoat for an economic depression of the Fed’s making.”

Tales from the FOMC Underground (PT)

“What should we do?” began Yellen. “A decade of easy monetary policies has turned financial markets into a Las Vegas casino while the economy’s lazed around like my smelly house cats. What the heck was Bernanke thinking?” “Hell, Janet,” remarked New York Fed President William Dudley. “He wasn’t thinking. He soiled his pantaloons and then he soiled them again.” “So now we must clean up his stinky pile while he promotes his revisionist courage to act shtick. The reality is we must orchestrate a take-down of financial markets, and we must do it by year’s end.” “Well, gawd damn Bill!” barked St. Louis Fed President James Bullard. “With the exception of Neel, the $700 billion dollar bailout boy, don’t you think we all know that?”

“Hey, now!” interjected Minneapolis Fed President Neel Kashkari. “Don’t blame me. I was just carrying out Hank Paulson’s will, right Bill? Saving our boys’ bacon back at Goldman so they could continue doing god’s work.” “Besides Fish, it was you all who lined up behind Bernanke and tickled the poodle with his crazy QE experiment while I was busy chopping wood at Donner Pass and getting my fanny spanked in the California Governor’s race by retread Jerry Moonbeam Brown, of all people.” “Fair enough,” continued Bullard. “The point is, taking down the stock market will cause an extreme upset to the economy’s applecart. The mobs will come after us with torches and pitchforks.” “You see, the real trick is to do the dirty deed then disappear behind a fog of confusion. That’s what Greenspan would do. How can we pull that off?”

After a moment of silent contemplation, and a licked finger held up to the cool political winds drafting across the country… “Eureka! We can pin it on President Donald J. Trump!” exclaimed Chicago Fed President Charles Evans. “Could our good fortune be any better? Not since Herbert C. Hoover has there been a more perfect scapegoat for an economic depression of the Fed’s making.” “Hear, hear!” approved Yellen. “Damn the economy,” they bellowed in harmony… minus Kashkari. “This one’s on Trump!” “Bill, one last thing,” closed Yellen. “After the meeting, remember to give the public that shake n’ bake you dreamed up about crashing unemployment. We have to give off an air of being data dependent.” “That misdirection should twist them up until NFL football starts. Shortly after that, our work will be done…” “…and by the New Year, Congress and Joe public will be begging us to rescue the economy from the Fed’s… I mean… Trump’s disastrous economic program.”

Read more …

Earnings vs S&P. Something will give.

Stock Market Tsunami Siren Goes Off (WS)

Everyone who’s watching the stock market has their own reasons for their endless optimism, their doom-and-gloom visions, their bouts of anxiety that come with trying to sit on the fence until the very last moment, or their blasé attitude that nothing can go wrong because the Fed has their back. But there are some factors that are like a tsunami siren that should send inhabitants scrambling to higher ground. Since July 2012 – so over the past five years – the trailing 12-month earnings per share of all the companies in the S&P 500 index rose just 12% in total. Or just over 2% per year on average. Or barely at the rate of inflation – nothing more. These are not earnings under the Generally Accepted Accounting Principles (GAAP) but “adjusted earnings” as reported by companies to make their earnings look better.

Not all companies report “adjusted earnings.” Some just stick to GAAP earnings and live with the consequences. But many others also report “adjusted earnings,” and that’s what Wall Street propagates. “Adjusted earnings” are earnings with the bad stuff adjusted out of them, at the will of management. They generally display earnings in the most favorable light – hence significantly higher earnings than under GAAP. This is the most optimistic earnings number. It’s the number that data provider FactSet uses for its analyses, and these adjusted earnings seen in the most favorable light grew only a little over 2% per year on average for the S&P 500 companies over the past five years, or 12% in total. Yet, over the same period, the S&P 500 Index itself soared 80%.

And these adjusted earnings are now back where they’d been on March 2014, with no growth whatsoever. Total stagnation, even for adjusted earnings. And yet, over the same three-plus years, the S&P 500 index has soared 33%. This chart shows those adjusted earnings per share for all S&P 500 companies (black line) and the S&P 500 index (blue line). I marked July 2012 and March 2014:

Given that there has been zero earnings growth over the past three years, even under the most optimistic “adjusted earnings” scenario, and only about 2% per year on average over the past five years, the S&P 500 companies are not high-growth companies. On average, they’re stagnating companies with stagnating earnings. And the price-earnings ratio for stagnating companies should be low. In 2012 it was around 15.5. Now, as of July 7, it is nearly 26. In other words, earnings didn’t expand. The only thing that expanded was the multiple of those earnings to the share prices – the P/E ratio. Such periods of multiple expansion are common. They’re part of the stock market’s boom and bust cycle. And they’re invariably followed by periods of multiple contraction. How long can this period of multiple expansion go on? That’s what everyone wants to know. Projections include “forever.” But “forever” doesn’t exist in the stock market. The next segment of the cycle is a multiple contraction.

Read more …

The incessant call far a return to normal. There’s no such thing. The economy never recovered.

America Is Struggling With Economic Rot (BBG)

The Great Recession, and the financial crisis that preceded it, were such enormous and terrible events that they occupied most of our economic thinking for a decade. But now that the smoke has cleared and the economy has returned to a semblance of normality, we’re starting to think more about long-term trends. And evidence is mounting that the Great Recession may have drawn attention away from a slow rot that has been eating the U.S. economy since the turn of the century. Some of the top macroeconomists in the business have a new paper that reaches this conclusion. In “The Disappointing Recovery of Output after 2009,” John G. Fernald, Robert E. Hall, James H. Stock and Mark W. Watson break down the declines in growth and employment into a structural, long-term component and a short-term part related to the crash.

That’s an inherently hard thing to do, since there’s no universally accepted theory of how recessions work. But Fernald et al. use two accounting methods, and find basically the same thing – although the recession hurt the economy a lot, it happened to coincide with two trends that were slowly eroding the U.S.’s fundamentals. Those two trends are slowing productivity and reduced labor-force participation. Slow productivity growth is hardly news – Bloomberg View recently ran a whole series of articles about the phenomenon. This unhappy trend appears to have begun three years before the financial crisis:

As for labor-force participation, this has been falling since the turn of the century, though the last two years have seen a small uptick:

Both of these trends might have been exacerbated by the Great Recession. That economic disaster caused businesses to stop investing, which may have deprived them of the technology needed to increase productivity. Workers thrown out of employment by the recession might have seen their skills, connections and work ethic degrade, preventing them from going back to work even after the economy recovered.

Read more …

His advise: call a snap election.

May Appeals To Corbyn For Help In Coming Up With New Ideas (Ind.)

Theresa May is to insist she has the right vision for Britain and an “unshakeable sense of purpose” to build a fairer nation as she launches a fightback after her General Election gamble backfired. The Prime Minister will acknowledge that the loss of her Commons majority means she will have to adopt a different approach to government, signalling she is prepared to “debate and discuss” ideas with her opponents. But amid rumours of unrest within Tory ranks about her position, Ms May will insist her commitment is “undimmed” almost 12 months after entering Number 10 as Prime Minister. Her comments in a speech on Tuesday will be viewed as an attempt to relaunch her premiership after the humiliation of the election result and the need to strike a deal with the Democratic Unionist Party to prop up her administration in the Commons.

Ms May will return to her core message from when she succeeded David Cameron: a “commitment to greater fairness” and tackling “injustice and vested interests” in recognition that the EU referendum result was a “profound call for change across our country”. She will say: “Though the result of last month’s General Election was not what I wanted, those defining beliefs remain, my commitment to change in Britain is undimmed; my belief in the potential of the British people and what we can achieve together as a nation remains steadfast; and the determination I have to get to grips with the challenges posed by a changing world never more sure. “I am convinced that the path that I set out in that first speech outside Number 10 and upon which we have set ourselves as a Government remains the right one.

“It will lead to the stronger, fairer Britain that we need.” The fragile nature of Ms May’s position in the Commons will not stop her being “bold”, she will insist. “I think this country needs a Government that is prepared to take the bold action necessary to secure a better future for Britain and we are determined to be that Government. “In everything we do, we will act with an unshakeable sense of purpose to build the better, fairer Britain which we all want to see.”

Read more …

Hard to believe.

US-Russian Ceasefire Deal Holding In Southwest Syria (R.)

A U.S.-Russian brokered ceasefire for southwest Syria held through the day, a monitor and rebels said on Sunday, in the first peacemaking effort of the war by the U.S. government under President Donald Trump. The United States, Russia and Jordan reached the “de-escalation agreement,” which appeared to give Trump a diplomatic achievement at his first meeting with Russian President Vladimir Putin at the G20 summit in Germany this week. The Syrian Observatory for Human Rights, a Britain-based war monitor, said “calm prevailed” in the southwest since the truce began at noon (0900 GMT) on Sunday despite minor violations. Combatants briefly exchanged fire in Deraa province and in Quneitra around midnight, but this “did not threaten the ceasefire,” said Observatory Director Rami Abdulrahman.

Major Issam al Rayes, spokesman of the Southern Front coalition of Western-backed rebel groups, said “a cautious calm” continued into the evening. “The situation is relatively calm,” Suhaib al-Ruhail, a spokesman for the Alwiyat al-Furqan faction in Quneitra, said earlier. Another rebel official, in Deraa city, said there had been no significant fighting. It was quiet on the main Manshiya front near the border with Jordan, which he said had been the site of some of the heaviest army bombing in recent weeks. “Syrian ceasefire seems to be holding … Good!” Trump tweeted on Sunday. A Syrian official indicated that Damascus approved of the ceasefire deal, describing the government’s silence over it as a “sign of satisfaction.” “We welcome any step that would cease the fire and pave the way for peaceful solutions,” the government official told Reuters.

