Jul 152018
 
 July 15, 2018  Posted by at 9:31 am Finance Tagged with: , , , , , , , , , ,  


Ezra Stoller Parking garage, New Haven, Connecticut 1963

 

Theresa May: Trump Told Me To Sue The EU (BBC)
Trump Reveals The Queen’s Private Views On Brexit (G.)
Theresa May Warns There Could Be ‘No Brexit At All’ (R.)
The Chequers Brexit Compromise Offers The Worst Of Both Worlds (Mandelson)
Prepare For No-Deal Brexit, German Business Groups Tell Members (R.)
Immigrant Children, Parents Reunited Faster Under New Court Order (R.)
Spain Saves Over 340 Migrants At Sea, One On Truck Tyre (AFP)
450 Migrants Stranded At Sea As Italy, Malta Dig Heels In (AFP)
Mobile Phones Are ‘The Best Spying Device You Can Imagine’ (CNBC)
The Wealthy Are Plotting To Leave Us Behind (Rushkoff)

 

 

Stranger things have happened.

Theresa May: Trump Told Me To Sue The EU (BBC)

Donald Trump told Theresa May she should sue the EU rather than negotiate, she has told the BBC. The US president said on Friday at a joint press conference that he had given her a suggestion but she had found it too “brutal”. Asked by the BBC’s Andrew Marr what it was he had said, she replied: “He told me I should sue the EU – not go into negotiations.” She defended her blueprint for Brexit and urged her critics to back it. She said it would allow the UK to strike trade deals with other nations, end free movement of people and the jurisdiction of the European Court of Justice.

A White Paper published on Thursday fleshed out details of the agreement reached by the cabinet on how post-Brexit trade will work. Before the paper was published, Brexit Secretary David Davis and Foreign Secretary Boris Johnson resigned, saying it would not deliver the Brexit people had voted for in the 2016 EU referendum. Talking about the president’s advice on how to handle the EU, Mrs May said: “Interestingly what the president also said at that press conference was ‘don’t walk away’. “Don’t walk away from those negotiations because then you’ll be stuck. So I want us to be able to sit down to negotiate the best deal for Britain.”

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Not really.

Trump Reveals The Queen’s Private Views On Brexit (G.)

Trump enthused about his reception at Windsor Castle on Friday, where he and Melania spent 45 minutes with the Queen. “It was a very easy talk,” he said. “You know, it’s hard to talk to somebody if you’re, sort of, if there’s not that something special. You know that better than anybody. Sometimes you’ll have a guest on where no matter what you do it’s not working, right? And then sometimes it’s magic. We had a great, a great feeling.” Morgan asked: “Did you get the feeling she liked you?” “Well I don’t want to speak for her,” Trump said, “but I can tell you I liked her. So usually that helps. But I liked her a lot.”

Asked if he had discussed Brexit, Trump said: “I did. She said it’s a very – and she’s right – it’s a very complex problem. I think nobody had any idea how complex that was going to be … Everyone thought it was going to be, ‘Oh it’s simple, we join or don’t join, or let’s see what happens’.” Trump would not say if the 92-year-old monarch told him what she really thinks of Britain’s attempt to leave the European Union. “Well,” he said, “I can’t talk, you know I’ve heard very strongly from a lot of people, you just don’t talk about that conversation with the Queen, right? You don’t wanna do that … Let me tell you what I can talk about … she is an incredible woman, she is so sharp, she is so beautiful, when I say beautiful – inside and out. That is a beautiful woman.”

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That’s not a warning, it’s a wish.

Theresa May Warns There Could Be ‘No Brexit At All’ (R.)

Prime Minister Theresa May has warned there may be “no Brexit at all” because of lawmakers’ attempts to undermine her plan to leave the European Union. “My message to the country this weekend is simple: we need to keep our eyes on the prize,” May wrote in the Mail on Sunday newspaper. “If we don’t, we risk ending up with no Brexit at all.” Earlier this week two senior ministers resigned in protest at May’s plans for trade with the EU after Britain leaves the bloc next March. Her blueprint was then criticised in a newspaper interview by U.S. President Donald Trump, a position he backtracked on during a meeting with May on Friday.

May also wrote in the Mail on Sunday article that Britain would take a tough stance in its next round of negotiations with the EU. “Some people have asked whether our Brexit deal is just a starting point from which we will regress,” she said. “Let me be clear. Our Brexit deal is not some long wish-list from which negotiators get to pick and choose. It is a complete plan with a set of outcomes that are non-negotiable.”

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Damned if you do, doomed if you don’t.

The Chequers Brexit Compromise Offers The Worst Of Both Worlds (Mandelson)

When I first looked at what had been agreed on Brexit at Chequers, I thought the plan would please nobody, but that the public might conclude that these proposals represent the best available. In reality, it’s a spatchcocked, half-in, half-out plan and the business response was frustration: it is better trade news for goods but a disappointing hard Brexit for services. Those who voted to “take back control” were more vitriolic: it is an attempt to remain close to Europe, full of concessions and compromises, and therefore a million miles from what they expected. In Brussels on the day of the white paper’s publication, I met officials on the British and EU sides, as well as the Irish, and found a desire to debate its content seriously.

For the last two years Theresa May has elevated sovereignty over trade and she seemed to be making a timely correction, as well as reaffirming her Irish border commitment. But as I returned home, my earlier doubts resurfaced. This plan neither allows us to receive the economic benefits of being fully inside the EU’s trade perimeter nor will it give us the freedom to market ourselves independently to the rest of the world. It is a halfway house that will leave us hanging by a thread, subject to the EU’s rules – whatever they are in future – with no say in their formulation. As a former EU trade commissioner, I know how complicated trade negotiations are and why they always end up with fewer gains on both sides than either expects.

