Apr 282018
 
 April 28, 2018  Posted by at 12:20 pm Finance Tagged with: , , , , , , , ,  


Alberto Giacometti Tête Noire 1957

 

Trump Can Come. But Let Him Know Britain Won’t Stand For His Bigotry, is the headline of an article for the Guardian by Owen Jones. It’s just one of many articles, and one of many ways, I could use to point out what’s wrong in our world. In a TV appearance on ITV he apparently added:

“At the end of the day, if he comes – no one is saying he should be barred from the country by legal means – we’re saying we will take to the streets and say we reject racism, bigotry and will stand for the values most people in this country believe in.” Jones went on to insist “most” of the United Kingdom are against President Trump so it was in the country’s best interest to stand up for their beliefs.

That got him a lot of flack from right wing viewers, who see him as ‘far left’. But it doesn’t matter if he’s left or right, he’s just terribly wrong. Because his own country, Britain, is as we speak exposing itself ever more as the racism and bigotry capital of the world. Who then are Britons to protest perceived racism and bigotry in someone who’s not British?

Jones should focus on cleaning up his own pig sty before speaking out about Trump, because if he doesn’t, he himself is a bigot. As are all his fellow countrymen and women who are planning to protest with him on Friday July 13 when Trump visits. You really think you don’t have enough to do at home? Or are you just trying to divert attention away from that?

 

I don’t want to read Jones’s article, because I already know what’s in it. Jones is part of the echo chamber that feeds off itself on a 24/7 basis with every word Trump speaks and every move he makes. Why read any of it anymore? The problem of course is that the chamber has made any and all constructive discussion impossible about all things Trump that badly do need such discussion.

And not only do they increasingly lose the fake discussion they try to energize all the time, they are giving birth to a whole new development that expresses a deep fatigue with the echo chamber and its machinery. Not based on left vs right, but on echoes vs thinking.

We find that the Democrats routinely rig their own primaries, and Nancy Pelosi isn’t even trying to deny it. Upcoming lawsuits, discovery and investigations will reveal ever more not-so-fine details about the Dems. And then they will end up in the same position as Owen Jones: clean up after your own pigs first, and then perhaps you can speak.

 

So what do we -predictably- get on the heels of this? We get people who are ‘supposed’ to be in the echo chamber, but escape from it. Too deafening, too blinding to think for one’s own. We get Candace Owens and Kanye West, who only have to cast a sliver of doubt on their supposed roles of “every black person must vote for Hillary, and denounce Trump”. Or else.

We get writers like Caitlin Johnstone and Jim Kunstler, themselves miles removed from anything right-wing, expressing the hope they derive from Kanye et al. Simply because what he says doesn’t emanate from the NYT-WaPo-CNN cacophony. People who like me would much rather address where Trump goes wrong, but find that as soon as they do, their words are sucked up by, and lost within, that same cacophony.

Which has monopolized the discussion, and thereby made it impossible. There is no space for our voices, no space for nuance, no space for questions. They’ll come after Kanye with all they got, but they must be careful. If the Dems lose the black vote, they’re done and toast, and going after Kanye will look a lot like going after all blacks. They can try and channel Obama, but would he dare go after Kanye?

Whose message, in no more than few handfuls of words, is simple: love conquers all. Or in old Jamaican: Live it Up and Love it Up. How do you credibly attack that? Even if he uses those words to support Trump? It won’t be easy. And then they will see more prominent black voices sound sympathetic to Kanye, and thereby to Trump. Ain’t life a bitch?

Caitlin Johnstone really got stung by the happy fever:

 

Happy New Universe Day

Could something big be in the works? Something which transcends all our little echo chamber walls and ideological boundaries, which comes not from the repetitive thought loops in our minds but from our deep evolutionary drive to survive? I hope so. And call me naive and deluded if you like, but right now I’m seeing plenty of reasons to hope.

 

And Kunstler is not that far behind:

 

Counter-#Resistance?

Speaking as a white cis-hetero mammal, I’m not quite as dazzled by the president, but it’s a relief to see, at last, some small rebellion against the American Stasi who have turned the public arena into a giant holding pen for identity offenders — though it is but one corner of the triad-of-hysteria that also includes the Hate Russia campaign and the crusade against men.

This nonsense has been going on long enough, while the country hurtles heedlessly into a long emergency of economic disarray. Next in line after Kanye and Candace, a popular Twitter critter name of Chance the Rapper endorsed Kanye endorsing Candace, more or less, by tweeting “black people don’t have to be Democrats.”