Read more …

Majestic animal. But 1,300 years is a big gap.

The Lynx Could Return To UK Within Months After 1,300-Year Absence (Ind.)

The Eurasian lynx could be stalking through British woodlands within months after plans were submitted to reintroduce the species, absent from Britain for about 1,300 years. Campaigners have applied for a licence to import six of the wildcats, which were hunted to extinction in the UK, and release them in Northumberland’s Kielder Forest. The Lynx Trust said the animals, which can grow to 1.3m in length, “belong” in Britain and there was a “moral obligation” to bring them back. The cats’ return would also generate millions of pounds for rural communities by attracting tourists, according to the group. But the proposal has met with opposition from sheep farmers, who claim their livestock would be put at risk.

The scheme would initially involve six lynx, four females and two males, being imported from Sweden and fitted with GPS tracking collars for a five-year trial. The trust applied to Natural England for permission to release the cats after it carried out an 11-month consultation. No date has been set for the proposed reintroduction but they cats could return to the UK by the end of 2017 if the plans are approved. The trust said in a statement: “In many other countries Eurasian lynx reintroduction has proven exceptionally low-conflict and wonderfully beneficial for the local communities that live alongside them, and we do sincerely hope that these cats, which thrived here for millions of years, do have the opportunity to prove they can still fit into both our ecology, and alongside local communities like those across the Kielder region.”

Read more …

Jul 022017
 
 July 2, 2017  Posted by at 9:54 am Finance Tagged with: , , , , , , , , , ,  


JMW Turner Lake Llanberis and Snowdon Color Study c.1800

 

Can The Bank of England Get Britain To Kick Its Cheap Credit Habit? (G.)
Britain ‘Is On The Brink Of The Worst House Price Collapse Since 1990s’ (DM)
China Tears Up Promises To UK And Shows The World Who Is In Charge (O.)
Court Ruling Sends Illinois Into Financial Abyss (ZH)
New Jersey Governor Chris Christie Orders Government Shutdown (CBS)
Only 2% of US Politicians Actually Want to Stop Arming Terrorists (Salles)
After Hersh Investigation, Media Connive in Propaganda War on Syria (CP)
How Do We Know that What Hersh Was Told Was True? (PCR)
‘Clean Coal’ Will Always Be a Fantasy (BBG)
Qatar Rejects Deadline Demands, Saying It Does Not Fear Military Action (G.)
Debt-Stricken Greece Gets Record Number Of Visitors (G.)
ECB To Inspect Greek Banks’ Progress On Cutting Bad Loans (R.)
Schaeuble Says Greek Governments To Blame For Pension Cuts (K.)

 

 

The BoE promoted, incited, cheap credit and the housing bubble by lowering rates. And now it has to kill off what it promoted? Who believes that? The role of central banks is truly poorly understood.

Can The Bank of England Get Britain To Kick Its Cheap Credit Habit? (G.)

One thing sure to upset Bank of England officials is any suggestion that the Old Lady of Threadneedle Street has gone soft on the banking industry and turns a blind eye to reckless lending. It brings back disturbing memories of the 2008 credit crunch, the chaos it brought to the economy and the damage it caused the institution’s reputation. Last week, the Bank of England, which has become the overarching regulator of the banking system, made a point of being tough on the banks following the publication of its latest financial stability report. It slapped a demand for more than £11bn of extra reserves on the major lenders – just in case the current economic slowdown should trigger a rise in defaults.

Governor Mark Carney also warned the lending industry that it should expect tougher rules on how it sells mortgages, car loans and credit cards should the current rise in borrowing rocket any further. But one question remains: can Carney and his troops tame the British consumer’s dependence on debt? The most recent figures would say the answer is no. Last week the Bank’s own figures showed that consumer credit grew by £1.7bn in May, the biggest increase since last November, and higher than the six-month average of £1.5bn. The annual rate at which UK consumers are loading up on their already heaving debt pile remained at 10.3% in the year to May. A look at the total stock of UK consumer credit shows that it reached £198bn in April.

That might seem small compared with the total amount of outstanding mortgage debt, which is around seven times larger, at £1.3trillion, but for banks, consumer credit accounts for a much higher proportion of losses. “Since 2007, UK banks’ total write-offs on UK consumer credit have been 10 times higher than on mortgages,” the BoE says. And all this rising debt comes at a time of extraordinary falls in the savings rate. The most recent GDP figures showed that households were putting aside rainy day money at the lowest rate on record. It is a situation that worries experts of all stripes – from Jane Tully, a senior director at the Money Advice Trust, the charity that runs National Debtline, to former Bank of England official Kate Barker, who was a member of the Bank’s interest rate-setting committee during the last crash.

Tully said: “We have already seen an 8% rise in the number of people helped by National Debtline by telephone this year, and all the signs are that demand for debt advice will continue to increase. The higher borrowing levels rise, the more households will be exposed to the risk of financial difficulty in the event of a downturn.” Barker is concerned that eight years of ultra-low interest rates are fuelling a dependence on cheap borrowing, without any end in sight. She says that the growth of car finance plans appears to be a side-effect of the clampdown in other areas of credit, in particular the tighter regulation of mortgages. “There is obviously an incentive to borrow, so as one area is clamped down on, the problem pops up in another,” she says.

Read more …

A 40% fall in prices sounds reasonable.

Britain ‘Is On The Brink Of The Worst House Price Collapse Since 1990s’ (DM)

House prices are teetering on the brink of a crash that could be as bad as the bust of the early 1990s, a leading expert has warned. There are already warning signs that prices are heading towards a near 40% plunge, warns Paul Cheshire, Professor of Economic Geography at the London School of Economics. It raises the alarming spectre of the return of ‘negative equity’ – when a house falls so far in value it is worth less than the mortgage – which hit one million people at the worst point in the 1990s. Speaking exclusively to The Mail on Sunday, Prof Cheshire, a former Government housing adviser, said: ‘We are due a significant correction in house prices. I think we are beginning to see signs that correction may be starting. ‘Historically, trends seem always to start in London and then move out across the rest of the country. In the capital, you are already seeing house prices rising less rapidly than in other parts of Britain.’

Such a shift could push many thousands of recent buyers into trouble. From 1989, the price boom fell apart over the next six years, with prices plunging by 37%. In its most recent figures, The National Association of Estate Agents reported the number of homes sold in May for less than the asking price rose to 77%. According to Prof Cheshire, the fall in real incomes – when wages fail to keep up with inflation – is likely to be the spark for a fall in house prices. Inflation hit 2.9% last month, while incomes only grew by 2.1%. Property experts and estate agents say the housing market in wealthier pockets of the country has been further hit by stamp duty hikes. Prof Christian Hilber of the LSE also warned: ‘If Brexit leads to a recession and/or sluggish growth for extended periods, then an extended and severe downturn is more likely than a short-lived and mild one.’ The Council of Mortgage Lenders said earlier this month that the housing market had ‘stalled’

Read more …

From bad to worse. The hubris boomerang.

China Tears Up Promises To UK And Shows The World Who Is In Charge (O.)

Xi Jinping’s tough talk in Hong Kong reflects growing self-confidence in China’s ability to shape world events and browbeat or ignore less powerful countries such as Britain. The Chinese president could have thrown a bone to the pro-democracy movement. He could have offered a sop on civil liberties and political rights to western opinion. Instead, he told Hong Kong who’s boss. Xi the hard man laid down the law according to Beijing. His message: fall into line, or else. His message to Britain was blunt, too, bordering on disdainful. China would not brook outside “interference” in the former colony. Forget about those guarantees of a free, open society painstakingly negotiated before the 1997 handover. “Any attempt to endanger China’s sovereignty and challenge the power of the central government is absolutely impermissible,” Xi said.

Under Xi’s bastardised version of the Basic Law, any criticism is henceforth forbidden, on pain of serious consequences. Boris Johnson received a stinging lesson in the new balance of power earlier in the week. “As we look to the future, Britain hopes that Hong Kong will make more progress toward a fully democratic and accountable system of government,” the foreign secretary intoned with uncharacteristic meekness. Johnson’s statement was shamefully deferential. He could, and should, have been more forceful about Beijing’s responsibilities and its own egregious, sometimes illegal meddling. But China took umbrage all the same. Liu Xiaoming, China’s ambassador in London, set Johnson straight: Hong Kong issues must henceforth be “handled properly” or overall ties would suffer.

Worse was to follow. On Friday, China’s foreign ministry formally renounced the 1984 Sino-British joint declaration, the basis on which Britain agreed to relinquish control of the colony. The two sides had agreed the treaty would remain in force for 50 years. “The Sino-British joint declaration, as a historical document, no longer has any practical significance, and it is not at all binding for the central government’s management over Hong Kong,” the spokesman Lu Kang declared. The Foreign Office swiftly rejected the demarche. But in his present bullish mood, Xi is not listening.

Read more …

Keeping up appearances is getting harder.

Court Ruling Sends Illinois Into Financial Abyss (ZH)

[..] the state remains without a spending plan, its tax receipts and outlays mostly on “autopilot”, leaving it with a record $15 billion of unpaid bills as it spent over $6 billion more than it brought in over the past year, and with $800 million in interest on the unpaid bills alone. The impasse has devastated social-service providers, shuttering services for the homeless, disabled and poor. The lack of state aid has wrecked havoc on universities, putting their accreditation at risk. However, in a “shocking” development, just hours remaining before the midnight deadline to pass the Illinois budget, and Illinois’ imminent loss of its investment grade rating, federal judge Joan Lefkow in Chicago ordered Illinois to come up with hundreds of millions of dollars it owes in Medicaid payments that state officials say the government doesn’t have, the Chicago Tribune reported.