So I am sympathetic to the government’s desire for something more ambitious and more customised to Britain’s needs. And I understand why the CBI has welcomed this ambition, particularly because it has chosen to prioritise international manufacturing businesses and their supply chains over services. However, it is services rather than manufacturing that make up the bulk of the UK economy and to relegate them makes no sense.

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They’re as slow as the British themselves.

Prepare For No-Deal Brexit, German Business Groups Tell Members (R.)

German business groups have urged their members to step up preparations for a hard Brexit that would see Britain crash out of the European Union next year without negotiating a deal. British Prime Minister Theresa May secured a cabinet agreement last week for “a business-friendly” proposal to leave the EU, aimed at spurring stalled Brexit talks. But the hard-won compromise has come under fire from within her governing Conservative Party and may yet fall flat with EU negotiators. “Even if the British government is moving now, companies must plan for the scenario in which there is no agreement,” Joachim Lang, managing director of the BDI, Germany’s biggest industry lobby, told the Welt am Sonntag newspaper.

Thilo Brodtmann, managing director of the VDMA engineering association, told the same paper: “It is urgent to prepare for Brexit and to expect the worst case scenario.” German industry is concerned about increased friction in trade with Britain after Brexit. Britain is the second-biggest export market for German car manufacturers. But Lang said some German businesses were only just starting to analyze what Brexit would mean for them, adding: “At least that has moved us forward from a few months ago.”

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I like Dana Sabraw.

Immigrant Children, Parents Reunited Faster Under New Court Order (R.)

When Yolany Padilla was released from immigration custody in Seattle last week, she assumed she would be quickly reunited with her 6-year-old son, who had been taken from her at the U.S.-Mexico border two months earlier. But caseworkers at Cayuga Centers in New York, where the boy had been placed, told her lawyer that the government’s vetting process for reunification would take time. Fingerprint collection and analysis alone could take 60 days, and there would also be background checks of all the adults with whom she and her son would stay. It would likely be weeks before her son could be returned to her. “I didn’t want to believe that could be true,” said Padilla, who comes from Honduras and is seeking asylum in the United States.

“It hurt so much to even think it could be 60 days.” That estimate changed abruptly on Thursday night after a federal judge’s order that the government streamline some vetting procedures for reunifying parents and children. Padilla’s lawyer, Leta Sanchez, received a call from Cayuga Centers’ general counsel saying the case had been referred for expedited processing. On Saturday, Padilla and her son, Jelsin, were reunited at the Seattle airport, where he was flown from New York. Padilla ran to her son as he entered the airport waiting area, dropping to her knees and embracing the small boy as he smiled broadly. “It’s been so long since I’ve seen him, imagine how I feel inside,” Padilla said, speaking through a translator at the airport after the reunion.

“It was like my heart was going to come out of my body,” Several immigration attorneys reached by Reuters said they had seen similar expedited reunions following a July 10 order by U.S. District Judge Dana Sabraw in a case brought against the government by the American Civil Liberties Union. The judge had previously ordered the government to reunify by July 26 as many as 2,500 immigrant children it had separated from their parents at the U.S.-Mexico border in recent months. The separations were part of President Donald Trump’s efforts to crack down on illegal immigration, though some of the separated families are also asylum seekers. That policy was abandoned in June in the wake of widespread protests.

On July 10, after examining how an initial wave of reunifications of young children had gone, Sabraw concluded that government vetting policies could be streamlined to speed the process. Reunifications should not be delayed by “lengthy background checks,” the judge wrote, noting that such checks would not have been performed if the parents and children had never been separated.

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Spain is going to be the no. 1 destination.

Spain Saves Over 340 Migrants At Sea, One On Truck Tyre (AFP)

Spanish rescuers saved more than 340 migrants in the Mediterranean on Saturday (July 14), including one person from north Africa who was attempting the crossing on board a truck tyre, they said. Salvamento Maritimo, Spain’s coastguards, said their ships had rescued 240 people spread out in 12 boats, 10 of them in the Strait of Gibraltar and two others in the Alboran Sea, and on the truck tyre. A spokesman added that the Guardia Civil police force had also saved more than 100 migrants in the Mediterranean. Spain is set to overtake Italy as the country of choice for migrants trying to reach Europe.

Some 16,902 people have arrived in Spain so far this year, the International Organization for Migration’s most recent figures show, and a further 294 died in the attempt. All in all, more than 1,400 migrants have lost their lives in the Mediterranean this year, they add. Last month, Spain also agreed to take in 630 migrants who arrived aboard three vessels, including the French NGO rescue ship Aquarius.

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The EU is conspicuously silent on this.

450 Migrants Stranded At Sea As Italy, Malta Dig Heels In (AFP)

Another 450 migrants on board two military vessels were stranded at sea on Saturday as Italy and Malta locked horns over whose responsibility it was to offer them safe harbour. The boats, which are currently in Italian waters, had initially set sail from Libya in a single wooden vessel which was identified early Friday while passing through waters under Malta’s jurisdiction. But Italy’s far-right Interior Minister Matteo Salvini, who has authority over the country’s ports, on Friday refused to let them dock in his latest show of intransigence over migrants stranded at sea. And on Saturday, as those on board were transferred to two other vessels, he insisted the boats be instructed to “head south, to Libya or Malta”.

