Feb 212018
 
 February 21, 2018  Posted by at 8:06 pm Finance Tagged with: , , , , , , , , , , , ,  


J.J. Grandville ‘A Comet’s Journey’, Illustration from ‘Un Autre Monde’ 1844

 

Oxfam. I’m wondering if I should warn this is not for the faint of heart, or say don’t read on an empty stomach. If so, hereby. I know I found it hard.

The first and foremost thing the BBC last week felt its audience should know about the sleaziest scandal to come out of Britain in quite some time -and that’s saying something- is that an actress had turned her back on the aid organization. Your news in bite-size pre-chewed headlines.

While a guy who ‘served’ Oxfam in Bosnia claims it’s nobody’s business if he visited the local hookers in his spare time. The head office even specifically refuses to ban staff from doing that. Not violating a staff member’s civil liberties trumps a question like what drives desperate women -girls- into prostitution that same staff member pays for with money donated to aid desperate people.

Someone at the Dutch Oxfam/Novib office complained that his British colleagues should have provided more information, sooner, because now his branch suffers from the scandal (fewer donations). A branch that knew about it at least as far back as 2012, and passed on the info to the Dutch Foreign Ministry and Accounting Office. Who looked at potential -financial- damage in their country, found none, and located a carpet to sweep it under.

The only right choice for us, and our governments, would seem to be to cancel all donations to Oxfam, because apparently nobody connected to the organization is able to figure out who the actual victims are here. They instead portray themselves as the victims.

Of all people, its own chief executive feels a need, when responding to accusations of child sex abuse concerning his organization, to paint himself -and Oxfam- as victims. ‘Anything we say is being manipulated. We’ve been savaged’ . How does that guy hold on to that job?

Charities like Oxfam receive donations to help those people who have fallen victim to the conditions that exist where they live, be they manmade or due to natural disaster. Obviously, if Oxfam cannot (will not) even correctly identify these victims, it has no reason to exist.

Of course Oxfam announces more internal investigations when these accusations come out, but it’s too late. They’ve hush-hushed all previous such investigations, and there’s no reason to believe that won’t happen again. Oxfam has covered up the issues for a long time, likely decades, and if they can no longer cover things up -like now-, they try and make things look like incidents, stand-alone occurrences. This is a pattern.

 

Of course there are many people involved in international aid who are pure -enough- souls with the best intentions, but that’s simply not enough: sexual predation has infiltrated its ranks to such a degree, and management has refused to take the only appropriate steps against its perpetrators for so long, that sex abuse has become Oxfam’s middle name. And that very much includes child sex abuse.

I’ve been reading a lot about the story over the past 10 days, and one of the things that stand out is that the typical first reaction is to cover up whatever nastiness it is that surfaces, out of fear that donations would suffer. Instead of thinking about the people Oxfam is supposed to help, for which it receives those donations, and put their interests first. That is a death sentence for any aid organization. And rightly so.

It’s quite simple when you think about it: if we allow Oxfam to continue to exist, we accept that the aid we pay for through donations is sold to victims for sex. If you say, as many people do, that shutting down Oxfam will ‘only’ be bad for those in need who rely on it for aid, then that’s what you promote: aid for sex.

Through the many articles I’ve read I’ve seen people finger Oxfam for sex abuse in Haiti, Chad, South Sudan, Ivory Coast, the Philippines, Bangladesh and Nepal. Ten to one that is but a partial list. Other aid organizations cover even more territory. There are specific accusations, just through these articles, from 1999, 2004, 2012, 2015 and 2017. That too is but a partial list.

 

Let’s see if I can make a coherent story of all this without turning it into an entire book (would not be a problem). Here’s from The Independent, with a headline that takes us right where we need to be:

 

Oxfam Told Of Aid Workers Raping Children In Haiti A Decade Ago

Aid agencies including Oxfam were warned that aid workers were sexually abusing children in Haiti a decade ago, The Independent can reveal. Children as young as six were being coerced into sex in exchange for food and necessities, according to a damning report by Save the Children, which called for urgent action including the creation of a global watchdog. Its research exposed abuse linked to 23 humanitarian, peacekeeping and security organisations operating in Haiti, Ivory Coast and what was then Southern Sudan. “Our own fieldwork suggests that the scale of abuse is significant,” the report concluded.

“Every agency is at risk from this problem … existing efforts to keep children safe from sexual exploitation and abuse are inadequate.” It identified “every kind of child sexual abuse and exploitation imaginable”, including rape, prostitution, pornography, sexual slavery, assaults and trafficking. One 15-year-old girl in Haiti told how “humanitarian men” exposed themselves and offered her the equivalent of £2 to perform a sex act. “The men call to me in the streets and they ask me to go with them,” said another Haitian girl. “They do this will all of us young girls.”

A six-year-old girl described being sexually assaulted and a homeless girl was given a single US dollar by a “man who works for an NGO” before being raped and severely injured, while boys were also reportedly raped. When asked why the abuse was not reported, children said they feared losing aid, did not trust local authorities, did not know who to go to, felt powerless or feared stigma and retaliation. “The people who are raping us and the people in the office are the same people,” said one girl in Haiti.

Ironically, that report is from Save the Children. Ironic because just today the Telegraph had this:

The former chief executive of Save the Children resigned after he admitted making “unsuitable and thoughtless” comments to three young female members of staff, it emerged on Tuesday. Justin Forsyth, who is now deputy executive director at Unicef, “apologised unreservedly” to the women after sending them text messages commenting on how they looked and what they were wearing. Mr Forsyth’s resignation from Save the Children came just four months after Brendan Cox, a friend of Mr Forsyth and former chief strategist at the charity, quit following separate allegations of sexual misconduct.

Mr Forsyth and Mr Cox worked together at Oxfam and later again as advisors to Gordon Brown in Downing Street. Mr Cox, the widower of the late Jo Cox who was murdered in 2016, admitted at the weekend that he had caused the women “hurt and offence”. Neither Mr Forsyth nor Mr Cox were subject to a formal disciplinary hearing. Save the Children said on Tuesday night that trustees had carried out two internal investigations into the complaints against Mr Forsyth in 2011 and 2015.

Save the Children admitted on Tuesday that it dealt with 193 child protection and 35 sexual harassment cases last year, which led to 30 dismissals.

It’s by no means just Oxfam. But they’re a major player. In more ways than one, unfortunately. Oxfam has some 2,500 staff and 31,000 volunteers through the world. Its annual budget is about half a billion dollars.

Another ‘interesting’ pattern to emerge is that the perpetrators, even if they are penalized, seemingly seamlessly float between aid organizations: get kicked out in one place, start afresh a few months later at the next. This article from IRIN is about the Belgian guy with whom the latest scandal surfaced.

He lived in a splendid $2000 a month Oxfam-sponsored villa in Haiti right after the 2010 earthquake, when most locals didn’t even have a roof over their heads, and threw sex-parties there. None of that hurt him much; he lost his Oxfam job, though only after many years of complaints, but just kept going (and denies just about all):

The man at the centre of a sexual exploitation scandal at aid agency Oxfam was dismissed by another British NGO seven years earlier for similar misconduct, IRIN has found. A former colleague reveals that Roland van Hauwermeiren was sent home from his job in Liberia in 2004 after her complaints prompted an investigation into sex parties there with young local women. Despite this, van Hauwermeiren was recruited by Oxfam in Chad less than two years later and went on to work for them in Haiti, and then in Bangladesh for Action contre la Faim.

The Swedish government’s aid department, alerted in 2008, also missed an opportunity to bring his behaviour to light and even went ahead that year to fund Oxfam’s Chad project, under his management, to the tune of almost $750,000. [..] Seeing the Times article about van Hauwermeiren, Swedish civil servant and former aid worker Amira Malik Miller was shaken to read about the Haiti case, which pertained to alleged parties and orgies in 2011, seven years after her own experiences of him in Liberia. She couldn’t believe he was still active in the aid world, especially after she had blown the whistle on him and his colleagues, not once but twice.

“Oh my God, he’s been doing this for 14 years,” she remembers thinking. “He just goes around the system… from Liberia to Chad, to Haiti, to Bangladesh. Someone should have checked properly,” she told IRIN. On two previous occasions, she thought she had done enough to stop his predatory behaviour. Malik Miller told IRIN how her initial complaints way back in 2004 led to van Hauwermeiren being pushed out of his job as Liberia country director of UK charity Merlin, a medical group now merged with Save the Children. An internal investigation into sexual exploitation and misconduct led to his departure, several Merlin staff members confirmed.

And that was just for warming up. An interesting voice in the whole narrative is that of Australian professor Andrew MacLeod, who worked with the Red Cross in Bosnia and the UN Emergency Co-ordination Centre in Pakistan. From the Times:

 

UN Staff Responsible For 60,000 Rapes In A Decade

Andrew MacLeod, who was chief of operations at the UN’s Emergency Co-ordination Centre, said that “predatory” abusers used development jobs to get to vulnerable women and children. He estimated that 60,000 rapes had been carried out by UN staff in the past decade, with 3,300 paedophiles working in the organisation and its agencies. “There are tens of thousands of aid workers around the world with paedophile tendencies, but if you wear a Unicef T-shirt nobody will ask what you’re up to,” he told The Sun. “You have the impunity to do whatever you want. It is endemic across the aid industry across the world.”