Judge Lefkow ordered the state to make $586 million in monthly payments (from the current $160 million) as well as another $2 billion toward a $3 billion backlog of payments – a $167 million increase in monthly outlays – the state owes to managed care organizations that process payments to providers. While it is no secret that as part of its collapse into the financial abyss, Illinois has accumulated $15 billion in unpaid bills, the state’s Medicaid recipients had had enough, and went to court asking a judge to order the state to speed up its payments. On Friday, the court ruled in their favor. The problem, of course, is that Illinois can no more afford to pay the outstanding Medicaid bills, than it can to pay any of its $14,711,351,943.90 in overdue bills as of June 30. The backlog of unpaid claims the state owes to managed-care companies directly, as well as to the doctors, hospitals, clinics and other organizations “is crippling these providers and thereby dramatically reducing the Medicaid recipients’ access to health care,” Lefkow said in her ruling.

Friday’s court ruling, which meant that the near-insolvent state must pay an additional $593 million per month, may have been the straw that finally broke the Illinois camel’s back. “Friday’s ruling by the U.S. District Court takes the state’s finances from horrific to catastrophic,” Comptroller Susana Mendoza, a Democrat, said in an emailed statement after the ruling. [..] “A comprehensive budget plan must be passed immediately.” Realizing where all this is headed, she said that payments to bond holders won’t be interrupted. [..] As a result of the court decision, “payments to the state’s pension funds; state payroll including legislator pay; General State Aid to schools and payments to local governments – in some combination – will likely have to be cut.”

Read more …

ME, CT, IL and NJ. Who’s next, please?

New Jersey Governor Chris Christie Orders Government Shutdown (CBS)

New Jersey Gov. Chris Christie and the Democrat-led Legislature are returning to work to try to resolve the state’s first government shutdown since 2006 and the first under Christie. The Republican governor and the Democrat-led Legislature failed to reach an agreement on a new budget by the deadline at midnight Friday, CBS New York reports. In a news conference Saturday morning, Christie blamed Democratic State Assembly Speaker Vincent Prieto for causing the shutdown. “If there’s not a resolution to this today, everyone will be back tomorrow,” Christie said, calling the shutdown “embarrassing and pointless.” He also repeatedly referred to the government closure as “the speaker’s shutdown.” Christie later announced that he would address the full legislature later at the statehouse on Saturday.

Prieto remained steadfast in his opposition, reiterating that he won’t consider the plan as part of the budget process but would consider it once a budget is signed. Referring to the shutdown as “Gov. Christie’s Hostage Crisis Day One,” Prieto said he has made compromises that led to the budget now before the Legislature. “I am also ready to consider reasonable alternatives that protect ratepayers, but others must come to the table ready to be equally reasonable,” Prieto said. “Gov. Christie and the legislators who won’t vote ‘yes’ on the budget are responsible for this unacceptable shutdown. I compromised. I put up a budget bill for a vote. Others now must now do their part and fulfill their responsibilities.” Christie ordered nonessential services to close beginning Saturday. New Jerseyans were feeling the impact as the shutdown took effect, shuttering state parks and disrupting ferry service to Liberty and Ellis islands.

Read more …

Where the real power resides.

Only 2% of US Politicians Actually Want to Stop Arming Terrorists (Salles)

One of the few elected Democratic lawmakers with an extensive anti-war record, Rep. Tulsi Gabbard (D-Hawaii), has combined forces with Sen. Rand Paul (R-Kentucky) to push legislation through both the House and the Senate that would bar federal agencies from using taxpayer-backed funds to provide weapons, training, intelligence, or any other type of support to terrorist cells such as al-Qaeda, ISIS, or any other group that is associated with them in any way. The Stop Arming Terrorists Act is so unique that it’s also the only bill of its kind that would also bar the government from funneling money and weapons through other countries that support (directly or indirectly) terrorists such as Saudi Arabia. To our surprise – or should we say shame? – only 13 other lawmakers out of hundreds have co-sponsored Gabbard’s House bill. Paul’s Senate version of the bill, on the other hand, has zero co-sponsors.

While both pieces of legislation were introduced in early 2017, no real action has been taken as of yet. This proves that Washington refuses to support bills that would actually provoke positive chain reactions not only abroad but also at home. Why? Well, let’s look at the groups that would lose a great deal in case this bill is signed into law. With trillions of tax dollars flowing to companies such as Boeing, Lockheed Martin, and even IBM, among others, companies that invest heavily in weapons, cyber security systems, and other technologies that are widely used in times of war would stand to lose a lot – if not everything – if all of a sudden, the United States chose to become a nation that stands for peace and free market principles. For one, these companies have a heavy lobbying presence, ensuring that lawmakers sympathetic to their plight are elected every two years.

When the possibility of a new conflict appears on the horizon, these companies are the first to lobby heavily for action. But this dynamic isn’t a secret. We all know that the crony capitalist system that thrives in Washington, D.C., is the very bread and butter of politics in America. After all, President Dwight D. Eisenhower warned the nation in his farewell address in 1961 that “an immense military establishment and a large arms industry” were becoming the great powers behind U.S. politics, and that if we weren’t weary of this influence, we would risk living in a perpetual state of war. Still, we allowed it to take over. And there isn’t one industry powerful enough to counter this destructive authority. With the support of an army of well-established and connected millionaire lobbyists, the war machine operating in Washington is so powerful that anything can be turned into an existential threat.

Read more …

Obviously, if only 2% of US politicians are willing to stop the machine, it will march on. Ike may as well have said nothing.

After Hersh Investigation, Media Connive in Propaganda War on Syria (CP)

So what did Hersh’s investigation reveal? His sources in the US intelligence establishment – people who have helped him break some of the most important stories of the past few decades, from the Mai Lai massacre by American soldiers during the Vietnam war to US abuse of Iraqi prisoners at Abu Ghraib in 2004 – told him the official narrative that Syria’s Bashar Assad had dropped deadly sarin gas on the town of Khan Sheikhoun on April 4 was incorrect. Instead, they said, a Syrian plane dropped a bomb on a meeting of jihadi fighters that triggered secondary explosions in a storage depot, releasing a toxic cloud of chemicals that killed civilians nearby. It is an alternative narrative of these events that one might have assumed would be of intense interest to the media, given that Donald Trump approved a military strike on Syria based on the official narrative.

Hersh’s version suggests that Trump acted against the intelligence advice he received from his own officials, in a highly dangerous move that not only grossly violated international law but might have dragged Assad’s main ally, Russia, into the fray. The Syrian arena has the potential to trigger a serious confrontation between the world’s two major nuclear powers. But, in fact, the western media were supremely uninterested in the story. Hersh, once considered the journalist’s journalist, went hawking his investigation around the US and UK media to no avail. In the end, he could find a home for his revelations only in Germany, in the publication Welt am Sonntag. There are a couple of possible, even if highly improbable, reasons all English-language publications ignored Hersh’s story. Maybe they had evidence that his inside intelligence was wrong.

If so, they have yet to provide it. A rebuttal would require acknowledging Hersh’s story, and none seem willing to do that. Or maybe the media thought it was old news and would no longer interest their readers. It would be difficult to sustain such an interpretation, but at least it has an air of plausibility – except for everything that has happened since Hersh published last Sunday. His story has spawned two clear “spoiler” responses from those desperate to uphold the official narrative. Hersh’s revelations may have been entirely uninteresting to the western media, but strangely they have sent Washington into crisis mode. Of course, no US official has addressed Hersh’s investigation directly, which might have drawn attention to it and forced western media to reference it. Instead Washington has sought to deflect attention from Hersh’s alternative narrative and shore up the official one through misdirection.

That alone should raise the alarm that we are being manipulated, not informed. The first spoiler, made in the immediate wake of Hersh’s story, were statements from the Pentagon and White House warning that the US had evidence Assad was planning yet another chemical attack on his people and that Washington would respond extremely harshly if he did so. Here is how the Guardian reported the US threats: “The US said on Tuesday that it had observed preparations for a possible chemical weapons attack at a Syrian air base allegedly involved in a sarin attack in April following a warning from the White House that the Syrian regime would ‘pay a heavy price’ for further use of the weapons.”

And then on Friday, the second spoiler emerged. Two unnamed diplomats “confirmed” that a report by the Organisation for the Prohibition of Chemical Weapons (OPCW) had found that some of the victims from Khan Sheikhoun showed signs of poisoning by sarin or sarin-like substances.

Read more …

“How clear does an orchestration have to be before people are capable of recognizing the orchestration?”

How Do We Know that What Hersh Was Told Was True? (PCR)

If national security advisers gave Trump such excellent information about the alleged sarin gas attack, completely disproving any such attack, why was he given such bad advice about shooting down a Syrian war plane, or was it done outside of channels? The effect of the shootdown is to raise the chance of a confrontation with Russia, because Russia’s response apparently has been to declare a no-fly zone over the area of Russian and Syrian operations. How do we know that what Hersh was told was true? What if Trump was encouraged to order the Tomahawk strike as a way of interjecting the US directly into the conflict? Both the US and Israel have powerful reasons for wanting to overthrow Assad. However, ISIS, sent to do the job, has been defeated by Russia and Syria. Unless Washington can somehow get directly involved, the war is over.

The story Hersh was given also serves to damn Trump while absolving the intelligence services. Trump takes the hit for injecting the US directly into the conflict. Hersh’s story reads well, but it easily could be a false story planted on him. I am not saying that the story is false, but unless we learn more, it could be. What we do know is that the story given to Hersh by national security officials is inconsistent with the June 26 White House announcement that the US has “identified potential preparations for another chemical attack by the Assad regime.” The White House does not have the capability to conduct its own foreign intelligence gathering. The White House is informed by the national security and intelligence agencies. In the story given to Hersh, these officials are emphatic that not only were chemical weapons removed from Syria, but also that Assad would not use them or be permitted by the Russians to use them even if he had them.