“We need an act of justice, of respect and of courage to fight against these human traffickers and generate a European intervention,” he said in talks with Prime Minister Giuseppe Conte, his remarks carried by Italian news agencies. In an exchange of messages, emails and phonecalls on Friday, Rome had tried to push Valetta to take responsibility for those on board the wooden boat. But Malta said the ship was much closer to the Italian island of Lampedusa, insisting that those on board only wanted to reach Italy. On Saturday morning, they were transferred to two military vessels but where the vessels will dock remains unclear. Eight women and children were taken to Lampedusa for medical treatment. The new standoff kicked in just hours after 67 migrants were allowed to disembark from an Italian coast guard ship in Sicily late on Thursday.

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A thousand ways to track you.

Mobile Phones Are ‘The Best Spying Device You Can Imagine’ (CNBC)

Could someone be tracking you as you drive around your city or town? You may think turning off your smartphone’s location will prevent this, but researchers from Northeastern University in Boston found that isn’t always the case. “Not a lot of people are aware of this problem. Mainly because when we think about location, we associate it with the GPS on the phone,” said Sashank Narain a postdoctoral researcher at Northeastern. In a test, Narain and his team were able to track people driving through Boston, Waltham, Massachusetts, and London. Traditional locators, like GPS were turned off — so the researchers used other sensors. “The goal of our project is to make people aware that vulnerabilities such as these exist, and they should be taken care of,” Narain added.

Guevara Noubir, a professor at Northeastern University who was involved in the research and also directs Northeastern’s Cybersecurity & Information Assurance Graduate Program, told CNBC that “there’s a whole area, what’s called the side channel attacks, where you use side information to infer something that can have an impact on security,” and specifically, privacy. Using Android phones running Google’s operating system, the researchers did the tracking using sensors in smartphones that were not designed to track location. Those tools included an accelerometer, which tracks how fast a phone is moving, a magnetometer, which works like a digital compass, and a gyroscope, which tracks rotation. These sensors are responsible for things like changing the screen orientation from horizontal to vertical when the phone is moved.

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“No matter their embedded biases, technologies are declared neutral.”

The Wealthy Are Plotting To Leave Us Behind (Rushkoff)

[..] the more devastating impacts of pedal-to-the-metal digital capitalism fall on the environment and global poor. The manufacture of some of our computers and smartphones still uses networks of slave labor. These practices are so deeply entrenched that a company called Fairphone, founded from the ground up to make and market ethical phones, learned it was impossible. (The company’s founder now sadly refers to their products as “fairer” phones.) Meanwhile, the mining of rare earth metals and disposal of our highly digital technologies destroys human habitats, replacing them with toxic waste dumps, which are then picked over by peasant children and their families, who sell usable materials back to the manufacturers.

This “out of sight, out of mind” externalization of poverty and poison doesn’t go away just because we’ve covered our eyes with VR goggles and immersed ourselves in an alternate reality. If anything, the longer we ignore the social, economic, and environmental repercussions, the more of a problem they become. This, in turn, motivates even more withdrawal, more isolationism and apocalyptic fantasy — and more desperately concocted technologies and business plans. The cycle feeds itself. The more committed we are to this view of the world, the more we come to see human beings as the problem and technology as the solution.

The very essence of what it means to be human is treated less as a feature than bug. No matter their embedded biases, technologies are declared neutral. Any bad behaviors they induce in us are just a reflection of our own corrupted core. It’s as if some innate human savagery is to blame for our troubles. Just as the inefficiency of a local taxi market can be “solved” with an app that bankrupts human drivers, the vexing inconsistencies of the human psyche can be corrected with a digital or genetic upgrade.

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Nov 062017
 
 November 6, 2017  Posted by at 9:47 am Finance Tagged with: , , , , , , , ,  


Salvador Dalí Figure at a window 1925

 

The Next Market Cleanse Will Be Sharp, Deep, Fast (Peters)
Round-Up Of Saudi Princes, Businessmen Widens, Travel Curbs Imposed (R.)
Saudi Arabia Seals Yemen Borders, Accuses Iran Over Missile Strike (AFP)
Paradise Papers Leak Reveals Secrets Of The World Elite’s Hidden Wealth (G.)
Are We Taming Offshore Finance? (BBC)
Queen’s Private Estate Invested Millions of Pounds Offshore (G.)
UK Families Thousands Of Pounds Worse Off After Years Of Cuts (G.)
Britain ‘Would Be Booming’ If It Wasn’t For Brexit – Mark Carney (Tel.)
Most EU Firms Plan Retreat From UK Suppliers (R.)
UK Ministers ‘Could Be In Contempt Of Parliament Over Brexit Papers’ (G.)
China’s Shadow Banking Halts as Regulation Bites – Moody’s (BBG)
Catalonia’s Puigdemont Conditionally Released By Belgian Judge (G.)

 

 

Eric Peters gets points for style.

The Next Market Cleanse Will Be Sharp, Deep, Fast (Peters)

Anecdote: “The most common example is a ball sitting atop a hill,” she said, polished accent, hint of condescension. “Locally stable, but one nudge and it’s all over.” She drove terribly fast, discussing Minsky Moments; the idea that persistent stability breeds instability. “Naturally each cycle is different in key respects, and that’s because you’re far better at preventing past problems from recurring than new ones from arising.” I smiled, amused, insulted. “Despite knowing this all too well, you humans remain inexplicably fixated on the rearview mirror. And this blinds you to all manner of hazards ahead.”