More Andrew McLeod, via the Daily Mail:

I was first alerted to it in 1996 while working in former Yugoslavia with the International Committee of the Red Cross. People would talk about a nightclub called Florida 2000, in the Bosnian city of Zenica, where girls of 14 and 15 were working as prostitutes. These children were being trafficked into Bosnia from neighbouring Moldova by individuals working for the UN and Bosnian police. They were used exclusively for the sexual gratification of UN staff. Such lurid rumours seemed difficult to credit at first, but when a UN peacekeeper called Kathryn Bolkovac tried to investigate, she was swiftly demoted and then fired. Her story was turned into a film, Whistleblower, in 2010, starring Rachel Weisz.

There is so much opportunity for abuse and so little to stop it that jobs in international aid actively attract sexual predators who benefit from the artificial power the aid industry confers upon them. [..] Senior figures in the UN and some of our best known charities have known for decades that this problem was rampant. They should have put in place systems for training, prevention, protection and prosecution. By failing to do so they were committing an offence. They were party to child sex crime. They did nothing, and they should face charges. If they’re not worried – they should be.

From the same article:

A middle-aged man who persistently hangs around the gates of a British primary school as children are leaving will attract the wary attention of teachers, parents and, pretty soon, the police. But the same man lurking outside a school in the Democratic Republic of Congo, for example, will be quite safe. Especially if he is wearing a T-shirt bearing the logo of Unicef, Save the Children, Oxfam or any other internationally-renowed aid organisations. Almost 20 years ago, the UK’s National Criminal Intelligence Service, warned that due to better policing and safe-guarding strategies and an international crackdown on child sex tourism, predatory paedophiles were turning their attention to the developing world.

And the best way of gaining access to children? Work for a children’s charity in some place where paedophilia is ignored or difficult to police. Everyone working in the international aid industry needs to be aware of the scale of sexual abuse – happening on their watch and often involving their personnel – of vulnerable people, especially children. Those who deny it are either lying through their teeth, or have their heads buried so far in the sand that their ignorance is deliberate.

And if you think government investigations would solve anything, here’s how Britain’s Charity Commission deals with things:

The Charity Commission has been forced to defend its own investigations after Oxfam’s former head of safeguarding claimed she told the watchdog women were being coerced into sex for aid. Helen Evans said she was “extremely concerned” by the response to concerns she raised while heading the charity’s global efforts to protect staff and beneficiaries from 2012 to 2015.

While appealing for more resources from management to deal with a rising number of allegations, Ms Evans told how in a single day she was told of a woman being coerced into sex in exchange for aid, another aid worker having sex with a beneficiary and a member of staff being struck off for abuse. “There has been a lot of coverage about Oxfam and how shocking and surprising this is – it isn’t,” she told Channel 4 News.

“I went in 2015 to the Charity Commission, I went back again in 2017. Everything I’m saying today, the Charity Commission knew, so why is the Government saying this is a surprise?” Ms Evans had emailed Oxfam’s chief executive, Mark Goldring, warning that data being gathered from staff “increasingly points to a culture of sexual abuse within some Oxfam officers” but a face-to-face meeting was cancelled in 2014.

So far we’ve encountered Oxfam, Save the Children, Doctors without Borders (MSF) and the UN (including its children’s fund Unicef). But that’s by no means the whole story. Try this on for size from Agence France Presse:

Oxfam is not the first non-governmental organisation to be accused of abuse. Previous revelations spurred the United Nations in 2002 to issue special measures for all its staff and others, including aid workers under UN contract, based on a policy of zero tolerance. The issue came to public attention in 2002 after allegations of widespread abuse of refugee and internally displaced women and children by humanitarian workers and peacekeepers in West Africa.

In refugee camps in Guinea, Liberia, and to a lesser extent Sierra Leone, dozens of male aid workers, often locals, were suspected of having exchanged money or gifts for sex with young refugee girls aged between 13 and 18. “It’s difficult to escape the trap of those (NGO) people, they use the food as bait to get you to have sex with them,” an adolescent in Liberia was quoted as saying in a report from the UN refugee agency. More than 40 agencies and organisations and nearly 70 individuals were mentioned in the testimonies taken from 1,500 children and adults for the UN report [..]

It’s everywhere, the pedophile rot. And the cover-ups, the industry approach, the aid as big business. And that can only lead to ever more misery. Because aid should never become an industry.

I touched on that about a year ago in one of many articles on our efforts for refugees and homeless in Greece. When it comes to scrutiny of aid organizations, you shouldn’t expect much if anything from governments. They’re part of the same industry.

Politicians find it much easier to fork over their constituents’ cash to ‘recognized’ aid organizations than to investigate them. They have a vested interest in letting the system roll on without disturbing it.

 

The Automatic Earth Still Helps Greeks and Refugees

[..] NGOs, as I’ve written before, have become an industry in their own right, institutionalized even. As someone phrased it: we now have a humanitarian-industrial complex. Which in Greece has received hundreds of millions of euros and somehow can’t manage to take proper care of 60,000 desolate souls with that.

I’ve even been warned that if I speak out too clearly about this, they may come after Konstantinos and his people and make their work hard and/or impossible. This is after all an industry that is worth a lot of money. Aid is big business. And big business protects itself.

Still, if we’re genuinely interested in finding out how and why it is possible that hundreds of millions of taxpayer euros change hands, and people still die in the cold and live in subhuman conditions, we’re going to have to break through some of the barriers that the EU, Greece and the iNGOs have built around themselves.

If only because European -and also American- taxpayers have a right to know what has made this ongoing epic failure possible. And of course the first concern should be that the refugees have the right, encapsulated in international law, to decent and humane treatment, and are not getting anything even remotely resembling it. Refugees Deeply quotes ‘a senior aid official’ (they don’t say from what) anonymously saying that €70 out of every €100 in aid is wasted.

But the Oxfam scandal, spreading as it is across the entire aid’ industry’, is many times worse than letting refugees freeze on islands. Or is it? Isn’t it perhaps the exact same thing, that changes appearance between places but remains always the same in essence?

Oxfam must go. It’s been found painfully wanting for too long and on too many occasions. It’ll be a useful deterrent for all other groups. The managers of which, who often make hundreds of thousands of dollars if not more, must also go. They’ve all either known or should have known for many years. The buck stops with them.

The aid itself may stop too in some places, at some times, but when you can only hand out aid when you’re ready to accept that it will be traded for sex with often underaged children, you’re losing big time, and you’re never going to turn that around. Institutionalization can only be halted when walls are broken down, up to and including their foundations.

 

The aid organizations that cause all these problems have one thing in common: they’re large, large enough to become like, look like, industries. The ones that have expensive offices in A locations because that’s where their major donors are, and executives who make salaries like the executives at those donors.

That’s simply the wrong scale. In all the countries where these organizations operate, and where they bring their depraved sex-crazed staff, there are other, smaller, local organizations too. Who most often don’t have anything like those issues, who often exhibit the exact opposite behavior: people helping people without looking for anything in return. I know this from my experiences in Greece since 2015.

It’s when you scale up the humanity that exists in many, if not most, people, that things go awry and the vermin creeps in. When things become so large that managers are hired, you can be sure that most of the money donated for aid will be burned in a bonfire of politicians, businessmen and, as we now know, pedophiles.

Oxfam gets $500 million a year or so. The EU has pumped over €1 billion into Greece, and probably as much into Italy as well, to ‘solve’ the refugee situation. That Brussels doesn’t want to solve, and neither do Athens or Rome, for fear that it will encourage more refugees to come.

So they make the people they purport to help, miserable, and they put a huge price sticker on that misery posing as help, for the taxpayer to pay. Like this, for instance -from my same article above:

 

[..] every refugee who, before the EU-Turkey deal, passed through Greece on his/her way to Europe, cost the EU €800. For a family of 5 that adds up to €4,000, which would have been more than enough to pay for transport, stay at decent hotels and eat in normal restaurants for the duration of their trip (7-10 days). Suffice it to say, that was not what they got.

After the EU-Turkey deal made it impossible for refugees to leave Greece, €15,000 has been spent per capita. That is €75,000 per family of 5, more than enough to rent a villa on the beach, hire a butler and eat gourmet food for 8 months. Instead, the refugees are stuck in old abandoned factories with no facilities, in old tents in the freezing cold and in the rain, and forced to eat a dirt poor version of rice with chickpeas and lentil soup.

It won’t be easy to stop this insanity, but it can be done. Refuse to dole out money to organizations that have been accused of abuse. Refuse to give any organization more than $1 million. Support many small organizations insteads. Humanitarian aid does not scale up well. To say the least.

It’ll be cost-effective as well. It’ll take more effort to locate the right people, but given that $70 out of every $100 in donations is wasted by large aid organizations today, there’s a huge win lurking right there. You just need to find people who are better at all this than the ones who made that disaster possible.

Then, fire any manager who has not acted in the past on complaints. Establish a system that promises to put anyone in jail against whom credible complaints have been filed.

There are thousands of those walking around right now working for organizations funded by you and me directly, and by our taxes too, free to abuse another girl or little boy, and then another one tomorrow, or a mother who needs to feed her child(ren) because her home has been swept away by floods or bombs.