[..] Of course, the whole Kanye / Candace dust-up may be forgotten by the middle of next week, and the country can go back to gaslighting itself into either a new civil war or world war three. Candace seems to have drive, guts, and stamina and there’s no sign that she’s going to shut up. Won’t some Ivy League university please invite her to speak, just to see what happens?

 

That’s right, resistance against the resistance, and not from some right-wing bunch of nuts. But from people who are fed up with being told what to think and do and write. Kanye and Candace have now become the voices for everyone who’s not completely deaf yet. And it’s in the nick of time.

Did Trump start WWIII? No, the US bombed a few sheds in the desert. Did Trump bring Kim and Moon around the table? He certainly played a major role in that. Should he get a Nobel Peace Prize for that? Hell, why not, they gave one to Henry Kissinger, and Barack Obama. So why not Trump and Xi and Kim Jong-Un?

A new world, a new universe even? Do we need those? But it won’t be “forgotten by the middle of next week” either. There are far too many people who don’t want any steenking echo chamber to tell them what to think anymore. Who see them for the pig sties they are, trampling in their own filth.

 

For Britain to hit the streets to protest Trump’s alleged bigotry, racism, misogyny is so completely nuts it’s hard to find what to say, in view of their own government’s treatment of their own fellow citizens, let alone ‘foreigners’ like the Yemeni’s bombed to shreds with weaponry that same government sells to Saudi Arabia.

If you live in that kind of climate and you think protesting Trump is the thing to do, you probably deserve the government you got. But yes, Britain has a long history of longing to be held superior to other people(s), and the more than longing is shattered, the more they seem to want it. The US is not much different, if at all. The French suffer from it too. A superiority complex born of fear.

That’s what a ‘journalist’ like Owen Jones should be writing about. About how his own people can solve their own problems. Until then, not another word about Trump.

As for America? They have Kanye and Candace and Scott Adams now. That should suffice to help them along on the path to smashing up the echo chambers that cause so much physical and mental damage. Think for yourself. Don’t let a newspaper or TV channel think for you.

As for Trump, you can’t read or watch any story that’s negative about him anymore and think it has credibility. And they did that to themselves, the overpaid NYT/CNN/MSNBC crews. They didn’t need any help.

Meanwhile, all politicians on all sides in both the UK and US are the very people you should least want in their positions. It’s what our political systems determine: sh*t floats to the top. And until we separate politics from money altogether, that’s not going to change.

I’ve always steered clear of that whole Kardashian clan, they make me shiver, and all they stand for. But wouldn’t it be simple logic for them to wind up in the White House? First a game-show host, then a Facebook family? When it comes to that, Britain is far behind.

 

 

Apr 282018
 
 April 28, 2018  Posted by at 8:21 am Finance Tagged with: , , , , , , , , , , , ,  


Edgar Degas At the Milliner’s 1905-10

 

Happy New Universe Day (Caitlin Johnstone)
Counter-#Resistance? (Jim Kunstler)
North Korea Says Historic Summit Opens ‘New Era For Peace’ (AFP)
Jumping The Great White Shark Of Bubble Finance (David Stockman)
Structural Racism At Heart Of British Society, UN Human Rights Panel Says (G.)
Brexit Failure Looks More Likely Every Day (Ritholtz)
Mayday on May Day? Trump Steel Tariff Deadline Looms (R.)
Donald Trump and the Next Crash (Nomi Prins)
US Issues New Warning To China On Its Handling Of Intellectual Property (BBG)
China Is Bolstering Lenders Before A New Assault On Shadow Banking (BBG)
World’s Central Banks Just Can’t Quit on Currency Intervention (BBG)
Hawaii Takes Historic First Step Toward Creating ‘Utility of the Future’ (RE)
Fukushima is Now Officially Worse Than Chernobyl (CP)
EU Votes To Ban Bee-Killing Pesticides (AFP)
The Hills Are Alive With The Signs Of Plastic (G.)

 

 

Kanye brings hope.