She initiated a few perfect turns of the Tesla, dodging a squirrel or two, tumbling, unhurt. “The source of instability in this cycle is your dissatisfaction with ultra-low bond yields.” $8trln of sovereign debt carries a negative yield, still our central bankers buy. “You should logically respond to this historic rise in valuations across asset classes with a reduction in your expectations for future returns.” I nodded. “But instead you respond with indignation.” So I explained to her that without robust growth and a compounding stream of uninterrupted 7.5% returns, our entitlement systems will implode. They probably will anyway. And lacking the stomach for an honest accounting of this predicament, we prefer to pretend it doesn’t exist.

“Is this humor or sarcasm?” she asked. “Both,” I answered. “Fascinating, anyhow, you then demand that we algorithms produce mathematically impossible returns. So we apply leverage, which makes nearly anything possible, even at valuations that are 99th percentile in all of human history. The more leverage we apply, the more stable your system appears. The flatter your hilltop. Naturally, we ensure that today’s leverage looks different from yesterday’s disaster, recognizing your powerful aversion to repeating recent mistakes.” And I stared out the window, lost in thought, fall’s kaleidoscope whizzing by.

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Not done yet.

Round-Up Of Saudi Princes, Businessmen Widens, Travel Curbs Imposed (R.)

An anti-corruption probe that has purged Saudi Arabian royals, ministers and businessmen appeared to be widening on Monday after the founder of one of the kingdom’s biggest travel companies was reportedly detained. Shares in Al Tayyar Travel plunged 10 percent in the opening minutes of trade after the company quoted media reports as saying Nasser bin Aqeel al-Tayyar, who is still a board member, had been held by authorities. The company gave no details but online economic news service SABQ, which is close to the government, reported Tayyar had been detained in an investigation by a new anti-corruption body headed by Crown Prince Mohammed bin Salman.

Dozens of people have been detained in the crackdown, which has consolidated Prince Mohammed’s power while alarming much of the traditional business establishment. Billionaire Prince Alwaleed bin Talal, Saudi Arabia’s best-known international investor, is also being held, officials said at the weekend. The front page of Okaz, a leading Saudi newspaper, challenged businessmen on Monday to reveal the sources of their assets, asking: “Where did you get this?” in a bright red headline. Pan-Arab newspaper Al-Asharq Al-Awsat reported that a no-fly list had been drawn up and security forces in some Saudi airports were barring owners of private jets from taking off without a permit.

Among those detained are 11 princes, four ministers and tens of former ministers, according to Saudi officials. The allegations against the men include money laundering, bribery, extorting officials and taking advantage of public office for personal gain, a Saudi official told Reuters. Those accusations could not be independently verified and family members of those detained could not be reached. A royal decree on Saturday said the crackdown was in response to “exploitation by some of the weak souls who have put their own interests above the public interest, in order to, illicitly, accrue money”.

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The big fear is that it’s all a set-up to go after Iran. Which just signed a $30 billion energy deal with Russia.

Saudi Arabia Seals Yemen Borders, Accuses Iran Over Missile Strike (AFP)

The Saudi-led coalition battling Shiite Huthi rebels in Yemen closed the country’s air, sea and land borders Monday and accused Iran of being behind a weekend missile attack on Riyadh, saying it “may amount to an act of war”. Saudi Arabia intercepted and destroyed the ballistic missile, which was launched from Yemen as rebels appeared to escalate hostilities, near Riyadh’s international airport on Saturday. The missile was the first aimed by the Shiite rebels at the heart of the Saudi capital, underscoring the growing threat posed by the raging conflict. “The leadership of the coalition forces therefore considers this… a blatant military aggression by the Iranian regime which may amount to an act of war,” the official Saudi news agency SPA said in a statement.

Smouldering debris landed inside the King Khalid International Airport, just north of Riyadh, after the missile was shot down but authorities reported no major damage or loss of life. Yemen’s complex war pits the Saudi-backed government of President Abedrabbo Mansour Hadi against former president Ali Abdullah Saleh and his Iran-backed Huthi rebel allies. The Saudi statement said that the borders were being closed “to fill the gaps in the inspection procedures which enable the continued smuggling of missiles and military equipment to the Huthi militias loyal to Iran in Yemen”. Despite the temporary closure of the air, sea and land ports, Saudi would protect “the entry and exit of relief and humanitarian personnel”. “The coalition… affirms the kingdom’s right to respond to Iran at the appropriate time and in the appropriate form,” it added.

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Most of this is legal. But what are the Queen, Bono, Trudeau thinking?

Paradise Papers Leak Reveals Secrets Of The World Elite’s Hidden Wealth (G.)

The world’s biggest businesses, heads of state and global figures in politics, entertainment and sport who have sheltered their wealth in secretive tax havens are being revealed this week in a major new investigation into Britain’s offshore empires. The details come from a leak of 13.4m files that expose the global environments in which tax abuses can thrive – and the complex and seemingly artificial ways the wealthiest corporations can legally protect their wealth. The material, which has come from two offshore service providers and the company registries of 19 tax havens, was obtained by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with partners including the Guardian, the BBC and the New York Times. The project has been called the Paradise Papers. It reveals:

• Millions of pounds from the Queen’s private estate has been invested in a Cayman Islands fund – and some of her money went to a retailer accused of exploiting poor families and vulnerable people. • Extensive offshore dealings by Donald Trump’s cabinet members, advisers and donors, including substantial payments from a firm co-owned by Vladimir Putin’s son-in-law to the shipping group of the US commerce secretary, Wilbur Ross. • How Twitter and Facebook received hundreds of millions of dollars in investments that can be traced back to Russian state financial institutions. • The tax-avoiding Cayman Islands trust managed by the Canadian prime minister Justin Trudeau’s chief moneyman. • A previously unknown $450m offshore trust that has sheltered the wealth of Lord Ashcroft.