And make this the number one issue for the UN (yeah, I know, that same UN), to discuss and control as per tomorrow morning. Get multiple countries’ military to deliver what Oxfam did before, and make sure all soldiers understand what’ll happen to them at the first sign of abuse, of money, of people, anything at all.

There are many things out there that we can’t control, but this one we can. Because, as I said, in all locations where aid is needed, there are local people available to deliver it without trying to abuse, centralize, institutionalize it, profit from it, or turn it into a business. Just keep aid donations so small it’s not interesting to do any of those things.

At the UN level, I’m thinking Jimmy Carter. He’s the only man I can conjure up who has the integrity to clean up this mess. I know, one is a very small number. But Carter will know others. Big job, but doable. After all, we can’t very well have the worst of our own societies run rampant in places where people are defenseless against them.

Oh wait, that right there is another reason why our governments like the way things are going, just fine, isn’t it? Oxfam allows them (us) to export their perverts.

Well, screw that. We’re better than our governments.

To summarize: right now, your donation to Oxfam literally pays for pedophiles to go rape children across the world. Not every penny or dollar (they need their shiny offices too), but that’s not the point: your dollars keep the aid industry, the system, and therefore the opportunity for the abuse going. Is that what you want?

 

 

Feb 122018
 
 February 12, 2018  Posted by at 10:46 am Finance Tagged with: , , , , , , , , , , ,  


Camille Corot The Burning of Sodom (formerly “The Destruction of Sodom”) 1843 and 1857

 

Rising Debt + Rising Rates (Northman)
Last Week’s ‘Volocaust’ “Just An Appetizer” – Cole (ZH)
Why People Who Make Money Are Usually Wrong – Taleb (ZH)
‘Big Shakeout Coming’: Bridgewater Sounds Warning (G.)
History Suggests The Correction Isn’t Nearly Over (MW)
Interest Rate Rise Would Hit Millions In UK Who Depend On Cheap Credit (G.)
May Starts Drive to End the Conservative Civil War Over Brexit (BBG)
China Enters The Graveyard Of Empires (Escobar)
China Pledges ‘Employment First’ Policies To Create Millions Of Jobs (R.)
Party On, Dudes (Jim Kunstler)
Oxfam Faces Losing Funding As Crisis Grows Over Abuse Claims (G.)
Oxfam Reels From Prostitution Scandal (G.)
The UK’s Hidden Role In Assange’s Detention (Cook)

 

 

Ultra low rates but ultra high payments.

Rising Debt + Rising Rates (Northman)

“Interest On The Debt Will Be The Fastest Growing Part Of The Federal Budget…By Far. Forget Medicare, Social Security and the Pentagon: $1 trillion-plus deficits means massive increases in the national debt and that debt will have to be borrowed at higher interest rates. Add the need for the Treasury to roll-over existing debt at higher and higher rates and you get an immediate increase in the amount the U.S. will need to spend on interest each year.” Watch this space:

Some people may argue that tax cuts will bring in so much economic growth it will all pay for itself. There is precisely zero evidence for such an assertion:

If you know your tax cut history you know where in the chart above major tax cuts were passed. The debt continued to rise and will continue to rise as spending continues to be expanded. But here’s the kicker: Never in modern times have we seen tax cuts being implemented and spending increased with debt to GDP north of 100%:

Many corporations are drowning in debt, as are consumers, and so are their interest payments:

People invariably argue and say: Yea well, but as a percent of disposable income it’s not so bad. Yes, it’s called artificial low rates, they can mask a lot, but what is currently the situation is not the point, it’s sustainability of debt loads in the very immediate future. As you saw in the above data we are already seeing a vast increase in interest payments despite rates having barely moved off of the historic zero bound line. “As for total debt, the CBO last predicted borrowings of $25.5 trillion by 2027. According to Riedl, the tax cuts, new discretionary outlays and additional interest on the extra spending could add $5 trillion to that number, bringing the total of $30 trillion. That’s 107% of the national income estimate projected by the CBO.

The scariest unknown is what happens to interest expense. At $25.5 trillion, the CBO forecasts outlays for interest of $818 billion in 2027. Going to $30 trillion will raise the load to over $1 trillion. One dollar in seven in spending would be going to interest, versus one in 15 today. And that scenario assumes that the yield on the 10-year Treasury increases to just 3.5% over the next decade, far below its historic average. “If rates go to their average in the 1990s,” warns Riedl, “the deficit will go not to $2 trillion, but to between $2.5 and $3 trillion.”

Read more …

“..the VIX ETPs are only 5 billion dollars. You have 1.5 trillion of implicit short-volatility strategies..”

Last Week’s ‘Volocaust’ “Just An Appetizer” – Cole (ZH)

While Cole is happy to accept the back-patting and congratulations for having foretold in near-perfect detail the dynamics that would drive this week’s volatility explosion, those who read our piece summarizing Cole’s (uncannily well-timed) interview two weeks ago will remember that short-vol ETPs like XIV represent only a fraction of the collective $2 trillion short-gamma position that touches nearly every corner of the market. Other components of what calls the ‘implicit’ gamma short – which we’ve touched on this week – include $600 billion invested in risk-parity strategies, $400 billion in volatility-control funds. And $250 billion of risk premium strategies… Rather than buy the dip, Cole ominously warned that it’s more likely this is the beginning of a much larger selloff. Or, as Kevin Spacey’s character put it in the movie “Margin Call”, because of vulnerabilities related to the market’s massively short gamma positioning, “there will be turmoil in the markets for the foreseeable future.”

Everyone talks – congratulations about calling this. Well, I don’t think what I’ve really talked about has come to pass yet. The VIX ETPs are the smallest portion of the global short-vol trade. Talk about this idea of about 1.5 to 2 trillion dollars’ worth of short-vol exposure, both explicit and implicit. Explicit short volatility are VIX exchange-rated products and vol overwriting funds. You know, the VIX ETPs are only 5 billion dollars. You have 1.5 trillion of implicit short-volatility strategies, strategies that may not be directly shorting options, but use financial engineering to mimic the components of a short-option portfolio. About 1.5 trillion dollars’ worth of these, of exposure, this is what we’re seeing come online now.

This is the real risk. So stocks and bonds sell off together. You have disorderly unwind withdrawal of liquidity. And then, all of a sudden, increasing volatility results in a quick deleveraging of these implicit short-volatility strategies. And this will drive the next leg of the crisis. So, people say congratulations, you called the short-vol trade. No, nothing has happened yet. This is an appetizer. This is just the appetizer for the unwind that is about to come. I think this is what people should be really afraid of, and I think this is the next leg of this that we will see. Whether this happens in two weeks or whether this happens over two years, I don’t know. But I strongly believe this will come to pass. And it will be quite disorderly and ugly.

Read more …

Practice and theory.

Why People Who Make Money Are Usually Wrong – Taleb (ZH)

Echoing Mark Spitznagel’s insights into how ‘naiveté’ led to the epic losses experienced by many ‘nickel-picker-uppers’ this week in the short-vol game, Nassim Taleb takes to YouTube to provide some more color on the fallacy of forecasting and what destroyed XIV traders. Taleb begins by noting that “many people attempted to profit by forecasting volatility [would drop] and from the fact that the contract [in this case XIV] was poorly constructed… they were right, until they were destroyed.” Academics cannot get the idea that you don’t have to be right about the world to make money.

“Antifragile explains why understanding x is different from f(x) the payoff or exposure from x. Most of the harm/gains come from f(x) being convex or concave, not from understanding x. Forecasting is off an average, and average is for academics and other morons.” As Valuewalk’s Jacob Wolinsky writes, this video illustrates the point with XIV that went bust while being correct about volatility –and why people who make money are usually wrong.

Read more …

Has Pandora’s box been opened?

‘Big Shakeout Coming’: Bridgewater Sounds Warning (G.)

Financial markets are braced for more volatility this week amid predictions from the world’s biggest hedge fund that a “big shakeout” is coming. The Australian stock market was the first to test the water on Monday morning and one point was down 0.7%. But it rallied slightly in afternoon trade to close down 0.3%. Bourses elsewhere in Asia Pacific also found calmer waters. South Korea’s Kospi was up 0.9% while Hong Kong put on 0.8%. The Nikkei in Japan was closed for a holiday. The FTSE100 is London is due to open up 1.25% according to futures trading, while the Dow Jones average on Wall Street is set to rise 0.7%. Last week saw $4tn wiped off the value of shares around the world and the US market entered into an official correction after falling more than 10% from its record level in January.

Wall Street staged a late rally on Friday as the Dow Jones finished 330 points higher and the closely watched Vix index, or “fear index”, has dropped four points to 29 on Monday from 33 on Friday. But Bob Prince, co-chief investment officer at the $160bn US hedge fund Bridgewater, told the Financial Times on Monday (paywall): “There had been a lot of complacency built up in markets over a long time, so we don’t think this shakeout will be over in a matter of days. “We’ll probably have a much bigger shakeout coming.” David Bassanese, the chief economist at BetaShares Capital in Sydney, said in a note on Sunday that despite the big falls last week, the selling could continue. “History suggests the depth of corrections – assuming the underlying bull market persists – don’t usually get beyond 15%, so there’s certainly some scope for market weakness before a bottom is reached,” he said.