Moreover, Hersh reports that he was told that Russia fully informed the US of the Syrian attack on ISIS in advance. The weapon was a guided bomb that Russia had supplied to Syria. Therefore, it could not have been a chemical weapon. As US national security officials made it clear to Hersh that they do not believe Syria did or would use any chemical weapons, what is the source for the White House’s announcement that preparations for another chemical attack by the Assad regime have been identified? Who lined up UN ambassador Nikki Haley and the UK Defence Minister Michael Fallon to be ready with statements in support of the White House announcement? Haley says: “Any further attacks done to the people of Syria will be blamed on Assad, but also on Russia & Iran who support him killing his own people.” Fallon says: “we will support” future US action in response to the use of chemical weapons in Syria.

How clear does an orchestration have to be before people are capable of recognizing the orchestration?

Read more …

Yeah, we really need Bloomberg editors’ opinions on matters they know nothing about. Mind you, carbon capture is an empty slogan.

‘Clean Coal’ Will Always Be a Fantasy (BBG)

“Clean coal,” always dubious as a concept and never proved as a reality, has now failed as business proposition. Southern Co. has decided to stop work on a process that would have captured carbon dioxide emissions from a coal plant in Mississippi. Giving up on the project, which was nearly $5 billion over budget and three years behind schedule, makes sense for Southern’s customers and shareholders. And giving up on carbon capture makes sense for the energy industry. The technology is too expensive and complicated to be deployed quickly or widely enough to appreciably protect the climate. The better way to cut back on carbon-dioxide emissions is far simpler: Use less coal. Luckily, that change is already under way. (Michael R. Bloomberg supports the Sierra Club’s Beyond Coal campaign, an effort to replace coal power with cleaner forms of energy.)

Carbon capture once seemed promising – even as recently as a decade ago, when coal fueled almost half of U.S. electricity generation. Back then, continued dependence on the dirty fuel looked inevitable, and a strategy to deal with its prodigious greenhouse-gas emissions seemed essential. Hence, utilities embarked on model coal plants that would capture the carbon dioxide before it could enter the atmosphere. Only a couple have been built, in addition to Southern’s in Kemper County, Mississippi, and none has established an economic case for carbon capture. The Petra Nova facility, in Texas, was reportedly finished on time and on budget, but its construction required a $190 million federal grant, and the carbon-capture unit requires a separate gas-fired power plant.

Canada’s Boundary Dam carbon-capture unit, meanwhile, has operated much less efficiently than expected, suffering multiple breakdowns and requiring expensive repairs. Unfortunately, such costs and complexities are unlikely to diminish very much, and few such facilities are likely to be built worldwide in the next 20 years. A new report issued by the Global Warming Policy Foundation concludes that carbon capture for coal-fired power has “no plausible economic future.”

Read more …

Is it time to cut the House of Saud down to size?

Qatar Rejects Deadline Demands, Saying It Does Not Fear Military Action (G.)

Qatar said on Saturday it does not fear any military retaliation for refusing to meet a Monday deadline to comply with a list of demands from four Arab states that have imposed a de-facto blockade on the Gulf nation. During a visit to Rome, foreign minister Sheikh Mohammed bin Abdulrahman Al Thani again rejected the demands as an infringement on Qatar’s sovereignty. He said any country is free to raise grievances with Qatar, provided they have proof, but said any such conflicts should be worked out through negotiation, not by imposing ultimatums. “We believe that the world is governed by international laws, that don’t allow big countries to bully small countries,” he told a press conference in Italy. “No one has the right to issue to a sovereign country an ultimatum.” Saudi Arabia, Egypt, Bahrain and the United Arab Emirates cut diplomatic ties with Qatar last month and shut down land, sea and air links.

They issued a 13-point list of demands, including curbing diplomatic ties to Iran, severing ties with the Muslim Brotherhood and shuttering the Al-Jazeera news network. They accuse Qatar of supporting regional terror groups, a charge Qatar denies. Al Thani rejected the demands and said they were never meant to be accepted. “There is no fear from whatever action would be taken; Qatar is prepared to face whatever consequences,” he said. “But as I have mentioned … there is an international law that should not be violated and there is a border that should not be crossed.” While in Rome, Al Thani met with Italian foreign minister Angelino Alfano, who backed the Kuwait-led mediation effort and urged the countries involved in the standoff to “abstain from further actions that could aggravate the situation”. He added that he hoped Italian companies could further consolidate their presence in Qatar.

Read more …

I read these things and think I must be missing something: “..Greece is braced for a record-breaking 30m holidaymakers this year..” and “For every extra 30 holidaymakers a job is created”.

That sounds like a lot of jobs. But seriously, a country that depends too much on tourism is not a healthy country. Not enough stability or resilience. The longer the US and EU wait, the more unstable Greece will become.

Debt-Stricken Greece Gets Record Number Of Visitors (G.)

Up high, above the hills of Arcadia, historic Dimitsana is on a roll. Its hotels are brimming, its cafes are full, and its footpaths and monasteries lure busloads of tourists decanted daily from other parts of the Peloponnese. Either side of the main road that splits the mountain village – in a world far removed from talk of emergency bailout funds, international stewardship and gruelling austerity – Greeks are hard at work, running boutique guesthouses, eateries and bars in the stone mansions that line Dimitsana’s cobbled streets. “Business is very good,” says Labis Baxevanos, the village’s deputy mayor, who owns a patisserie along the strip. “So good that a lot of younger couples have come to work here since the country’s economic crisis began.”

Debt-stricken Greece is braced for a record-breaking 30m holidaymakers this year, almost three times its population. Addressing the Panhellenic Exporters Association last week, the tourism minister Elena Kountoura said that between January and May there had been a noticeable increase in arrivals, revenues and occupancy rates with summer bookings in some areas rising by as much as 70%. Travel receipts grew by 2.4% or €23m (£20m). After eight years of grinding austerity, the influx is a tangible gift, on a par with the €8.5bn financial lifeline thrown Greece earlier this month to once again avert default. Dimitsana – once famous for the gunpowder mills that produced the firepower in the nation’s 1821 war of independence against Ottoman rule – is emblematic of the entrepreneurial spirit taking root as a result of the boom.

“Tourism is our lifejacket,” says Theonimfi Koraki, who opened a boutique hotel in the village last summer. “The aim now is diversity and drawing out the season all year round. Here in Arcadia the creation of the 75km-long Menalon [walking] trail has been hugely successful for example with foreign tourists. It has greatly helped the development of the region.” With the exception of shipping, tourism is Greece’s biggest foreign earner, the mainstay of an economy that has otherwise contracted by 27% since late 2009 when the country’s debt crisis began. The industry accounted for eight out of 10 new jobs in 2016, vital for a nation hit by crippling levels of unemployment. Bank of Greece figures show around 23.5 million tourists visited in 2015, generating €14.2bn of revenues, or 24% of gross domestic product. Last year, the country’s tourism confederation, SETE, announced arrivals of 27.5 million, an all-time high.

Increasingly, the sector has helped boost much-needed job creation, according to data released by the labour ministry. Recently, the prime minister, Alexis Tsipras, said April and May had been record months for tackling the problem with 92,000 and 89,500 jobs created respectively. For every extra 30 holidaymakers a job is created, say officials. They have been at pains to make the point as striking municipal waste workers not only unnerved tour operators this week but highlighted how important tourism is for the economy.

Read more …

Translation: the Troika is not done with Greece yet. The bad loans issue will be used to throw more Greeks out of their homes etc.

ECB To Inspect Greek Banks’ Progress On Cutting Bad Loans (R.)

The European Central Bank plans to inspect Greek banks this year to monitor their progress in working off their huge pile of unpaid loans, ECB director Sabine Lautenschlaeger said on Friday. Greek banks have been cutting their share of non-performing loans (NPL) to companies and households, which account for slightly more than half of their books as a result of a severe economic crisis, to meet targets set by the ECB. The ECB supervises Greece’s four largest banks, or significant institutions (SIs), and is one of the three bodies responsible for the country’s bailout, along with the European Commission and the IMF.

“The ECB will perform on-site missions at the Greek SIs during the second half of 2017, a period in which the main operational measures to address NPLs … have to be already implemented,” Lautenschlaeger said in a letter to IMF chief Christine Lagarde. She was responding to an IMF request for information on the ECB’s supervisory work in Greece in the context of a possible IMF program for the country. Greece secured a credit lifeline from euro zone governments earlier this month. The IMF offered Athens a standby arrangement but said it won’t disburse any money until it obtains greater detail on debt relief for the country.

Read more …

The best for last today. Schaeuble suggests that Greece could have cut elsewhere and still meet Troika demands. Like kill all health care and education, presumably.

Schaeuble Says Greek Governments To Blame For Pension Cuts (K.)

German Finance Minister Wolfgang Schaeuble has insisted in an interview that successive Greek governments were to blame for the pension cuts that have been enforced in Greece. The German minister stressed in an interview with Ta Nea newspaper on Saturday that the Greek governments are the ones that decided the mix of policies needed to achieve the country’s targets. He also said that the IMF will never be involved again in a program to rescue a European country. Referring to his Greek counterpart Euclid Tsakalotos, he said they communicate frequently, while he dismissed his flamboyant predecessor Yianis Varoufakis as someone he no longer can “take seriously.”

Read more …

Jul 092016
 
 July 9, 2016  Posted by at 2:59 pm Finance Tagged with: , , , , , , , ,  


Ann Rosener San Francisco, California. The Bank of America 1943

The post-Brexit ‘conversation’ in Britain is taking on grotesque proportions. Nobody seems to know how to react, at least not in a rational manner. They all look to be stuck in phase one of Kübler Ross’s Five Stages of Grief, i.e. Denial. Phase two is supposed to be Anger, and while there’s plenty of that, the shape is takes makes one think Angry Denial, instead of a progression between phases.