• Aggressive tax avoidance by multinational corporations, including Nike and Apple.• How some of the biggest names in the film and TV industries protect their wealth with an array of offshore schemes. • The billions in tax refunds by the Isle of Man and Malta to the owners of private jets and luxury yachts.• The secret loan and alliance used by the London-listed multinational Glencore in its efforts to secure lucrative mining rights in the Democratic Republic of the Congo. •The complex offshore webs used by two Russian billionaires to buy stakes in Arsenal and Everton football clubs.

The disclosures will put pressure on world leaders, including Trump and the British prime minister, Theresa May, who have both pledged to curb aggressive tax avoidance schemes. The publication of this investigation, for which more than 380 journalists have spent a year combing through data that stretches back 70 years, comes at a time of growing global income inequality. Meanwhile, multinational companies are shifting a growing share of profits offshore – €600bn in the last year alone – the leading economist Gabriel Zucman will reveal in a study to be published later this week. “Tax havens are one of the key engines of the rise in global inequality,” he said. “As inequality rises, offshore tax evasion is becoming an elite sport.”

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No. Hell no.

Are We Taming Offshore Finance? (BBC)

The offshore finance industry puts trillions of dollars worldwide beyond the taxman’s reach. Bringing it to heel is like taming a cat; not just a normal moggy – a thankless task in itself – but a Cheshire Cat: nebulous, hard to pin down, disappearing and reappearing when it likes. No-one can actually agree on what a tax haven is. Or even on the name: one person’s tax haven is another’s “offshore financial centre”. No-one can agree on how many there are. Nor on exactly how much money is stashed offshore. No statistics are fully reliable. And this suits those who operate in offshore finance, from the owner of the wealth to the lawyer or accountant middlemen who manage the funds, to the often sun-kissed beaches of the jurisdictions where they are secluded or pass through. The industry’s key word is privacy. Or secrecy – a word it doesn’t like so much.

One adage cited by the taxation author and expert Nicholas Shaxson sums it up: “Those who know don’t talk. And those who talk don’t know.” But do we really not know how much is stashed offshore? A report this September, co-authored by the economist Gabriel Zucman, estimates about 10% of global GDP – the way we measure the size of the world’s economy – is held offshore, about $7.8tn (£6tn) . The Boston Consulting Group reported it last year at about $10tn. If you are thinking, wow, that’s bigger than Japan’s economy, you’d be right. But if you want a real wow, try $36tn – the estimate offered by James Henry, author of the book Blood Bankers. That’s twice as big as the US economy.

But no-one really knows. And here’s another wow. Remember the slogan “we are the 99%” coined by the Occupy movement to lambast the top 1% of the population for their disproportionate share of wealth? Well, the Zucman report says 80% of all offshore cash is owned by 0.1% of the richest households, with 50% held by the top 0.01%. So if you read this and are thinking, if you can’t beat them… quite frankly, it’s unlikely you will ever join them.

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This cannot be. Many Britons are miserable, and their Queen dodges taxes. As someone suggested, she should go live where her money is stashed.

Queen’s Private Estate Invested Millions of Pounds Offshore (G.)

Millions of pounds from the Queen’s private estate has been invested in a Cayman Islands fund as part of an offshore portfolio that has never before been disclosed, according to documents revealed in an investigation into offshore tax havens. Files from a substantial leak show for the first time how the Queen, through the Duchy of Lancaster, has held and still holds investments via funds that have put money into an array of businesses, including the off-licence chain Threshers, and the retailer BrightHouse, which has been criticised for exploiting thousands of poor families and vulnerable people. The duchy admitted it had no idea about its 12-year investment in BrightHouse until approached by the Guardian and other partners in an international project called the Paradise Papers.

Though the duchy characterised its stake in BrightHouse as negligible, it would not disclose the size of its original 2005 investment, which coincided with a boom in the company’s value. BrightHouse has since been accused of overcharging customers, and using hard sell tactics on people with mental health problems and learning disabilities. Last month, it was ordered to pay £14.8m in compensation to 249,000 customers. Critics are likely to ask why the Queen had money in there in the first place, and the duchy may face awkward questions about whether there was enough oversight and management of the Queen’s “onward investments” to ensure they remained ethical. The duchy has also disclosed investments in “a few overseas funds”, including one in Ireland, and will be under pressure to give details of where the money is being held.

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This is Britain’s reality….

UK Families Thousands Of Pounds Worse Off After Years Of Cuts (G.)

Seven years of cuts to tax credits and universal credit have hugely eroded their role in supposedly rewarding people for working, leaving many families thousands of pounds a year worse off, a study has concluded. Ministers’ promises that the systems would benefit families for taking on more work had effectively been broken because of the cuts, according to the report by the Child Poverty Action Group (CPAG) and the Institute for Public Policy Research thinktank. The study, titled Austerity Generation, details what it says are the huge numbers of families with children pushed into poverty due to cuts and freezes to benefits, as well as measures such as the new two-child limit for payments. It calls for the chancellor, Philip Hammond, to tackle the issue in next month’s budget by restoring previous levels of universal credit work allowances, the amount of monthly income that can be earned without penalty. These were cut in April 2016.

It also seeks a pension-style triple lock of the child benefit and child credit element of universal credit, ensuring it kept pace with prices and earnings. This alone, the report argues, would keep 600,000 children out of poverty. Introduced in 2003, working tax credits are intended to top up low earnings. It is among a series of benefits replaced by universal credit, which is gradually being rolled out nationally and is intended to incentivise working. But, according to the report, cuts have eroded much of this effect for families. It calculates that a couple with two young children, one working full-time and the other part-time on the national living wage, will lose more than £1,200 a year due to universal credit cuts. Another example given is that of a single parent with two young children who starts work at 12 hours a week on the national living wage and will have an effective hourly wage of £4.18, as opposed to £5.01 before the cuts.