Investors would be jittery about US inflation figures on Wednesday, he said. The market was forecasting a “fairly benign” 1.7% annual prices growth, but anything above that was likely to result in more stock losses. Chris Weston at online trader IG said on Monday: “A massive buildup in market leverage has been partially unwound in the blink of an eye and what started as systematic funds selling out of equity and futures positions, as implied volatility headed higher, has morphed into something far more broad-based incorporating many other market participants.”

Read more …

“..the median decline for the S&P in a correction is 16.4%, and the median length of a pullback is 64 days..”

History Suggests The Correction Isn’t Nearly Over (MW)

Perhaps the biggest question on Wall Street right now is whether the recent pain in the U.S. stock market is over. If history is any indication, the answer is no. Both the Dow Jones Industrial Average and the S&P 500 entered correction territory on Thursday, defined as a 10% drop from a recent peak—in this case, record highs that were hit in late January. According to Bespoke Investment Group, which analyzed the 95 corrections the S&P has seen since 1928, investors might want to brace themselves for more pain.

Per Bespoke’s data, the median decline for the S&P in a correction is 16.4%, and the median length of a pullback is 64 days. Were the S&P to hit that median in the current selloff, it would bottom around 2,400, or roughly 7.8% below current levels. “Keep in mind, though, that these are median levels. There have been a number of corrections (13) that saw declines of less than 11%, while several saw deeper declines of more than 20%,” the research group wrote in a blog post. A decline of 20% would put the index into bear-market territory, where nearly one-fifth of S&P components currently trade. “In terms of length, prior corrections have also been all over the map. Some have lasted as little as three days, while others have stretched on for well over a year.”

Read more …

It will hit millions everywhere.

Interest Rate Rise Would Hit Millions In UK Who Depend On Cheap Credit (G.)

The Bank of England’s warning that it plans to raise interest rates from as early as May will hit millions of low-income families who have only survived financially for a decade by using cheap credit. The Resolution Foundation said almost half of low-income families were in debt distress before Threadneedle Street said last week that it needed to increase the base rate at an accelerated pace over the next two years. The Bank governor, Mark Carney, said the strength of the economy warranted higher borrowing costs. He cited rising average wages and resilient GDP growth as reasons to begin pushing interest rates from the historically low level of 0.5%.

But a study by the foundation showed the proportion of households in some form of debt distress rose to 45% among the poorest fifth of working age households, with more than a third experiencing difficulty in paying for accommodation and one in six in arrears on either their mortgage or consumer debts. Households headed by someone aged 25-34 spent nearly £1 in every £5 of their pre-tax income on debt repayments in 2017, compared with 20p for households aged 65 and over. Levels of consumer credit have soared in recent years to more than £200bn, prompting debt charities to warn that lenders are repeating the mistakes made in the early part of the century, when households on low incomes were sold loans they could not repay.

Matt Whittaker, the chief economist at the Resolution Foundation, said most of the increase in consumer debt since 2014 was among middle and higher income groups and they could afford to absorb an increase in interest rates. The cost of servicing Britain’s household debt is low by historical standards, he said, with repayments accounting for 7.7% of disposable income, well below the 12.3% recorded just before the financial crisis, and in line with the level seen during the mid-1990s and early 2000s. “However, while the recent growth in debt is less of a concern, it is very worrying that almost half of low-income families are already showing signs of debt distress,” Whittaker said. “While rates have been at historic lows for a decade now, many families have experienced a tight income squeeze over this period and have not been able to get back on the front foot when it comes to servicing their debts.”

Read more …

Yawn.

May Starts Drive to End the Conservative Civil War Over Brexit (BBG)

U.K. Prime Minister Theresa May embarks this week on a determined push to bring her divided Cabinet together and come up with a Brexit plan. As European negotiators show increasing signs of impatience, senior U.K. ministers are preparing to deliver a series of speeches in the coming weeks setting out a vision of life outside the European Union. They’ll culminate with an address by May. Dubbed a “Road Map to Brexit,” the schedule begins on Wednesday when Foreign Secretary Boris Johnson issues an appeal to both sides of the Brexit debate. May is expected to offer a new security relationship three days later when she addresses a conference in Munich. Also scheduled to make speeches are Brexit Secretary David Davis, Trade Secretary Liam Fox, and Cabinet Office Minister David Lidington.

Absent, however, is Chancellor of the Exchequer Philip Hammond, who enraged Brexit supporters in January by suggesting Britain would see only “very modest” changes to its relationship with the EU once it leaves the bloc. May has ordered key ministers to attend an “away day” at Chequers, the prime ministerial country retreat outside London, after two meetings to find a joint position on Brexit ended without agreement last week. With just 13 months to go before Britain exits the EU, the ruling Conservatives are mired in a civil war between those who want to retain close ties to the bloc and hard-liners demanding a clean break, including total withdrawal from the EU single market and the customs union. On Friday, Michel Barnier, the EU’s chief Brexit negotiator, expressed his exasperation by warning that the post-Brexit bridging period that once seemed a certainty “is not a given,” prompting investors to sell the pound.

Businesses have said they’ll start to activate contingency plans to move jobs and operations out of the U.K. unless a transition deal is nailed down by the end of March. In her speech to cap off the “Road to Brexit” push — the date of which hasn’t been announced — May will set out the government’s “ambitions for Britain’s partnership with the EU after we have left.” It will be her third major address, following her Lancaster House speech in January last year and her Florence speech in September. “Brexit is a defining moment in the history of our nation,” May’s office said in a statement. “We will be forging an ambitious new partnership with Europe and charting our own way in the world to become a truly global, free-trading nation.”

Read more …

Afghanistan is like a Bermuda triangle.

China Enters The Graveyard Of Empires (Escobar)

The latest plot twist in the endless historical saga of Afghanistan as a graveyard of empires has thrown up an intriguing new chapter. For the past two months, Beijing and Kabul have been discussing the possibility of setting up a military base alongside Afghanistan’s border with China. “We are going to build it [the base] and the Chinese government has committed to help financially, provide equipment and train Afghan soldiers,” Mohammad Radmanesh, a spokesman for the Afghan Ministry of Defense, admitted to the AFP. On the record, the Chinese Foreign Ministry only admitted that Beijing was involved in “capacity-building” in Afghanistan, while NATO’s Resolute Support Mission, led by the United States, basically issued a “no comment.”

The military base will eventually be built in the mountainous Wakhan Corridor, a narrow strip of territory in northeastern Afghanistan that extends to China and separates Tajikistan from Pakistan. It is one of the most spectacular, barren and remote stretches of Central Asia and according to local Kyrgyz nomads, joint Afghan-Chinese patrols are already active there. True to Sydney Wignall’s fabled Spy on the Roof of the World ethos, a great deal of shadow play is in effect. Apparently, this is basically about China’s own war on terror. Beijing’s strategic priority is to prevent Uyghur fighters of the East Turkestan Islamic Movement (ETIM), who have been exiled in Afghanistan, crossing the Wakhan Corridor to carry out operations across Xinjiang, an autonomous territory in northwest China.

There is also the fear that ISIS or Daesh jihadis from Syria and Iraq may also use Afghanistan as a springboard to reach the country. Even though the jihad galaxy may be split, Beijing is concerned about ETIM. As early as September 2013, the capo of historic al-Qaeda, Ayman al-Zawahiri, supported jihad against China in Xinjiang. Later, in July 2014, Abu Bakr Al-Baghdadi, the leader of Daesh said: “Muslim rights [should be] forcibly seized in China, India and Palestine.” Then, on March 1, 2017, Daesh released a video announcing its presence in Afghanistan, with the terror group’s Uyghur jihadis vowing, on the record, to “shed blood like rivers” in Xinjiang. At the heart of the matter is China’s Belt and Road Initiative, or the New Silk Road, which will connect China with Asia, Africa, the Middle East and Europe.

Read more …

Empty politics.

China Pledges ‘Employment First’ Policies To Create Millions Of Jobs (R.)

China will boost its job creation effort and promote entrepreneurship this year, a spokeswoman for the top state planner said on Sunday, under pressure to find work for millions of unemployed people and new college graduates. Meng Wei of the National Development and Reform Commission (NDRC) said China needs to create jobs for 9.7 million people registered as unemployed and 8.2 million new college graduates, as well as workers affected by industrial capacity cuts. China’s urban-registered unemployment rate fell to 3.9 percent last year and has remained generally stable despite slowing economic growth and the government forging ahead with plans to cut back industrial capacity.

Many analysts say, however, that the official data is an unreliable indicator of employment conditions because it only measures employment in urban areas and does not take into account the millions of migrant workers who form the bedrock of China’s labour force. “We will implement an employment-first strategy and more proactive employment policies…and vigorously promote employment and entrepreneurship,” Meng told a news conference on Sunday, adding that protecting jobs was fundamental to China’s stable growth policy. Authorities are counting on “new growth engines” such as technology and services to support job creation. Meng said China will create a policy environment that supports the digital economy and will promote the big data, artificial intelligence and industrial internet sectors.

Read more …

QE bankrolls the house.