That is to say, I don’t think I’ve seen one voice expressing anger at themselves. It’s all somebody else’s fault. And it just keeps going. After Farage, Johnson, Gove et al had been blamed for all there’s wrong with everyone else’s lives, now the anger is pointed at the two women who are supposed to be competing for the poisoned chalice of UK prime minister. That both belong to the clique which has just been voted down 2 weeks ago doesn’t seem to bother anyone. That is not smart.

But if you must insist on calling 17 million of your neighbors ‘racist’ and ‘stupid’ just to feel better about yourself, perhaps there’s no denying that the Five Stages insist on taking their time. Problem with that is there is no such time, before you know what’s happened the nation will be stuck with another ‘leader’ that far too many people are not going to be listening to. A game of ‘who said what about whom’ is not helping.

A main issue would seem to be the Anglo(-Saxon) disease version 2.0, as I label it: whereas numerous countries around the world have seen new political parties rise to the fore, Britain, the US, Australia etc. are sticking with the same old same old, even if that makes them essentially ungovernable. What Britain needs is Podemos or a Five-Star movement, and so do the US, Canada, Australia.

The global economic system is now collapsing so overtly that nothing incumbent powers do can hide it any longer. A more flexible system, and a less ‘let’s stick with what we got’ view of life, can be very helpful during times like these, because they can ease the friction of established powers losing their power, no matter how painful that process still will be.

In many if not most countries there is hardly any difference anymore between what used to be right and left in politics. Barack Obama, Tony Blair and soon perhaps Hillary Clinton were voted in by what used to be the left wing of their countries, but they might just as well have come from the other side of the aisle. They all represent the establishment, not the people.

That has worked to an extent so far, but now it is over, simply because too many people have too little left to feel comfortable in their lives. In that regard it’s interesting to see how Labour leader Jeremy Corbyn gets treated by his own party for wanting to take it ‘too far’ to the left, i.e. to represent the people. This may split up the party after all, and Corbyn would and should be happy to be rid of the right wing of the party, but he has caught Anglo Disease 2.0 too.

If Bernie Sanders or Jeremy Corbyn, even Donald Trump for that matter, were Italian, Spanish or even German, they would have started another party, not try to ‘reform’ an existing one. It doesn’t work, or it’s too much trouble trying. The disconnection is too great, between what the parties once stood for and stand for now, and between what they say and what they do.

 

Anglo Disease 1.0, by the way, is the government-induced blowing of housing bubbles in London, Vancouver, Sydney, Auckland etc etc. Take a good look at this graph and you can see what Beautiful Brexit (think I should patent the term?) is set to do to UK home prices: make then affordable again. Why do so many people apparently think that’s a terrible thing?

And Anglo Disease 1.0 is plenty contagious. Look at private debt levels in the Netherlands, where in the years after the graph below, 2015-6, home prices have kept rising and so have sales. Private debt at 800% (900% now?) of GDP is not a healthy thing no matter how you twist it, but they’ll all tell you they’re making smart investments and money hand over fist.


EA=Euro Area

Government and/or central bank induced bubbles are criminal. They make an economy look better temporarily, but people will have hefty prices to pay when they pop. And pop is just what Brexit does with the UK housing bubble. Whether that’s a good or a bad thing is perhaps up to one’s own personal judgment, but no thinking body would say yes when asked if they prefer living in a bubble.

For me, sitting inside a 10-year central bank liquidity bubble, I’m mostly afraid for those who have ever less left. The jobless, pensioners, anyone relying on benefits or fixed income, have yet to realize how much worse off they will be, but they will. ‘Homeowners’ with huge mortgages, even if they’re at low rates, will see ‘values’ plunge to the point where lenders will come with margin calls. And what then? More bank bail-outs?

Central banks and governments have been blowing their bubbles with one goal in mind: to keep incumbent powers in place. That part has succeeded, but it’s the only part, and the price to be paid by everyone else will be horrendous. And in the end the incumbents will be gone regardless, albeit with many pockets full of loot.

The last move the ‘rulers’ have left up their sleeves is perhaps to go to war with Russia, but I don’t see the people of Europe, despite 10+ years of heavy anti-Putin propaganda, allowing it. Europe might instead come to resemble the US, where people have another sort of battle to fight, a domestic one, which if not properly approached could lead to -more and increasing- very ugly confrontations.

Trump may not be the best person to lead his country into that, but the establishment, represented by Hillary, looks a much worse choice. Trump doesn’t owe nearly as much to those behind the curtains who have so much to lose. Hey, I wish there were better people available, but they’re not. Bernie Sanders has been outpropagandized and outmaneuvered, and he’s not perfect either.

America, too, will have to reinvent itself, just like so many nations across the planet. At least Trump will give the country a shot at not being dragged down into another war it can’t win, in or with Russia or China. Still, the art of propaganda on all sides and in all media has reached such dizzying heights and contortions that not a lot will seem obvious anymore.

One thing will though: increasing poverty. That will be the main factor to drive out the old and vote in the new. But the new will have two faces, one of which is Podemos, Sanders, Grillo or Corbyn, and one of which is some form or another of extreme right wing voices. Who come with their own Denial and Anger and other never completed Five Stages of Grief.

 

 

Elizabeth Kübler Ross: On Death and Dying – 1969

1 – Denial. Denial is a conscious or unconscious refusal to accept facts, information, reality, etc., relating to the situation concerned. …
2 – Anger.
3 – Bargaining.
4 – Depression. Also referred to as preparatory grieving. …
5 – Acceptance.

 

 

Jun 102016
 
 June 10, 2016  Posted by at 8:24 am Finance Tagged with: , , , , , , , ,  


Lewis Wickes Hine Workers in Maryland packing company 1909

Marc Faber: Brexit Would Be Best Thing To Happen in Britain’s History (CNBC)
Brexit Might Trigger Run On Britain’s Record Financial Debts, S&P Warns (AEP)
Heavy Cost Of UK’s Access To The Single Market In Europe (Connolly)
Germans Get Richer While Southern Europe Lags (R.)
Bill Gross Says Negative Rates Are Like ‘Supernova’ That Will Explode (BBG)
It Took The US $10 In New Debt To Create $1 Of Growth In Q1 (ZH)
Global Investors Are Fleeing US Stocks at a Record Pace (BBG)
US Tax Receipts Signaling Recession? (Mish)
Ready, Set, Crash – Could New Zealand Be Next To Fall? (NZ Herland)
Pity Poor China: There’s No Easy Fix to the S-Curve (CH Smith)
China’s Propaganda Department Not Good Enough At Propaganda (AFP)
How Mishandling Classified Info Affects People Not Named Clinton (USA T.)
They Died of Progress (Greer)
The Money Cult (Dmitry Orlov)
In Greek Refugee Camps, Wait For Asylum Fuels Unrest (R.)
3,000 Migrants Rescued Off Italian Coast; Two Bodies Found (R.)

Not a fan of the Union.

Marc Faber: Brexit Would Be Best Thing To Happen in Britain’s History (CNBC)

As investors wring their hands over the impact of Britain’s potential withdrawal from the European Union, otherwise known as “Brexit,” one of the market’s biggest bears delivered a surprising message. “I happen to think that a Brexit would be bullish for global economic growth,” Marc Faber told CNBC’s “Trading Nation” on Wednesday. “It would give other countries incentive to leave the badly organized EU.” The editor and publisher of The Gloom, Boom & Doom Report emphasized that a vote on June 23 by Britain to leave the EU would be an ideal course of action for the country. Additionally, Faber expressed the belief that small countries like Croatia, Estonia and Malta would also prosper as independent nations versus being a part of a larger system.

Currently, the EU has 28 members that operate within a single market with the goal of encouraging the free movement of goods and services. British Prime Minister David Cameron has expressed disdain for leaving the bloc, explaining in a piece for The Telegraph that doing so would “be the gamble of the century.” However, that’s a risk that Faber says Britain should be willing to take and noted that the EU is an “empire that is hugely bureaucratic.” Faber further reasoned that a Brexit would not be a disaster. “On the contrary, it would be the best thing for Britain that would ever happen!” Faber defended his case by citing Switzerland, which is not a member of the EU nor the European Economic Area, but instead operates in the “single” market. That enables the Swiss to have rights in the U.K., but theoretically allows them to operate independently of both groups.

Read more …

“The level of debt coming due over the next 12 months is 755pc of the country’s external receipts..”

Brexit Might Trigger Run On Britain’s Record Financial Debts, S&P Warns (AEP)

Britain is the world’s most vulnerable state on a key measure of short-term debt and credit markets might suddenly seize up if voters opt for Brexit, Standard & Poor’s has warned. The US credit rating agency is crystal clear that Britain will be stripped of its coveted AAA status immediately and may face a double-barrelled downgrade if the country takes a leap in dark, jeopardizing its trading and financial ties to its biggest market. “We are categorical about this,” said Moritz Kraemer, the agency’s head of sovereign ratings. “There is no clear ‘Plan B’ in the UK and we are not going to wait until we find out what the British position actually is. We could potentially see a two-notch downgrade,” he told The Daily Telegraph.

Mr Kraemer said the British financial system is extremely dependent on external financing. This is the Achilles Heel for an economy that relies so heavily on the City of London, and has a current account deficit above 5pc of GDP – the highest in Britain’s peace-time history. The level of debt coming due over the next 12 months is 755pc of the country’s external receipts, the highest for all 131 sovereign states rated by S&P. This compares to 318pc for the US and 316pc for France, the next two states most exposed. Much of this short-term debt is owed by banks operating in the City, some of them American, Japanese, European, or Mid-East institutions.