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… and this is what its central bank chief thinks it is instead.

Britain ‘Would Be Booming’ If It Wasn’t For Brexit – Mark Carney (Tel.)

Britain’s economy would be “booming” if not for Brexit, the Governor of the Bank of England has said. Mark Carney said businesses were waiting for the outcome of Theresa May’s negotiations with the EU before making investment decisions, which was slowing down economic growth. He said the bank’s predictions for foreign investment in Britain was now 20 per cent lower than they estimated in the month before the referendum. Speaking to Peston on Sunday, he said: “Since the referendum, what we’re seeing is that business investment has picked up, but it hasn’t picked up to any of the extent that one would have expected given how strong the world is, how easy financial conditions are, how high profitability is and how little spare capacity they have. Despite acknowledging the strength of economy, Mr Carney warned: “It should really be booming, but it’s just growing.

“I think we know why that’s the case, because they’re waiting to see the nature of the deal with the European Union. “It’s the most important investment destination and [businesses] need to know transition and end state, everybody knows this, the government knows it and is working on it, UK businesses know it and the Europeans know it.” Asked if the economy would take a hit if the UK left the EU without a Brexit deal, he said: “In the short term, without question, if we have materially less access (to the EU’s single market) than we have now, this economy is going to need to reorient and during that period of time it will weigh on growth.” He added that in the event of a bad Brexit deal, the bank would not be able to cut future interest rates because of that inflationary pressure.

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Uncertainty.

Most EU Firms Plan Retreat From UK Suppliers (R.)

Most European businesses plan to cut back orders from British suppliers because of the slow progress of Brexit talks, a survey of company managers showed on Monday. 63% of non-British European companies expect to move some of their supply chain out of Britain, up from 44 percent in May, the Chartered Institute of Procurement and Supply (CIPS) said. With only 17 months left until Britain is due to exit the EU, the lack of clear progress in the negotiations has raised fears among executives of an abrupt departure with no transition. Monday’s survey raised the prospect of disruption for British manufacturers with EU clients. On Sunday, the Confederation of British Industry said almost two in three British firms will have implemented Brexit contingency plans by March if Britain and the rest of the EU have not struck a transitional deal by then.

Britain and the EU said last week they were ready to speed up talks, but CIPS said it was already too late for scores of businesses that look likely to be dropped by European customers. “British businesses simply cannot put their suppliers and customers on hold while the negotiators get their act together,” said Gerry Walsh, CIPS’ group CEO. “The lack of clarity coming from both sides is already shaping the British economy of the future – and it does not fill businesses with confidence.” British finance minister Philip Hammond said last month that a transition deal needed to be struck by early 2018. CIPS said a fifth of British businesses were struggling to secure contracts that extend beyond March 2019, the date Britain is due to leave the EU.

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“Offenders can also theoretically be confined to a room in the Big Ben clock tower, although this power has not been used since 1880.”

UK Ministers ‘Could Be In Contempt Of Parliament Over Brexit Papers’ (G.)

Labour is to warn ministers on Monday that they risk being held in contempt of parliament if they do not immediately release dozens of papers outlining the economic impact of Brexit. The government conceded last week that it had to publish the 58 studies covering various parts of the economy after the move was supported in a Labour opposition motion that was passed unanimously on Wednesday. While normal opposition motions are advisory, Labour presented this one as a “humble address”, a rare and antiquated procedure which the Speaker, John Bercow, advised was usually seen as binding. The leader of the Commons, Andrea Leadsom, said on Thursday that the government accepted the motion as binding, and that “the information will be forthcoming”.

However, she gave no timescale – the government has previously said it will respond to opposition motions within 12 weeks – and indicated some elements of the papers would need to be redacted to avoid “disclosing information that could harm the national interest”. The Labour motion called for the papers to be released immediately to the Brexit select committee, which has a majority of Conservative MPs, and which would then decide what elements should not be published more widely. The shadow Brexit secretary, Keir Starmer, has warned that Labour will refer the matter to Bercow over possible contempt if the studies are not passed to the committee before parliament’s one-week recess begins on Tuesday.

The parliamentary rulebook, known as Erskine May after its 19th-century author, says actions that obstruct or impede the Commons “in the performance of its functions, or are offences against its authority or dignity, such as disobedience to its legitimate commands” be can viewed as contempt. MPs held in contempt can be asked to apologise, suspended or even expelled by their fellows. Offenders can also theoretically be confined to a room in the Big Ben clock tower, although this power has not been used since 1880.

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Yeah, yeah, but: “core shadow banking activity,” including entrusted loans, trust loans, and undiscounted bankers’ acceptances, continues to expand…”

China’s Shadow Banking Halts as Regulation Bites – Moody’s (BBG)

China’s shadow banking sector, estimated by some analysts to be worth 122.8 trillion yuan ($18.5 trillion), stopped growing in the first half of the year as issuance of wealth management products declined, according to Moody’s Investors Service. For the first time since 2012, China’s gross domestic product grew faster than shadow banking assets in the six-month period, Moody’s said in a statement Monday. Following last month’s Communist Party Congress, further regulation will continue to rein in shadow banking and address some of the key systemic imbalances, Moody’s said. While Moody’s assessment offers some evidence that China’s crackdown on shadow financing is starting to bite, authorities continue to sound the alarm on high debt levels.