Party On, Dudes (Jim Kunstler)

In June of 2008, US crude hit $144-a-barrel, a figure so harsh that it crippled economic activity — since just about everything we do depends on oil for making, enabling, and transporting stuff. The price and supply of oil became so problematic after the year 2000 that the US had to desperately engineer a work-around to keep this hyper-complex society operating. The “solution” was debt. If you can’t afford to run your society, then try borrowing from the future to keep your mojo working. The shale oil industry was a prime beneficiary of this new hyper-debt regime. The orgy of borrowing was primed by Federal Reserve “creation” of trillions of dollars of “capital” out of thin air (QE), along with supernaturally low interest rates on the borrowed money (ZIRP). The oil companies were desperate in 2008. They were, after all, in the business of producing… oil! (Duh….) — even if a giant company like BP pretended for a while that its initials stood for “Beyond Petroleum.”

The discovery of new oil had been heading down remorselessly for decades, to the point that the world was fatally short of replacing the oil it used every year with new supply. The last significant big fields — Alaska, the North Sea, and Siberia — had been discovered in the 1960s and we knew for sure that the first two were well past their peaks in the early 2000s. By 2005, most of the theoretically producible new oil was in places that were difficult and ultra-expensive to drill in: deep water, for instance, where you need a giant platform costing hundreds of millions of dollars, not to mention armies of highly skilled (highly paid) technicians, plus helicopters to service the rigs. The financial risk (for instance, of drilling a “dry hole”) was matched by the environmental risk of a blowout, which is exactly what happened to BP’s 2010 Deepwater Horizon platform in the Gulf of Mexico, with clean-up costs estimated at $61 billion.

[..] The shale oil companies could get plenty of cash-flow going, but it all went to servicing their bonds or other “innovative” financing schemes, and for many of the companies the cash flow wasn’t even covering those costs. It cost at least six million dollars for each shale well, and it was in the nature of shale oil that the wells depleted so quickly that after Year Three they were pretty much done. But it was something to do, at least, if you were an oil company — an alternative to 1) doing no business at all, or 2) getting into some other line-of-work, like making yoga pants or gluten-free cupcakes.

Read more …

“..87 allegations of sexual abuse by staff in 2016-17..” “..more than 120 workers across a range of leading charities had been accused of sexual abuse in the past year alone..”

Oxfam Faces Losing Funding As Crisis Grows Over Abuse Claims (G.)

Oxfam was scrambling on Sunday night to contain a growing crisis over claims of sexual misconduct by aid workers before a crunch meeting on Monday that could see the charity stripped of its government funding. Amid anger from the government and the wider aid sector at revelations that Oxfam staff in Haiti paid prostitutes – possibly underage – for sex in 2011, the charity’s chair of trustees, Caroline Thomson, pledged to widen a review of its practices to include the Haiti allegations and admitted “anger and shame that behaviour like that … happened in our organisation”. She set out the steps Oxfam would take to avoid a similar scandal in future after the international development secretary, Penny Mordaunt, issued a damning rebuke to the charity. Mordaunt warned that it would receive no more public money unless it demonstrated “moral leadership” and handed over all information on aid workers’ alleged use of prostitutes on the island.

[..] Oxfam’s fight to secure its financial footing came after days of escalating stories about the conduct of its workers after revelations that staff in Haiti had been dismissed for using prostitutes for sex parties. Any hopes the charity’s leadership had that the scandal might quickly subside were dashed when it was reported in the Observer that Oxfam staff in Chad had also used prostitutes and when Oxfam’s own annual report resurfaced, showing it dealt with 87 allegations of sexual abuse by staff in 2016-17. Oxfam’s crisis threatened to spill across the charity sector on Sunday with reports that more than 120 workers across a range of leading charities had been accused of sexual abuse in the past year alone.

Read more …

Everyone in Haiti knew about this. And it’s not just Oxfam either.

Oxfam Reels From Prostitution Scandal (G.)

deep disgust at what they were hearing was tinged with a sense of inevitability for some. “We’ve all worked with people who’ve worked in Ethiopia, DRC, Haiti, Malawi, Thailand etc who’ve seen similar things across the entire sector,” said one Oxfam worker in the Middle East. Goldring, admired by staff as “deeply thoughtful”, set out the story – first a chronology of what happened in Haiti in 2011, and then a commentary on the issues it raised, including pointing out the dilemmas that the Oxfam staff handling the case faced. For example, he said, the charity didn’t report it to the Haitian police because it was concerned that could rebound adversely on the women involved.

He struck one attendee as “desperately keen to put across the point that we don’t think there was a cover-up because we didn’t hide that there was a problem in Haiti”. Only Oxfam hadn’t been open about what that problem was. Some staff also felt there was a “single-mindedness about the attack on Oxfam” that was not commensurate with the weight of what had happened in 2011. It was shocking and wrong, but some felt that the problems revealed were probably not unique to Oxfam. “I’m really frustrated at the Oxfam-only lens in this – granted what happened was horrific,” said one Oxfam worker abroad. “I’ve worked for [several other NGOs] and there just isn’t any type of policy or procedure in place for any of this stuff.”

Read more …

The people responsible for these decisions should be taken to court. Even -make that especially- politicians must be held to their own laws.

The UK’s Hidden Role In Assange’s Detention (Cook)

It now emerges that the last four years of Julian Assange’s effective imprisonment in the Ecuadorean embassy in London have been entirely unnecessary. In fact, they depended on a legal charade. Behind the scenes, Sweden wanted to drop the extradition case against Assange back in 2013. Why was this not made public? Because Britain persuaded Sweden to pretend that they still wished to pursue the case. In other words, for more than four years Assange has been holed up in a tiny room, policed at great cost to British taxpayers, not because of any allegations in Sweden but because the British authorities wanted him to remain there. On what possible grounds could that be, one has to wonder? Might it have something to do with his work as the head of Wikileaks, publishing information from whistleblowers that has severely embarrassed the United States and the UK.

In fact, Assange should have walked free years ago if this was really about an investigation – a sham one at that – into an alleged sexual assault in Sweden. Instead, as Assange has long warned, there is a very different agenda at work: efforts to extradite him onwards to the US, where he could be locked away for good. That was why UN experts argued two years ago that he was being “arbitrarily detained” – for political crimes – not unlike the situation of dissidents we support in other parts of the world. According to a new release of emails between officials, the Swedish director of public prosecutions, Marianne Ny, wrote to Britain’s Crown Prosecution Service on 18 October 2013, warning that Swedish law would not allow the case to be continued. This was, remember, after Sweden had repeatedly failed to take up an offer from Assange to interview him at the embassy in London, as had happened in 44 other cases between Sweden and Britain.

Ny wrote to the CPS: “We have found us to be obliged to lift the detention order … and to withdraw the European arrest warrant. If so this should be done in a couple of weeks. This would affect not only us but you too in a significant way.” Three days later, suggesting that legal concerns were far from anyone’s mind, she emailed the CPS again: “I am sorry this came as a [bad] surprise… I hope I didn’t ruin your weekend.” In a similar vein, proving that this was about politics, not the law, the chief CPS lawyer handling the case in the UK, had earlier written to the Swedish prosecutors: “Don’t you dare get cold feet!!!”

Read more …

May 202017
 
 May 20, 2017  Posted by at 9:05 am Finance Tagged with: , , , , , , , , , ,  


Minor White Windowsill Daydreaming Rochester NY 1958

 

The Housing Moment Investors Dread Is Here (DDMB)
Home Ownership Among Young UK Families Halves In 20 Years (TiM)
A Monster Eating the Nation (Jim Kunstler)
Democrats Are Falling For Fake News About Russia (Vox)
Harvard Study Reveals Extent of Anti-Trump Media Bias (HeatSt.)
Comey’s 2007 Brush With Scandal: Jim’s Loyalty Was More To Chuck Schumer (SD)
Constitutional Crisis In Washington? More Like Attempted Coup (David Goldman)
Brazil Plea-Bargain Testimony Says President Took $4.6 Million In Bribes (R.)
Maduro to Trump: ‘Get Your Dirty Hands Off Venezuela!’ (R.)
Theresa May To Create New, Government Controlled Internet in UK (Ind.)
Arctic Stronghold of World’s Seeds Flooded After Permafrost Melts (G.)
Varoufakis Claims Tsipras Pressured Him To Accept Creditors’ Demands (K.)
‘They Stole My Money’: Greek Dreams Of Retirement Turn Sour (AP)
Teen Refugees Trapped In Greece Turn To Prostitution (Spiegel)

 

 

Cracks in the mirage.

The Housing Moment Investors Dread Is Here (DDMB)

Amid the carnage in the auto sector, economists have sought solace in the comforts of home, sweet home. A recent Census release suggests that Millennials, long sidelined, have finally started to tiptoe into the home-buying market. The reception to the data was so effusive that other reports, suggesting housing has reached a much different sort of turning point, were lost in the fray. The good news is that the trend is unequivocal, based purely on supply and demand. The bad news is in the actual message. The May University of Michigan Consumer Sentiment survey showed a six-year low among those who think it’s a good time to buy a house and a 12-year high among those who say it’s a good time to sell. Disparities of this breadth tend to coincide with break points and that’s just where we’ve landed in the cycle.