In theory, the liabilities are matched by assets and therefore simply ‘net out’ if stress forces banks to shrink their operations, but crises have a nasty habit of revealing skeletons in the cupboard. “If there is no currency and maturity mismatch, then there is no big issue. But we don’t know that for sure,” Mr Kraemer said. “These sums are very large and have to be rolled over constantly. Nobody has ever hesitated in the past because it was always assumed that Britain is a safe haven and there is no risk,” he said.

Read more …

Bernard Connolly was never a fan of the EU. He sees Germany take over if Britain remains in the Union.

Heavy Cost Of UK’s Access To The Single Market In Europe (Connolly)

We are told that Britain’s net contribution to the EU budget, about 0.5pc of our GDP after the rebate (our gross contribution is much bigger; what we “get back” is EU payments to universities and interest groups as part of the EU’s subversion strategy) is the entry fee we must pay for “access” to the EU single market. Why do numerous other countries, with equal access to the single market, receive substantial net payments from the EU – that is, from us and a few other countries? Jean-Claude Juncker has said that France gets away with breaking the budgetary rules “because it’s France”. Britain is gleefully given the rough end of the stick by our partners “because it’s Britain”.

What access brings to Britain is the enormous cost of single market regulations imposed on all firms, not just the very small minority of exporters to the EU. It also brings higher prices in the shops because we are forced to apply the EU’s common external tariff to imports from third countries. Importantly, it brings a massive deficit with the EU on trade in goods and services – reducing the amount we can spend without borrowing from abroad by close to a massive 4pc of our GDP. But we do borrow. The trade deficit with the EU is the biggest single contributor to Britain’s unsustainable current-account position.

We do not yet have much net debt to the rest of the world. But if the current account deficit continues at anything like its present rate it will not be long before we build up foreign debt that leaves us with four choices: default; an economic depression like that in Greece; substantial sterling depreciation; and total political submission to Germany in the hope of getting permanent transfers from that country. The last option is far-fetched beyond science fiction. The first and second are obviously unthinkable for a country such as Britain, at least if we restore control over our own affairs by leaving the EU. That leaves just sterling depreciation, and the sooner it happens the less disruptive it will be. The more Leave thrives in the opinion polls, the better it is for the prospect of avoiding default and depression.

Read more …

Why the eurozone should fall. Everything moves towards the center. Design flaw, intentional or not, can’t be fixed.

Germans Get Richer While Southern Europe Lags (R.)

The wealth disparity in the euro zone is increasing, with rising property prices helping Germans get richer while southern European countries lag behind, a study has found. While the gap between northern countries, such as the Netherlands, and southern states like Portugal has long been a feature of the euro bloc, the study by an arm of German fund manager Flossbach von Storch shows it is getting ever wider. Taking a basket of items including property, stocks, art and expensive wine, the research concluded that wealth in Germany and Austria jumped more than 7% at the end of 2015 compared to a year earlier.

That was roughly twice the growth rate of Italy and Spain, while Greeks saw their wealth drop by more than 4%. Property prices, which, for example, jumped by more than 6% in Germany, are the biggest driver of wealth. This difference leads to political tension in the 19-member euro zone, while weak property prices in southern countries hit their banks, which hold homes and commercial property as security for loans. “Until 2006 when the bubble burst, countries in the south were really taking off. Now they are in a Japan-like situation,” said Thomas Mayer, founder of the research institute that carried out the study.

Read more …

Inevitable.

Bill Gross Says Negative Rates Are Like ‘Supernova’ That Will Explode (BBG)

Bill Gross, the manager of the $1.4 billion Janus Global Unconstrained Bond Fund, warned central bank policies that pushed trillions of dollars into bonds with negative interest rates will eventually backfire violently. “Global yields lowest in 500 years of recorded history,” Gross, 72, wrote Thursday on the Janus Twitter site. “$10 trillion of neg. rate bonds. This is a supernova that will explode one day.” A supernova is a star at the end of its life that suddenly increases greatly in brightness because of a catastrophic explosion that ejects most of its mass. Gross has argued for some time that the economy is at the end of a decades-long cycle of expanding credit that has culminated in negative interest rates, a situation he said is unsustainable.

Rather than spurring economic growth, low rates are promoting asset bubbles as investors reach for higher yields while punishing individual savers and industries that rely on interest rates, such as bank and insurance companies, according to Gross. He said in a June 2 note that the era of 7.5% annualized investment gains is history and that investors should eventually take positions to protect principal or profit from market declines. Returns will be low, risk will be high and at some point the ‘Intelligent Investor’ must decide that we are in a new era with conditions that demand a different approach,” he wrote. “Negative durations? Voiding or shorting corporate credit? Buying instead of selling volatility? Staying liquid with large amounts of cash? These are all potential ‘negative’ carry positions that at some point may capture capital gains or at a minimum preserve principal.”

Read more …

You can neither purchase nor borrow growth. When China reaches this phase, watch out.

It Took The US $10 In New Debt To Create $1 Of Growth In Q1 (ZH)

today we had a chance to update the total US credit following the release of the Fed’s Flow of Funds (Z.1) statement, which is usually parsed for its tracking of changes to household wealth. And while it showed that in  the first quarter the net worth of US residents, mostly the wealthy ones as the bulk of financial assets is held by a small fraction of the total population, rose by $837 billion to $88 trillion mostly as a result of a change in real estate holdings, we were more interest in the aggregate picture. It wasn’t pretty.

As a reminder, according to the latest BEA revision, nominal Q1 GDP was $18.23 trillion, an increase of just $65 billion from the previous quarter or an annualized 0.7% rate, the question is how much credit had to be created to generate this growth. Well, according to the Z.1, total credit rose to a new record high $64.1 trillion. This was an increase of $645 billion from the previos quarter. It means that in the first quarter, it “cost” $10 in new debt to generate just $1 in new economic growth!

 

And here are the two other key charts: the first, showing total credit (debt and loans) vs GDP growth since 1950. The trend is hardly anyone’s friend, except for those who create the debt out of thin air to pocket the ever lower cash flows associated with it (and await the next inevitable bailout):

 

More importantly, on a leverage ratio basis, the US economy is now at a level of 352% total credit/GDP, the highest since Q1 2013, and a level which has been relatively flat since it peaked at 380% just before the crash. One way to read this chart perhaps is that the “carrying debt capacity” of the US economy is roughly 380% at which point something “unexpected” happens. At the current rate of surging credit relative to slowing GDP, the US economy should be there in the not too distant future.

Read more …

This supposes people merely switch their money somewhere else, but some may simply need it fr other purposes.

Global Investors Are Fleeing US Stocks at a Record Pace (BBG)

The most determined seller of U.S. stocks may not be in the U.S. at all. Investors outside the country dumped $128 billion in American shares over the past year, data from the U.S. Treasury International Capital System show. Despite the higher quality of companies in the U.S., long-term investors may be drawn to the faster pace of growth in other economies, said Stewart Warther, an equity strategist at BNP Paribas.

Read more …

There’s those nasty pesky withholding taxes again.

US Tax Receipts Signaling Recession? (Mish)

US federal personal tax receipts receipts are falling fast. So is the Evercore ISI State Tax Survey. The last two times the survey plunged this much, the US was already in recession. Is it different this time?

Read more …

Boy oh boy.

Ready, Set, Crash – Could New Zealand Be Next To Fall? (NZ Herland)

“We’ve almost got the perfect storm,” says veteran fund manager Brian Gaynor as he reels off the many reasons New Zealand house prices and debt levels are soaring to precipitous heights. There are many ingredients. But right now, New Zealand seems to have them all: not enough building, restrictions on development, surging migration, baby boomer savings, low interest rates and banks that are all too happy to lend for property investment. “When you get the perfect storm like we did in the 1980s with the sharemarket, you see things just go up and up. People start to believe they will never fall,” he says.

“People didn’t believe the sharemarket would fall in the 80s. I’d come in from a trip to Australia and the guy at customs wouldn’t let me in unless I gave him sharemarket tips. It was just euphoria. Everyone was talking about the sharemarket. Now everyone is talking about the property market.” New Zealand’s gross debt is a whopping half trillion dollars; housing now accounts for $218 billion of that. As of April that housing debt was growing at an annualised rate of 8.3% – and that rate is accelerating. The median price of an Auckland house has almost doubled since the bottom of the last cycle in 2009, in the depths of the global financial crisis. The boom has now spilt over into the regions, with places like Hamilton and Tauranga surging 26 and 23% respectively in the past 12 months.

Read more …

We should think about how scary this is.

Pity Poor China: There’s No Easy Fix to the S-Curve (CH Smith)

The fundamental context of China’s economy is that it has traced out an S-Curve – as did previous fast-developing nations such as Japan and South Korea. The S-Curve can be likened to a rocket’s trajectory: first, there’s an ignition phase, as the fuel of financialization, cheap labor and untapped productive capacity is ignited. The boost phase lasts as long as credit-fueled production and consumption expand rapidly. In the boost phase, investors and financial authorities can do no wrong. The high growth rate of credit and production overwhelms all other factors, as the virtuous cycle of expanding profits and production increases wages which then support further expansion of credit and consumption which then supports more production, and so on.

A vast tide of foreign investment fuels an equally vast expansion of fixed capital assets such as factories and new homes. But then the fuel of financialization is consumed, and the previously fast-growing economy slows to stall speed. Depending on how much leverage, corruption and wealth has piled up in the boost phase, this phase may last a few years. This is the top of the S-Curve. As the economy weakens, everything that worked in the boost phase no longer works: expanding credit no longer boosts growth, inflating yet another real estate bubble no longer generates a widespread wealth effect, and every effort to shift from being an export-dependent economy to a self-supporting consumer economy fails to achieve liftoff.

Read more …

Study western media to see how it’s done?!