In an article on the People’s Bank of China’s website late Saturday, Governor Zhou Xiaochuan pointed to latent risks that are “hidden, complex, sudden, contagious and hazardous.” Government, household and corporate debt adds up to about 260 percent of the economy, according to Bloomberg Intelligence. Moody’s said that shadow banking assets accounted for 83 percent of GDP on June 30, down from a peak of 87 percent in 2016. Michael Taylor, the company’s chief credit officer for the Asia-Pacific region, said “core shadow banking activity,” including entrusted loans, trust loans, and undiscounted bankers’ acceptances, continues to expand even as regulation has had an effect.

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The pressure on the judge(s) must be deafening.

Catalonia’s Puigdemont Conditionally Released By Belgian Judge (G.)

A Belgian judge has released the ousted Catalan leader, Carles Puigdemont, and four of his ministers under certain conditions after a hearing lasting more than 10 hours. Puigdemont, who faces charges of misuse of public funds, disobedience and breach of trust relating to the secessionist campaign, turned himself in to Belgian police earlier on Sunday. The judge decided to grant them conditional release late in the evening pending a ruling by a court within the next 15 days whether to execute the European arrest warrant issued by Spain. The five have been told they must not leave the country and stay in a fixed address. “The request made by the Brussels’ Prosecutor’s Office for the provisional release of all persons sought has been granted by the investigative judge,” a statement from the federal prosecutor’s office said.

On Friday, the Spanish government had issued European arrest warrants against Puigdemont, Antoni Comín, Clara Ponsatí, Meritxell Serret and Lluís Puig for trying to “illegally change the organisation of the state through a secessionist process that ignores the constitution”. The formal charges, punishable by 30 years in prison, are rebellion, sedition, embezzlement of public funds and disobedience to authority, for their role in organising the referendum on Catalan independence on 1 October. The secessionist politicians fled to Belgium on Monday after the Spanish authorities removed Puigdemont and his cabinet from office for pushing ahead with a declaration of independence following an illegal referendum. From his self-imposed exile, Puigdemont claimed he would not receive a fair trial in Spain but promised to cooperate with the Belgian justice system.

[..] In a sign of the growing headache the crisis is causing the Belgian coalition government, the country’s deputy prime minister, Jan Jambon, from the Flemish nationalist party, questioned Spain’s handling of the crisis in Catalonia and suggested the EU should intervene. “When the police hit people, we can still ask questions,” he said. “When the Spanish state has locked two opinion leaders, I have questions. And now the Spanish government will act in the place of a democratically elected government? “Members of a government are put in prison. What have they done wrong? Simply apply the mandate they received from their constituents.”

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Jul 222017
 
 July 22, 2017  Posted by at 1:18 pm Finance Tagged with: , , , , , , ,  


Hieronymus Bosch Adoration of the Magic c1472

 

So sorry to see Sean Spicer go, even if I never watch TV, so I only got snippets of his acting performances -and Melissa McCarthy’s. One of the very few SNL and other ‘comedy’ shows skids that was actually funny, in the same way that very few of the New York Times and Washington Post ‘articles’ on Trump have been actually news.

As I wrote to a friend earlier today, sure Spicer’s gone, but there’ll be other entertaining characters to replace him. Say what you will about the Trump administration, but never a dull moment. Having Mike Pence become president would kill all the fun.

Sad!

Scaramucci is a great start to phase 2. Or is that 22? The guy’s a Wall Street pawn who badmouthed Da Donald not long ago. Moreover, says a Daily Beast headline, “Anthony Scaramucci Loved Hillary, Gave to Obama, and Deleted Anti-Trump Tweets”.

Wonderful!

Now I know the White House should not really be a theater, but hey, it already is, so we might as well make the best of it. And the name Scaramucci alone carries so much promise. Not only because of the Queen line from Bohemian Rhapsody, but also because of, as Wikipedia puts it:

Scaramouch. 1660s, name of a cowardly braggart (supposed by some to represent a Spanish don) in traditional Italian comedy, from Italian Scaramuccia, literally “skirmish,” from schermire “to fence,” from a Germanic source (cf. Old High German skirmen “defend”); see skirmish (n.).

and

Scaramuccia (literally “little skirmisher”), also known as Scaramouche or Scaramouch, is a stock clown character of the Italian commedia dell’arte. The role combined characteristics of the zanni (servant) and the Capitano (masked henchman).

A cowardly braggart! There is so much promise there. And theater, tragedy, drama, entertainment. Look, that’s what Shakespeare made of politics, and many others did too, so maybe we should just get used to it. It’s not all that new, kings and queens and power hungry sociopaths have been the subjects of plays and worse for ages. When you see anything Trump, think Shakespeare. Give it the proper historical context.

Think Macbeth. Think King Lear. Think Trump.

Think:

I see a little silhouetto of a man
Scaramouche, Scaramouche, will you do the Fandango?
Thunderbolt and lightning, very, very fright’ning me
(Galileo.) Galileo. (Galileo.) Galileo. Galileo figaro magnifico
I’m just a poor boy, nobody loves me
He’s just a poor boy from a poor family
Spare him his life from this monstrosity..