The beginning of May officially marked the advent of a buyers’ market, defined simply as sellers outnumbering buyers by a wide enough margin to trigger falling prices. Yes, it’s the moment buyers have been waiting for. It is also the moment private equity investors, those who’ve crowded out natural buyers, have been dreading. Three factors determine home sales: interest rates, unemployment and prices. The recent decline in interest rates has provided some semblance of relief; purchase applications have bounced off April’s levels, when they were down four% over last year. April and May are obviously critical to the spring sales season. The low unemployment rate would seem to be a huge plus if it wasn’t for the stress building around thousands of layoff announcements across the retail and auto sectors that won’t find their way into this most lagging of economic indicators for months.

That is not to say those getting pink slips don’t know their fate, which should influence home sales going forward. Price is the one bright spot, with one glaring caveat: Falling home prices tend to be associated with a negative macroeconomic backdrop, which does not bode well for any buyer of, well, anything. Dig into the Federal Reserve’s recently released first quarter Senior Loan Officer Survey and you will see nothing of note on the residential mortgage side – banks reported that both loan demand and lending standards remained unchanged in the first three months of the year. But that is the here and now. Demand and supply in the auto sector, where pricing has been under pressure for some time, looked quite similar to that for houses several months back.

According to the Fed survey, at minus 13.3%, demand for auto loans flat-lined in deeply negative territory, as was the case in last year’s fourth quarter, the worst levels of the current expansion. This data point corroborated the Michigan survey, which showed that those who said it was a good time to buy a car fell to the lowest level since August 2014. Meanwhile, demand for credit card loans slid to minus 10.2% from minus 8.3% in the last three months of last year. In the event you’re detecting a trend, households are sending out distress signals that have just begun to be picked up in housing, even as household debt levels recapture their pre-crisis highs.

Read more …

A radical change to an entire society, and one that will take decades to absorb.

Home Ownership Among Young UK Families Halves In 20 Years (TiM)

The number of young family owning their own homes has halved across large parts of the country in the space of a generation, and the struggle to get on the housing ladder is not restricted to the South East. Research by The Resolution Foundation found that 31% of 25 to 34-year-olds surveyed were home owners in 2016, compared to 58% in 1994. Regionally, 30% of those surveyed in West Yorkshire owned homes last year, compared to 61% in 1994. Similarly, in Greater Manchester, home ownership levels fell to 29% from 59% over the same 22-year period. The South West also suffered a decline, to 36% last year from 62% in 1994, while East Anglia fell to 34% from 61% in the same period. The decrease was most pronounced in outer London, where home ownership dropped to 20% in 2016 from 55% in 1994.

Big falls were also recorded in other areas of the South East including Brighton, Southampton, Reading and Milton Keynes, with home ownership in the younger age group bracket declined from to 34% last year from 64% in 1994. The Resolution Foundation argued that such a ‘seismic shift’ in home ownership puts the younger generation in a very different position from that of the older, baby boomer generation, leaving many more young families living in the private rented sector. Lindsay Judge, a senior policy analyst at the Resolution Foundation, said: ‘London house prices always dominate the headlines, but with all eyes on the capital we’re missing the bigger picture. ‘From Bristol to East Anglia and up to West Yorkshire, large swathes of young families across the country simply cannot afford to buy their own home.’This has implications for their living standards in the here and now, but also in the future when their children grow up and they approach retirement without this key asset to draw upon in old age.

Read more …

“Why do you suppose nations employ foreign ministers and ambassadors, if not to conduct conversations at the highest level with other national leaders? And might these conversations include matters of great sensitivity, that is, classified information?”

A Monster Eating the Nation (Jim Kunstler)

Is there any question now that the Deep State is preparing to expel President Donald Trump from the body politic like a necrotic organ? The Golden Golem of Greatness has floundered pretty badly on the job, it’s true, but his mighty adversaries in the highly politicized federal agencies want him to fail spectacularly, and fast, and they have a lot of help from the NY Times / WashPo / CNN axis of hysteria, as well as such slippery swamp creatures as Lindsey Graham. There are more problematic layers in this matter than in a Moldavian wedding cake. America has been functionally ungovernable for quite a while, well before Trump arrived on the scene. His predecessor managed to misdirect the nation’s attention from the cumulative dysfunction with sheer charm and supernatural placidity — NoDrama Obama.

But there were a few important things he could have accomplished as chief exec, such as directing his attorney general to prosecute Wall Street crime (or fire the attorney general and replace him with someone willing to do the job). He could have broken up the giant TBTF banks. He could have aggressively sponsored legislation to overcome the Citizens United SOTUS decision (unlimited corporate money in politics) by redefining corporate “citizenship.” Stuff like that. But he let it slide, and the nation slid with him down a greasy chute of political collapse. Which we find embodied in Trump, a sort of tragicomic figure who manages to compound all of his other weaknesses of character with a childish impulsiveness that scares folks. It is debatable whether he has simply been rendered incompetent by the afflictions heaped on by his adversaries, or if he is just plain incompetent in, say, the 25th Amendment way.

I think we’ll find out soon enough, because impeachment is a very long and arduous path out of this dark place. The most curious feature of the current crisis, of course, is the idiotic Russia story that has been the fulcrum for levering Trump out of the White House. This was especially funny the past week with the episode involving Russian Foreign Minister Lavrov and Ambassador Kislyak conferring with Trump in the White House about aviation security around the Middle East. The media and the Lindsey Graham wing of the Deep State acted as if Trump had entertained Focalor and Vepar, the Dukes of Hell, in the oval office. Why do you suppose nations employ foreign ministers and ambassadors, if not to conduct conversations at the highest level with other national leaders? And might these conversations include matters of great sensitivity, that is, classified information? If you doubt that then you have no understanding of geopolitics or history.

Read more …

The writer starts off quite right, but then veers off into this incomprehensible stuff: “There are even legitimate reasons to believe that Trump’s campaign worked with Russian hackers to undermine Hillary Clinton. That may or may not turn out to be true, but it is least plausible and somewhat supported by the available evidence.”

Legitimate reasons that may not be true? “Somewhat” supported by evidence? That’s where I stop reading.

Democrats Are Falling For Fake News About Russia (Vox)

President Donald Trump is about to resign as a result of the Russia scandal. Bernie Sanders and Sean Hannity are Russian agents. The Russians have paid off House Oversight Chair Jason Chaffetz to the tune of $10 million, using Trump as a go-between. Paul Ryan is a traitor for refusing to investigate Trump’s Russia ties. Libertarian heroine Ayn Rand was a secret Russian agent charged with discrediting the American conservative movement. These are all claims you can find made on a new and growing sector of the internet that functions as a fake news bubble for liberals, something I’ve dubbed the Russiasphere. The mirror image of Breitbart and InfoWars on the right, it focuses nearly exclusively on real and imagined connections between Trump and Russia. The tone is breathless: full of unnamed intelligence sources, certainty that Trump will soon be imprisoned, and fever dream factual assertions that no reputable media outlet has managed to confirm.

Twitter is the Russiasphere’s native habitat. Louise Mensch, a former right-wing British parliamentarian and romance novelist, spreads the newest, punchiest, and often most unfounded Russia gossip to her 283,000 followers on Twitter. Mensch is backed up by a handful of allies, including former NSA spook John Schindler (226,000 followers) and DC-area photographer Claude Taylor (159,000 followers). There’s also a handful of websites, like Palmer Report, that seem devoted nearly exclusively to spreading bizarre assertions like the theory that Ryan and Sen. Majority Leader Mitch McConnell funneled Russian money to Trump — a story that spread widely among the site’s 70,000 Facebook fans. Beyond the numbers, the unfounded left-wing claims, like those on the right, are already seeping into the mainstream discourse.

In March, the New York Times published an op-ed by Mensch instructing members of Congress as to how they should proceed with the Russia investigation (“I have some relevant experience,” she wrote). Two months prior to that, Mensch had penned a lengthy letter to Vladimir Putin titled “Dear Mr. Putin, Let’s Play Chess” — in which she claims to have discovered that Edward Snowden was part of a years-in-the-making Russian plot to discredit Hillary Clinton. Last Thursday, Sen. Ed Markey (D-MA) was forced to apologize for spreading a false claim that a New York grand jury was investigating Trump and Russia. His sources, according to the Guardian’s Jon Swaine, were Mensch and Palmer:

Read more …

First, media exposure was a main factor in winning Trump the election. Now, not so much.

Harvard Study Reveals Extent of Anti-Trump Media Bias (HeatSt.)

A major new study out of Harvard University has revealed the true extent of the mainstream media’s bias against Donald Trump. Academics at the Shorenstein Center on Media, Politics and Public Policy analyzed coverage from Trump’s first 100 days in office across 10 major TV and print outlets. They found that the tone of some outlets was negative in as many as 98% of reports, significantly more hostile than the first 100 days of the three previous administrations:

The academics based their study on seven US outlets and three European ones. In America they analyzed CNN, NBC, CBS, Fox News, the New York Times, the Washington Post and the Wall Street Journal. They also took into account the BBC, the UK’s Financial Times and the German public broadcaster ARD. Every outlet was negative more often than positive. Only Fox News, which features some of Trump’s most enthusiastic supporters and is often given special access to the President, even came close to positivity. Fox was ranked 52% negative and 48% positive. The study also divided news items across topics. On immigration, healthcare, and Russia, more than 85% of reports were negative. On the economy, the proportion was more balanced – 54% negative to 46% positive:

The study highlighted one exception: Trump got overwhelmingly positive coverage for launching a cruise missile attack on Syria. Around 80% of all reports were positive about that.