China’s Propaganda Department Not Good Enough At Propaganda (AFP)

hina’s propaganda department, tasked with controlling the media and arts, has been given a slap on the wrist for not being good enough at shaping public opinion, according to a report on a government website. The Central Commission for Discipline Inspection (CCDI) posted an article on its website Wednesday that described findings from its two-month-long probe of the ruling Communist party’s propaganda department, which began in February. Leaders in the department did not feel a sufficient sense of responsibility for undertaking ideological work, the piece cited CCDI member and investigation spokesman Wang Huaichen as saying. Art was not directed clearly enough towards socialist aims and political thought not emphasised enough in universities, he was quoted as saying.

News propaganda was not targeted or effective enough, especially in the field of new media, where the department had failed to fully implement the principle of “the party controlling the media”, the post cited him as saying. Wang called upon the department to make propaganda appear more valid by enhancing its attractiveness and appeal, it said. The Communist party tolerates no opposition to its rule and newspapers, websites, and broadcast media are strictly controlled. An army of censors patrols social media and many Western news websites are blocked. President Xi Jinping reminded top state media outlets to “strictly adhere to the orders of the Chinese Communist Party” during a series of high-profile visits to their headquarters in February.

Read more …

How Hillary stands out against the US Marine Corps. Click the link to read a young man’s sense of duty and honor. Perhaps a bit overcharged, but what Clinton tries to get away with drags down the entire nation. She’s not the only one to flaunt the rules, but if the commander-in-chief -supposing she’s elected- does this, what does that tell everyone else? I can’t see the military and the FBI accepting it. Maybe the higher-ups would, but you don’t want widespread unrest in the ranks.

How Mishandling Classified Info Affects People Not Named Clinton (USA T.)

Clinton is the antithesis of that young captain, someone with no honor, little courage and commitment only to her endless ambition. This has nothing to do with gender, party affiliation, ideology or policy. It is a question of character — not just hers, but ours. Electing Clinton would mean abandoning holding people accountable for grievous errors of integrity and responsibility. What we already know about her security infractions should disqualify her for any government position that deals in information critical to mission success, domestic or foreign. But beyond that, her responses to being found out — dismissing its importance, claiming ignorance, blaming others — indict her beyond anything the investigation can reveal. Those elements reveal her character. And the saddest thing is that so many in America seem not to care.

Read more …

The downfall of the tech religion?!

They Died of Progress (Greer)

[..] the unspeakable has become the inescapable in today’s world. It’s become a running joke on the internet that the word “upgrade” inevitably means poorer service, fewer benefits, and more annoyances for those who have to deal with the new and allegedly improved product. The same logic can be applied equally well across the entire landscape of modern technology.  What’s new, innovative, revolutionary, game-changing, and so on through the usual litany of overheated adjectives, isn’t necessarily an improvement. It can be, and very often is, a disaster. Examples could be drawn from an astonishingly broad range of contemporary sources, but I have a particular set of examples in mind. 

To make sense of those examples, it’s going to be necessary to talk about military affairs. As with most things in today’s America, the collective conversation of our time provides two and only two acceptable ways to discuss those, and neither of them have anything actually useful to say. The first of them, common among the current crop of American pseudoconservatives, consists of mindless cheerleading; the second, common among the current crop of pseudoliberals all over the industrial world, consists of moralizing platitudes. I don’t particularly want to address the moralizing platitudes just now, other than to say that yes, war is ghastly; no, it’s not going away; and it’s not particularly edifying to watch members of the privileged classes in the countries currently on top of the international order insist piously that war ought to be abandoned forever, just in time to keep their own nations from being displaced from positions they won and kept at gunpoint not that many decades ago. 

The cheerleading is another matter, and requires a more detailed analysis. It’s common among the pseudoconservative right these days to insist that the United States is by definition the world’s most powerful nation, with so overwhelming a preponderance of military might that every other nation will inevitably have to bow to our will or get steamrollered. That sort of thinking backstops the mania for foreign intervention that guides neoconservatives such as Hillary Clinton on their merry way, overthrowing governments and destabilizing nations under the fond delusion that the blowback from these little adventures can never actually touch the United States. 

In America these days, a great deal of this sort of cheerleading focuses on high-tech weapons systems—inevitably, since so much of contemporary American pop culture has become gizmocentric to the point of self-parody. Visit a website that deals with public affairs from a right-of-center viewpoint, and odds are you’ll find a flurry of articles praising the glories of this or that military technology with the sort of moist-palmed rapture that teenage boys used to direct to girlie-mag centerfolds. The identical attitude can be found in a dizzying array of venues these days, very much including Pentagon press releases and the bombastic speeches of politicians who are safely insulated from the realities of war. There’s only one small difficulty here, which is that much of the hardware in question doesn’t work. 

Read more …

Lovely from Dmitry.

The Money Cult (Dmitry Orlov)

are there any unintended consequences of negative interest rates? Unintended consequences are hard to think about, and most people get a headache even trying. How can it be that clean, plentiful nuclear energy will eventually pollute the whole planet with long-lived radionuclides, resulting sky-high cancer rates? How can it be that wonderful genetically modified seeds will render us sickly and infertile in just a few generations? And how can it be that ingenious mobile computing technology has turned our children into zombies who are constantly twiddling their smartphones as they sleepwalk through life? It s hard to think about any of this without taking some happy pills; and how can it be that taking those happy pills has… you get the idea.

The unintended consequence of negative interest rates is that they destroy money. This is true in an entirely trivial sense: if you deposit x dollars at -p% annual, then a year later you will only have x(1-p) dollars because xp dollars has been destroyed. (In case you prefer to count on your fingers and toes, if you deposit $10 at -10% annual, then a year later you will only have $9 because $1 has been destroyed.) But what I mean is something slightly more profound: negative interest rates erode the very concept of money. To get at the reason for this, we have to ask a slightly more profound question: What is money? I think that money is the cult of the god Mammon.

Read more …

“Despite its intention to process all cases, Greece lacks the manpower to deal with the volume of applications. It says it needs more help from EU institutions. As many as 6,656 people applied for asylum in March and April this year, up from 1,899 in those months last year. Even if it could hire more people, they would need to be highly qualified legal experts, government officials say.”

In Greek Refugee Camps, Wait For Asylum Fuels Unrest (R.)

Tents were set on fire, punches were thrown, children cried through the night and families were forced to flee the burning detention camp and sleep in open fields. The tension is palpable on Greece’s islands, where about 8,000 asylum seekers feel stranded by a European Union deal with Turkey to stem the arrival of refugees and other migrants on European shores from Syria, Iraq, Afghanistan and beyond. The deal, hailed a success by its European architects, prevents migrants from going beyond Greece – or even its islands – in their search for a new home in Europe, until their asylum claims are processed and those rejected are sent back to Turkey, from where they arrived. But some European officials say the assessment has been slow, and the wait long for those confined to often overcrowded camps.

In June, the most violent month yet, dozens were injured in clashes on three islands, police said. Videos in Greek media showed clouds of smoke rising over the centers on three occasions. In clashes on Lesvos the night of June 1-2, families with young children had to flee and spend the night in nearby fields or Mytilene town, several kilometers away, Amnesty International said. Many returned to burned down tents and destroyed belongings. Women told Amnesty they “live in constant fear” in camps where fights break out in food queues. Journalists are barred from entering the camps on the islands. But humanitarian organizations and police officials on the ground speak of people on edge. “They’re reacting. They want to leave the islands,” said a police official for the northern Aegean region which includes the islands of Lesvos, Samos and Chios where rival migrant groups brawled. “We’re bracing for all eventualities.”

Read more …

We will never know how many people drown unnoticed. If a tree falls in a forest…

3,000 Migrants Rescued Off Italian Coast; Two Bodies Found (R.)

More than 3,000 boat migrants have been rescued in the Mediterranean over the past two days and two bodies have been recovered, Italy’s coastguard said on Thursday. The coastguard coordinated rescues of migrants from 15 different boats on Thursday, bringing 1,950 people to safety. Two bodies were recovered from a rubber boat. Some 1,100 migrants were rescued at sea on Wednesday. The coastguard had no details about the nationalities of the migrants, nor about the two deaths.

All the rescues took place between Italy and Libya, where people-smugglers operate with impunity amid the chaos of civil war. Britain’s HMS Enterprise and Germany’s FGS Frankfurt, patrolling the area as part of the European Union’s anti-people-smuggling operation, together rescued migrants from seven boats, a coastguard spokesman said. A Doctors without Borders vessel, the Dignity 1, rescued almost 500 from four boats, while the Phoenix, run by humanitarian group Migrant Offshore Aid Station, took 243 people from two boats.

Read more …

Jun 142015
 
 June 14, 2015  Posted by at 7:09 pm Finance Tagged with: , , , , , , , , , ,  


Milton Greene “Actress Marilyn Monroe in bed” 1955

Through the last decades, as we have been getting ever more occupied trying to be what society tells us is defined as successful, we all missed out on a lot of changes in our world. Or perhaps we should be gentle to ourselves and say we’re simply slow to catch up.

Which is somewhat curious since we’ve also been getting bombarded with fast increasing amounts of what we’re told is information, so you’d think it might have become easier to keep up. It was not.

While we were busy being busy we for instance were largely oblivious to the fact the US is no longer a beneficial force in the world, and that it doesn’t spread democracy or freedom. Now you may argue to what extent that has ever been true, and you should, but the perception was arguably much closer to the truth 70 years ago, at the end of WWII, then it is today.

Another change we really can’t get our heads around is how the media have turned from a source of information to a source of – pre-fabricated – narratives. We’ll all say to some extent or another that we know our press feeds us propaganda, but, again arguably, few of us are capable of pinpointing to what extent that is true. Perhaps no big surprise given the overdose of what passes for information, but duly noted.