 

 

May 072017
 
 May 7, 2017  Posted by at 6:46 pm Finance Tagged with: , , , , , , , , ,  


J.M.W. Turner Old London Bridge 1794

 

The French election, won just now by Emmanuel Macron, put several segments of the French population opposite one another in a pretty fierce contest. And that contest will continue. Because Macron won’t be able to lift the French economy out of its doldrums any more than Le Pen could have, or than Trump can life the US, and the new president will have the honor of presiding over a further and deepening downturn. The French political dividing line was aptly described by Simon Kuper recently:

The ultra-nationalist writer Charles Maurras believed there were “two Frances”. The one he loved was the “pays réel”, the real country: a rural France of church clocks, traditions and native people fused with their ancestral soil. Maurras loathed the “pays légal”, the legal country: the secular republic, which he thought was run by functionaries conspiring for alien interests.

Maurras was born in 1868 and died in 1952. But if he returned on Sunday to witness the French presidential run-off, he would instantly recognise both candidates. He would cast Emmanuel Macron as the incarnation of the “legal France” and Marine Le Pen as embodying the “real” one.

Maurras may have been a questionable character, but that description is not half bad. Once enough people in the country understand the failure of ‘legal’ France, they will want ‘real’ France back. That will be true in countries all over Europe; to a large extent it already is. Marine Le Pen summed up the key issue really well a few days ago when she said of the country post election: “France will be led by a woman, me or Mrs. Merkel.”

There is only one reason the French people would ever tolerate Germany having an outsized influence in their politics and economics: that they feel they benefit from it financially. And yes, if you put it that way, it’s already quite something that they haven’t revolted more and earlier.

The generous unemployment benefits are undoubtedly part of that. But those can’t last. And since the Germans owe their influence in Paris to the EU, it’s obvious how the French will feel they can stop that influence. And then the EU will turn out to be not a peacemaker, but the opposite.

 

Still, as much as France is divided, and as serious as that division is, the country is a shining beacon of unity compared to the UK, where the dividing lines are as manifold as they are laced with toxins. The snap election PM Theresa May called, in just over a month, can do nothing to resolve any of it. That means the EU can do what they want in the Brexit negotiations. Which will therefore be an unparalleled disaster for May and the UK.

The EU can and will ‘have its way’ with the UK for one simple reason: the United Kingdom is anything but United. It makes no difference what the EU does to the UK, the British won’t blame them for it. They will blame each other instead. No matter what happens these days, the British always know in advance who’s to blame, and it’s never themselves; it’s always another group of Brits.

The Tories are deeply divided between pro- and anti-Brexit forces. Labour is divided along those same lines, and adds pro- and anti-Corbyn sentiments for good measure. Other parties don’t really matter much, but they have similar dividing lines as well.

Anti-Corbyn Labour MPs have convinced themselves they know better than pro-Corbyn party members. They’ve kept claiming for so long that Corbyn is unelectable it’s become a self-fulfilling prophecy. They’ll be lucky not to face the fate of their former brethren in François Hollande’s Parti Socialiste, who ended up with just 6% of the vote in the 1st round of the French elections.

PM Theresa May called the snap election for June 8 to hide some of the divisions behind, to make them appear less relevant, or even to profit from them and grab more power. But the very fact that Brexit was voted in, already makes the election nigh irrelevant.

Whoever wins, and it looks certain to be May herself. will open themselves to being scapegoated in a big way. Which won’t keep them from seeking victory, because the loser can expect the same fate. The trenches have been dug, and deeply. Governable? Don’t count on it. It feels more like 40 years later we’re back to Johnny Rotten ‘singing’ Anarchy in the UK.

 

If May threatens to leave the EU ‘cold’ and trigger a ‘Hard Brexit’, she will simultaneously trigger a whole lot more, and much wider, divisions in the country (or is that countries?!), and that’s even without mentioning an entire minefield of legal, and potentially constitutional, issues. The latter especially because Britain doesn’t have an actual -written- constitution.

For Brussels, it’s easy pickings, and pick they will. This week, they casually raised the UK’s cost of leaving the EU to €100 billion, from estimates varying from €40 billion to €60 billion before. Paddy Power and its equally powerful bookie ilk soon won’t be taking any bets below, say, €150 billion. In that regard, and many others, the EU will do to the UK what it is doing to Greece.

The only way to stand up against that is to show a common front. But there will be no such thing in the Divided Kingdom, not for a long time. Everyone has their favorite scapegoat, for some it’s Nigel Farage, for others David Cameron, George Osborne, Tony Blair, Jeremy Corbyn or Theresa May. And nobody is going to leave their blame trenches. They’re the only places they feel somewhat comfortable, less scared, in.

 

Theresa May, if the polls are to be believed -and given the divisions we might for once-, will have to sit down and negotiate with the multi-headed Hydra that is the EU, ‘strengthened’ by a major election victory, but she will find it the ultimate Pyrrhic victory, because Brussels will have a ball playing her divided ‘nation’.

Scotland can probably easily be seduced with the carrot of EU membership, but more importantly, Juncker and his people can cast doubt on the entire Brexit vote, and they will have many interested takers.

The Brexit negotiations will take at least 2 years. But it could be 3 or 4 years, who knows? May has no power over that duration, unless she walks. She won’t. And as things are drawn out, Juncker et al have all the time and opportunities they want to tell both May and the British public that Brussels has no intention of punishing them, but will have to do so anyway.

After all, Brexit is a threat to the entire European project, and all the leaders of the 27 remaining nations, as well as the vast majority of their domestic opposition parties, are behind that project, no questions asked. And the many thousands of people working their very well-paid jobs in Brussels and Strasbourg are not too critical either.

All in all, the British need to wake up and smell the roses as long as there are any left, and before they have been replaced with less savory odors. Or they will have to seriously wonder whether the Kingdom, united or not, can outlive the Queen, aka the London Bridge.

 

 

“London Bridge is Down” was recently revealed as the secret UK government code for the moment the Queen dies.