The picture was very different for other recent administrations. The study found that President Obama’s first 100 days got a good write-up overall – with 59% of reports positive. Bill Clinton and George W Bush got overall negative coverage, it found, but to a much lesser extent than Trump. Clinton’s first 100 days got 40% positivity, while Bush’s got 43%. Trump has repeatedly claimed that his treatment by the media is unprecedented in its hostility. This study suggests that, at least when it comes to recent history, he’s right.

Read more …

Comey has a past.

Comey’s 2007 Brush With Scandal: Jim’s Loyalty Was More To Chuck Schumer (SD)

[..] the current episode is not the first time Comey and his associates plotted to oust a sitting Republican official through highly orchestrated political theater and carefully crafted narratives in which Comey is the courageous hero bravely fighting to preserve the rule of law. To understand how Comey came to be FBI director in the first place, and how he operates in the political arena, it is important to review the last scandal in which Comey had a front-row seat: the 2007 U.S. attorney firings and the fight over the 2004 reauthorization of Stellar Wind, a mass National Security Agency (NSA) surveillance program designed to mitigate terrorist threats in the wake of the 9/11 attacks. The pivotal scene in the Comey-crafted narrative, a drama that made Comey famous and likely paved the road to his 2013 appointment by President Barack Obama to run the FBI, occurred in a Beltway hospital room in early 2004.

In Comey’s view, Comey was the last honest man in Washington, the only person standing between a White House that rejected any restraints on its power, and the rule of law protecting Americans from illegal mass surveillance. A former White House counsel and attorney general with extensive first-hand experience dealing with Comey, however, paints a very different picture of what happened in that hospital room, and disputes numerous key details. In this account, Comey’s actions showcase a duplicitous, secretive schemer whose true loyalties were not to the officials to whom he reported, but to partisan Democrats like Senate Minority Leader Chuck Schumer (D-N.Y.). To fully understand and appreciate Jim Comey’s approach to politics, the writings and testimony of Alberto Gonzales, who served as both White House counsel and attorney general during the events in question and is intimately aware of Comey’s history of political maneuvering, is absolutely essential.

Gonzales’s descriptions of his interactions with Comey, included in his 2016 book “True Faith And Allegiance,” are detailed and extensive. While his tone is measured, the language he uses to describe Comey’s actions in 2004 and 2007 leaves little doubt about the former top Bush official’s views on Comey’s character. Gonzales’s opinion is clearly colored by the fact that Comey cravenly used him to jumpstart his own political career by going public with surprise (and questionable) testimony that Gonzales had attempted to take advantage of a deathly ill man in order to ram through authorization of an illegal surveillance program. Bush’s Attorney General John Ashcroft had taken ill and was in the hospital at a pivotal time. The legal authorization of a surveillance program meant to find and root out terrorist threats was days from expiring.

What happened in Ashcroft’s hospital room in March of 2004 later became political fodder for a hearing in which Senate Democrats used Comey to dredge up the 2004 hospital meeting to tar Gonzales’ credibility and suggest he was unfit to continue serving as attorney general. As the 2004 and 2007 sagas show, Comey is clearly no stranger to using the unarguably legal dismissal of government employees as the backdrop for casting himself as the story’s protaganist standing up to the forces of corruption. “[I] told my security detail that I needed to get to George Washington Hospital immediately. They turned on the emergency equipment and drove very quickly to the hospital,” Comey testified. “I got out of the car and ran up — literally ran up the stairs with my security detail.” “I was concerned that, given how ill I knew the attorney general was, that there might be an effort to ask him to overrule me when he was in no condition to do that,” Comey said.

Read more …

It’s a politics and media crisis.

Constitutional Crisis In Washington? More Like Attempted Coup (David Goldman)

This is NOT a Constitutional crisis, contrary to press hype, but an attempted coup, as a senior Republican statesman told a private briefing this week. As Prof. Jonathan Turley of George Washington University wrote yesterday at TheHill.Com, the much-ballyhooed Comey memo is “pretty thin soup” as far as obstruction of justice is concerned. “Encouraging leniency or advocating for an associate may be improper,” Prof. Turley added, but it doesn’t come close to the legal threshold for impeachment, especially because no criminal proceedings were underway or even contemplated against Gen. Flynn. What exactly is going on? The Democrats never accepted the Trump election victory, and neither did the McCain wing of the Republican Party, which was humiliated and sidelined by Trump. The Wall Street Journal editorial page published a signed op-ed yesterday claiming that Trump’s alleged leak of covert intelligence to Russian Foreign Minister Lavrov showed his unfitness for office.

Presidents and Cabinet members leak secret intelligence frequently, but whether they are held to account for it is a political matter. Obama and his then Defense Secretary Leon Panetta leaked the fact that Seal Team 6 had killed Osama bin Laden as well as the fact that a Pakistani physician had tipped the US off to his whereabouts, life-threatening leaks for which Obama was given a free pass. The object of all of this, said the Republican statesman, is to persuade a sufficient number of Republican congressman and senators to abandon Trump and declare him “unfit” for office. Nothing quite like this ever has happened in American politics. Trump will NOT be caught in an impeachable offense, but his detractors will NOT give up–so a prolonged “cold civil war” (Prof. Angelo Codevilla’s phrase) is likely to paralyze policy-making in Washington for some time. That can’t be good for the stock market.

Read more …

He shouldn’t last the weekend.

Brazil Plea-Bargain Testimony Says President Took $4.6 Million In Bribes (R.)

Brazil’s top court released plea-bargain testimony on Friday accusing President Michel Temer and his two predecessors of receiving millions of dollars in bribes, the most damaging development yet in a historic political corruption probe. The testimony made public by the Supreme Court is from executives of the world’s largest meatpacking company, and raises serious doubts about whether Temer can maintain his grip on the presidency. The scandals that have engulfed Brazil’s political class and many business elites reduce the chances that Temer, a conservative who took office after leftist former President Dilma Rousseff was impeached last year, can push through economic reforms crucial for Latin America’s biggest country to recover from its worst recession on record.

The Supreme Court on Thursday said it approved an investigation of Temer for corruption and obstruction of justice. Calls for his resignation intensified, including an editorial in the O Globo newspaper, which is normally criticized by leftists for backing conservative politicians. “This is easily the worst moment in Brazil since we returned to democracy,” said Claudio Couto, a political scientist at the Getulio Vargas Foundation, a top university, calling the claims “the mother of all plea bargains.” “This testimony is hitting everyone, all the major political players and, most importantly, a sitting president,” he added.

Read more …

How is it possible that in no western media reports on Venezuela the CIA is ever mentioned? Think they left when Chavez died? Think the country implodes like this all by itself?

Maduro to Trump: ‘Get Your Dirty Hands Off Venezuela!’ (R.)

Venezuelan President Nicolas Maduro blasted Donald Trump on Friday after a fresh round of U.S. sanctions and strong condemnation of his socialist government from the U.S. leader. “Enough meddling … Go home, Donald Trump. Get out of Venezuela,” Maduro thundered in a speech carried on live TV. “Get your dirty hands out of here.” The Trump administration imposed sanctions on the chief judge and seven other members of Venezuela’s Supreme Court on Thursday as punishment for annulling the opposition-led Congress in a series of rulings this year. The new sanctions package was aimed at stepping up pressure on Maduro and his loyalists following a crackdown on street protests and efforts to consolidate his rule of the South American oil-producing country. At the White House on Thursday, Trump expressed dismay at how once-booming Venezuela was now mired in poverty, saying “it’s been unbelievably poorly run” and calling the humanitarian situation “a disgrace to humanity.”

Maduro had initially urged the world to give Trump a chance after he was elected in November but his government unleashed its strongest condemnation to date of the Republican president. “President Trump’s aggressions against the Venezuelan people, its government and its institutions have surpassed all limits,” said a government statement that accused Washington of seeking to destabilize Venezuela and foment foreign intervention. The statement also accused Washington of financing the Venezuelan opposition while ignoring problems at home like income inequality and rights violations. “The extreme positions of a government just starting off only confirmed the discriminatory, racist, xenophobic, and genocidal nature of U.S. elites against humanity and its own people, which has now been heightened by this new administration which asserts white Anglo-Saxon supremacy,” the statement said.

Read more …

Classic. Using fear, of terrorism, of pornography, etc., to clamp down on everyone’s freedom, according to a certain party’s views. No privacy for you, guys. Use your votes wisely.

Theresa May To Create New, Government Controlled Internet in UK (Ind.)

Theresa May is planning to introduce huge regulations on the way the internet works, allowing the government to decide what is said online. Particular focus has been drawn to the end of the manifesto, which makes clear that the Tories want to introduce huge changes to the way the internet works. “Some people say that it is not for government to regulate when it comes to technology and the internet,” it states. “We disagree.” Senior Tories confirmed to BuzzFeed News that the phrasing indicates that the government intends to introduce huge restrictions on what people can post, share and publish online. The plans will allow Britain to become “the global leader in the regulation of the use of personal data and the internet”, the manifesto claims.