So far so good, you’re not as smart as you think. Bummer. But still an easy one to deny in the private space of your own head. If you get undressed and stand in front of the mirror, though, maybe not as easy.

What ails us is, I was going to say perfectly human, but let’s stick with just human, and leave perfection alone. What makes us human is that it feels good to be protected, safe, and prosperous. Protected from evil and from hard times, by a military force, by a monetary fund, by a monetary union. It feels so good in fact that we don’t notice when what’s supposed to keep us safe turns against us.

But it is what happens, time and again, and, once again arguably, ever more so. What we think the world looks like is increasingly shaped by fiction. Perhaps that means we live in dreamtime. Or nightmare time. Whatever you call it, it’s not real. Pinching yourself is not going to help. Reading Orwell might.

The Sunday Times ran a story today -which the entire world press parroted quasi verbatim- that claimed MI6 had felt compelled to call back some of its operatives from the ‘field’ because Russia and China had allegedly hacked into the encrypted files Edward Snowden allegedly carried with him to Russia (something Snowden denied on multiple occasions).

Glenn Greenwald’s take down of the whole thing is – for good reasons- far better than I could provide, and it’s blistering, it leaves not a single shred of the article. Problem is, the die’s been cast, and many more people read the Times and all the media who’ve reprinted its fiction, than do read Greenwald:

The Sunday Times’ Snowden Story Is Journalism At Its Worst

Western journalists claim that the big lesson they learned from their key role in selling the Iraq War to the public is that it’s hideous, corrupt and often dangerous journalism to give anonymity to government officials to let them propagandize the public, then uncritically accept those anonymously voiced claims as Truth. But they’ve learned no such lesson. That tactic continues to be the staple of how major US and British media outlets “report,” especially in the national security area. And journalists who read such reports continue to treat self-serving decrees by unnamed, unseen officials – laundered through their media – as gospel, no matter how dubious are the claims or factually false is the reporting.

We now have one of the purest examples of this dynamic. Last night, the Murdoch-owned Sunday Times published their lead front-page Sunday article, headlined “British Spies Betrayed to Russians and Chinese.” Just as the conventional media narrative was shifting to pro-Snowden sentiment in the wake of a key court ruling and a new surveillance law, the article claims in the first paragraph that these two adversaries “have cracked the top-secret cache of files stolen by the fugitive US whistleblower Edward Snowden, forcing MI6 to pull agents out of live operations in hostile countries, according to senior officials in Downing Street, the Home Office and the security services.”

Please read Greenwald’s piece. It’s excellent. Turns out the Times made it all up. At the same time, it’s just one example of something much more expansive: the entire world view of the vast majority of Americans and Europeans, and that means you too, is weaved together from a smorgasbord of made-up stories, narratives concocted to make you see what someone else wants you to see.

Last week, the Pew Research Center did a survey that was centered around the question what ‘we’ should do if a NATO ally were attacked by Russia. How Pew dare hold such a survey is for most people not even a valid question anymore, since the Putin as bogeyman tale, after a year and change, has taken root in 99% of western brains.

And so the Pew question, devoid of reality as it may be, appears more legit than the question about why the question is asked in the first place. NATO didn’t really like the results of the survey, but enough to thump some more chests. Here’s from an otherwise wholly forgettable NY Times piece:

Poles were most alarmed by Moscow’s muscle flexing, with 70% saying that Russia was a major military threat. Germany, a critical American ally in the effort to forge a Ukraine peace settlement, was at the other end of the spectrum. Only 38% of Germans said that Russia was a danger to neighboring countries aside from Ukraine, and only 29% blamed Russia for the violence in Ukraine. Consequently, 58% of Germans do not believe that their country should use force to defend another NATO ally. Just 19% of Germans say NATO weapons should be sent to the Ukrainian government to help it better contend with Russian and separatist attacks.

Do we need to repeat that Russia didn’t attack Ukraine? That if after all this time there is still zero proof for that, perhaps it’s time to let go of that idea?

Over the past week, there have been numerous reports of NATO ‘strengthening’ its presence in Eastern Europe and the Baltics. Supposedly to deter Russian aggression in the region. For which there is no evidence. But if you ask people if NATO should act if one of its allies were attacked, you put the idea in people’s heads that such an attack is a real risk. And that’s the whole idea.

This crazy piece from the Guardian provides a very good example of how the mood is manipulated:

US And Poland In Talks Over Weapons Deployment In Eastern Europe

The US and Poland are discussing the deployment of American heavy weapons in eastern Europe in response to Russian expansionism and sabre-rattling in the region in what represents a radical break with post-cold war military planning. The Polish defence ministry said on Sunday that Washington and Warsaw were in negotiations about the permanent stationing of US battle tanks and other heavy weaponry in Poland and other countries in the region as part of NATO’s plans to develop rapid deployment “Spearhead” forces aimed at deterring Kremlin attempts to destabilise former Soviet bloc countries now entrenched inside NATO and the EU.

Warsaw said that a decision whether to station heavy US equipment at warehouses in Poland would be taken soon. NATO’s former supreme commander in Europe, American admiral James Stavridis, said the decision marked “a very meaningful policy shift”, amid eastern European complaints that western Europe and the US were lukewarm about security guarantees for countries on the frontline with Russia following Vladimir Putin’s seizure of parts of Ukraine. “It provides a reasonable level of reassurance to jittery allies, although nothing is as good as troops stationed full time on the ground, of course,” the retired admiral told the New York Times.

NATO has been accused of complacency in recent years. The Russian president’s surprise attacks on Ukraine have shocked western military planners into action. An alliance summit in Wales last year agreed quick deployments of NATO forces in Poland and the Baltic states. German mechanised infantry crossed into Poland at the weekend after thousands of NATO forces inaugurated exercises as part of the new buildup in the east. Wary of antagonising Moscow’s fears of western “encirclement” and feeding its well-oiled propaganda effort, which regularly asserts that NATO agreed at the end of the cold war not to station forces in the former Warsaw Pact countries, NATO has declined to establish permanent bases in the east.

It’s downright borderline criminally tragic that NATO claims it’s building up its presence in the region as a response to Russian actions. What actions? Nothing was going on until ‘we’ supported a coup in Kiev, installed a puppet government and let them wage war on their own citizens. That war killed a lot of people. And if Kiev has any say in the matter, it ain’t over by a long shot. Poroshenko and Yats still want it all back. So does NATO.

When signing a post-cold war strategic cooperation pact with Russia in 1997, Nato pledged not to station ground forces permanently in eastern Europe “in the current and foreseeable security environment”. But that environment has been transformed by Putin’s decision to invade and annex parts of Ukraine and the 1997 agreement is now seen as obsolete.

Meanwhile, Russia re-took Crimea without a single shot being fired. But that is still what the western press calls aggression. Russia doesn’t even deem to respond to ‘our’ innuendo, they feel there’s nothing to be gained from that because ‘our’ stories have been pre-cooked and pre-chewed anyway. Something that we are going to greatly regret.

There are all these alphabet soup organizations that were once set up with, one last time, arguably, good intentions, and that now invent narratives because A) they can and B) they need a reason to continue to exist. That is true for NATO, which should have been dismantled 25 years ago.

It’s true for the IMF, which was always only a tool for US domination. It’s true for the CIA and FBI, which might keep you safe if that was their intent, but which really only function to keep themselves and their narrow group of paymasters safe.

It’s also true for political unions, like the US and EU. Let’s leave the former alone for now, though much could be said and written about the gaping distance between what the Founding Fathers once envisioned for the nation and what it has since descended into.

Still, that is a story for another day. When we can find our way through the web of narratives that holds it upright. Like the threat from Russia, the threat from China, the threat from all the factions in the Middle East the US itself (helped) set up.

The EU is much younger, though its bureaucrats seem eager to catch up with America in fictitious web weaving. We humans stink at anything supra-national. We can have our societies cooperate, but as soon as we invent ‘greater’ units to incorporate that cooperation, things run off the rails, the wrong people grab power, and the weaker among us get sacrificed. And that is what’s happening once again, entirely predictably, in Greece.

That Spain’s two largest cities, Barcelona and Madrid, have now sworn in far-left female mayors this week will only serve to make things harder for Athens. Brussels is under siege, and it will defend its territory as ‘best’ it can.

What might influence matters, and not a little bit, is that Syriza’s Audit Commission is poised to make public its findings on June 18, and that they yesterday revealed they have in their possession a 2010 IMF document that allegedly proves that the Fund knew back then, before the first bail-out, that the Memorandum would result in an increase in Greek debt.

That’s potentially incendiary information, because the Memorandum -and the bailout- were aimed specifically at decreasing the debt. That -again, allegedly- none of the EU nations have seen the document at the time -let’s see how the spin machine makes that look- doesn’t exactly make it any more acceptable.

Nor of course does the fact that Greece’s debt could and should have been restructured, according to the IMF’s own people and ‘standards’, but wasn’t until 2012, when the main European banks had been bailed out with what was subsequently shoved onto the shoulders of the Greek population, and had withdrawn their ‘assets’ from the country, a move that made Greece’s position that much harder.

The narrative being sold through the media in other eurozone nations is that Greece is to blame, that for instance German taxpayers are on the hook for Greek debts, while they’re really on the hook for German banks’ losing wagers (here’s looking at you, Deutsche!). And that is, no matter how you twist it, not the same story. It’s again just a narrative.

Once more, and we’ve said it many times before, Brussels is toxic -and so is the IMF- and Greece should leave as soon as possible, as should Italy, Spain, Portugal. And we should all resist the spin-induced attempts to demonize Putin, Athens and China any further, and instead focus on the rotten apples in our own basket(s).

In short, the propaganda we should be worried about is not Russia’s, it’s our own. And it comes from just about every news article we’re fed. We’re much less than six degrees removed from Orwell.