It comes just soon after the Investigatory Powers Act came into law. That legislation allowed the government to force internet companies to keep records on their customers’ browsing histories, as well as giving ministers the power to break apps like WhatsApp so that messages can be read. The manifesto makes reference to those increased powers, saying that the government will work even harder to ensure there is no “safe space for terrorists to be able to communicate online”. That is apparently a reference in part to its work to encourage technology companies to build backdoors into their encrypted messaging services – which gives the government the ability to read terrorists’ messages, but also weakens the security of everyone else’s messages, technology companies have warned.

The government now appears to be launching a similarly radical change in the way that social networks and internet companies work. While much of the internet is currently controlled by private businesses like Google and Facebook, Theresa May intends to allow government to decide what is and isn’t published, the manifesto suggests.

Read more …

They never thought about this?

Arctic Stronghold of World’s Seeds Flooded After Permafrost Melts (G.)

It was designed as an impregnable deep-freeze to protect the world’s most precious seeds from any global disaster and ensure humanity’s food supply forever. But the Global Seed Vault, buried in a mountain deep inside the Arctic circle, has been breached after global warming produced extraordinary temperatures over the winter, sending meltwater gushing into the entrance tunnel. The vault is on the Norwegian island of Spitsbergen and contains almost a million packets of seeds, each a variety of an important food crop. When it was opened in 2008, the deep permafrost through which the vault was sunk was expected to provide “failsafe” protection against “the challenge of natural or man-made disasters”. But soaring temperatures in the Arctic at the end of the world’s hottest ever recorded year led to melting and heavy rain, when light snow should have been falling.

“It was not in our plans to think that the permafrost would not be there and that it would experience extreme weather like that,” said Hege Njaa Aschim, from the Norwegian government, which owns the vault. “A lot of water went into the start of the tunnel and then it froze to ice, so it was like a glacier when you went in,” she told the Guardian. Fortunately, the meltwater did not reach the vault itself, the ice has been hacked out, and the precious seeds remain safe for now at the required storage temperature of -18C. But the breach has questioned the ability of the vault to survive as a lifeline for humanity if catastrophe strikes. “It was supposed to [operate] without the help of humans, but now we are watching the seed vault 24 hours a day,” Aschim said. “We must see what we can do to minimise all the risks and make sure the seed bank can take care of itself.”

The vault’s managers are now waiting to see if the extreme heat of this winter was a one-off or will be repeated or even exceeded as climate change heats the planet. The end of 2016 saw average temperatures over 7C above normal on Spitsbergen, pushing the permafrost above melting point. “The question is whether this is just happening now, or will it escalate?” said Aschim. The Svalbard archipelago, of which Spitsbergen is part, has warmed rapidly in recent decades, according to Ketil Isaksen, from Norway’s Meteorological Institute. “The Arctic and especially Svalbard warms up faster than the rest of the world. The climate is changing dramatically and we are all amazed at how quickly it is going,” Isaksen told Norwegian newspaper Dagbladet.

Read more …

I don’t know if they still talk.

Varoufakis Claims Tsipras Pressured Him To Accept Creditors’ Demands (K.)

Former finance minister Yanis Varoufakis on Friday hit out at Prime Minister Alexis Tsipras, claiming that the premier had tried to scare him into yielding to creditors’ demands. “In the summer of 2015 Alexis Tsipras told me that I should fear a new Goudi,” Varoufakis told VICE magazine, referring to a military coup that took place in Greece in 1909 amid simmering social tensions. The former minister, who has launched his own party, DiEM25, said the alleged statement struck him as a threat aimed at forcing him to agree with Tsipras’s decision to give in to creditors. In a Skai TV interview last week, Varoufakis said Greece “will become Kosovo, a protectorate run by an employee of the European Union.”

Read more …

Greece’s problem is public debt, not private debt. The people did not cause the crisis, they only pay for it.

‘They Stole My Money’: Greek Dreams Of Retirement Turn Sour (AP)

It was supposed to be a time to look forward to. After decades of work, retirement was for many meant to provide a chance to slow down and enjoy life. A holiday, an evening out with old friends, the odd fishing trip. Instead, many Greek pensioners say they are struggling to get by. The government has repeatedly cuts old age benefits as part of the country’s three international bailouts and many retirees now say they are at breaking point financially. Some have unemployed children they try to help on shrinking pensions, others are seeing rising taxes eat into lifetime savings. A new austerity bill approved in parliament early Friday cuts their pensions even further, putting their plight in focus.

Greece once had a generous pension system – too generous to be sustainable, especially with an aging population. Retirement was possible from as early as the age of 55 after 30 years of work. Many had extra perks: public sector employees could retire as early as 52. Some women with young children could retire with a reduced pension at 50. But the financial crisis left Greece reliant on international creditors, who pushed for economic change – not least to pensions. The standard retirement age is now 67. Many early retirement provisions have been abolished. Including pensions, incomes have dropped 40% over the last seven years of crisis. Here is a look at the problem through the stories of four pensioners.

Mina Griva, 78, widow and former factory worker Griva’s husband, who worked in a steel plant in Greece, died eight years ago. Her initial widow’s pension of €998 ($1,110) and a €300 supplementary pension have been cut to €560 and €150 respectively. “They’ve destroyed us,” said Griva, who now helps out daily at a municipal care center for the elderly. “Pensioners are crying.” A mother of five, she uses her pension to help her son, who’s been unemployed for five years. She moved out of her small Athens apartment to give it to him, and lives in a single room on the last floor of the building. Now, she avidly watches political talk shows on TV to figure out how much further her pension will drop.

Griva left Greece in 1964 and worked for 15 years in Germany, initially as a cleaner in a cheese factory and later working an ironing press in a clothing factory. Times were tough in Greece then, and she worked double eight-hour shifts to send money home to her family. She saved, and eventually had enough to secure homes for her children, and a small apartment for herself. She thought she was securing her family’s future. “We left here to build something,” said Griva. Instead, the austerity measures ate into their lives, with new property taxes, layoffs and income cuts. “Now you can’t even buy a bread ring for your grandchildren,” she said. “I don’t know where this will go. Things are very, very hard.”

Read more …

Damn you, Brussels. Damn you, Merkel, Rutte, Hollande, Cameron, Renzi. You created this.

Teen Refugees Trapped In Greece Turn To Prostitution (Spiegel)

Mohammed is approached by a middle-aged man wearing greasy beige pants, a blue shirt and a blue baseball cap. Although the man speaks Greek, the 17-year-old boy from Afghanistan knows exactly what he wants. “No,” Mohammad repeatedly says in English, his voice cracking and his eyes filling with tears. But the man keeps pushing. “Come with me. I will give you food, pay you.” The man only stops when he realizes he is being watched. He then grudgingly walks away and sits down on a nearby bench. From there, he starts scouring the field again, searching for another boy. It was broad daylight on a sunny Tuesday morning on Victoria Square in the heart of Athens. The square has been a meeting place and a makeshift home for thousands of migrants since the refugee crisis hit Greece two years ago – and now it is increasingly becoming a prostitution hub for underage refugees.

Mohammad hasn’t gone that far yet, but he says it is only a matter of time until he goes home with a man. He has just 30 euros left in his pocket, and he is quickly losing hope. “When this money runs out, I fear I will have no other choice but do what the others are doing. Have sex with these older men. What should I do? I have no place to stay, nothing to eat. Should I just die in the park?” he says, finally bursting into tears. Mohammed says he lost his parents in an attack in Afghanistan. He has been in Athens for a month, he says, after fleeing his home alone and reaching the Greek island of Lesbos last February, where he registered as a minor. He then claimed to be an adult to escape the violence in the island’s notorious Moria camp. Since then, despite looking very much like a teenager, with pimples, a small stature and thin voice, he has been turned away from shelters for minors.

When night comes, Mohammad rolls himself up in a blanket on a corner of the square. His only possession is a yellow envelope that he guards closely. Inside, he keeps his refugee registration papers and a single-page CV. According to Mohammad’s papers, he applied for asylum in Lesbos in November 2016. The date set for his interview is January 4, 2018. It is mostly boys from Afghanistan, Pakistan and Syria – who either came alone or were separated from their families along their perilous journey to Europe – who are now waiting for their refugee claims to be processed in Greece. In the meantime, the authorities are supposed to look after them, but there are only 53 shelters with 1,272 spots. Of the approximately 2,000 registered minors, about 800 are housed in large camps, are in police custody or are homeless.

[..] Everyone – the authorities, the NGO workers, the police – know what is going on. But nobody seems willing or able to do anything about it. And this despite the fact that the adult clients are breaking the law, despite the fact that various institutions have devoted themselves to protecting young refugees. But prostitution is booming because the system is failing. Because Greece doesn’t have the resources to take care of underage refugees. Because the processing of asylum applications is chaotic and authorities from one agency don’t know what authorities from other agencies are doing. And because the boys need to file criminal complaints before their clients can be prosecuted.

Read more …