Happy New Universe Day (Caitlin Johnstone)

I’m not sure what this is, but it’s definitely different. A bunch of tweets and videos by Mike Cernovich, Scott Adams and Kanye West have been dancing in an unexpected way that has conservatives now talking about a shift in consciousness transforming the way humanity functions in the near future. Liberals and leftists are scoffing at it of course, but it’s definitely a thing, and in my opinion it’s downright fascinating. The MAGA crowd has always impressed me with its ability to energetically and spontaneously unify behind a single theme as a group, like a flock of birds or school of fish changing direction together on a dime. There are certainly worse things they could pour their collaboration into than manifesting a spiritual revolution.

And who the hell am I to say they’re wrong about that? It’s not like we’ve got a choice anyway; either our species will change the way it functions or we’ll wipe ourselves out via nuclear holocaust or climate catastrophe within a few decades, no matter how loudly and smugly we scoff at the guys in MAGA hats. If humanity is going to take a last-ditch, evolve-or-die leap into the unknown and unprecedented, now would surely be the time to do it. If a bunch of right-wingers get it into their heads that humanity is undergoing a spiritual transformation, that certainty could be all it takes to tip us into the shift we all know we need to make anyway.

Could something big be in the works? Something which transcends all our little echo chamber walls and ideological boundaries, which comes not from the repetitive thought loops in our minds but from our deep evolutionary drive to survive? I hope so. And call me naive and deluded if you like, but right now I’m seeing plenty of reasons to hope.

Read more …

“Candace seems to have drive, guts, and stamina and there’s no sign that she’s going to shut up. Won’t some Ivy League university please invite her to speak, just to see what happens?”

Counter-#Resistance? (Jim Kunstler)

Who hit Kanye with that white privilege stick? The rapper / fashion maven / theologian / Kardashian arm candyman sent chills through the Twitterverse when he declared himself, somewhat elliptically, off-the-bus of the Progressive #Resistance movement and an admirer of the Golden One in the Oval Office. This came in his endorsement of YouTube blogger Candace Owen, who happens to not be down with the cause of the national victim lottery. Both Kanye and Candace have apparently crossed some boundary into a Twilight Zone of independent thought. Many probably wonder how they are able to get out of bed in the morning without instructions from Don Lemon.

Speaking as a white cis-hetero mammal, I’m not quite as dazzled by the president, but it’s a relief to see, at last, some small rebellion against the American Stasi who have turned the public arena into a giant holding pen for identity offenders — though it is but one corner of the triad-of-hysteria that also includes the Hate Russia campaign and the crusade against men. This nonsense has been going on long enough, while the country hurtles heedlessly into a long emergency of economic disarray. Next in line after Kanye and Candace, a popular Twitter critter name of Chance the Rapper endorsed Kanye endorsing Candace, more or less, by tweeting “black people don’t have to be Democrats.”

The horror this thought aroused! Slavery, these days, it turns out, has a lot of appeal — maybe not so much for laboring in the canefields under the noonday sun as for serving juleps in the DNC plantation house. It happened that Kanye’s mom was a college professor, Chance’s dad was an aide to Chicago Mayor Daley (Jr.), and later worked in Mr. Obama’s Department of Labor. Candace describes her childhood home in Stamford, CT, as “very poor,” but she rose far-and-fast out of college to become an executive on Wall Street in her twenties. What they seem to have in common is being tainted with bourgeois values, horror again!

[..] I dunno about the perpetually scowling Kanye, with his periodic mood problems and spotlight-stealing antics on stage, or Chance the Rapper’s artificial hood raptures, but Candace makes the argument for the value of a common culture that might bind us together as a nation of individuals, not hostile tribes, starting with a language that everybody can understand. Of course, the whole Kanye / Candace dust-up may be forgotten by the middle of next week, and the country can go back to gaslighting itself into either a new civil war or world war three. Candace seems to have drive, guts, and stamina and there’s no sign that she’s going to shut up. Won’t some Ivy League university please invite her to speak, just to see what happens?

Read more …

Yeah, we’ll have to wait and see. But Kim does what his people want, and more importantly what his father wanted.

North Korea Says Historic Summit Opens ‘New Era For Peace’ (AFP)

North Korea on Saturday hailed its summit with the South as a “historic meeting” that paved the way for the start of a new era, after the two leaders pledged to pursue denuclearisation and a permanent peace. The official KCNA news agency carried the text of the leaders’ Panmunjom Declaration in full and said the encounter opened the way “for national reconciliation and unity, peace and prosperity”. In the document, North Korean leader Kim Jong Un and the South’s President Moon Jae-in “confirmed the common goal of realising, through complete denuclearisation, a nuclear-free Korean Peninsula”. But the phrase is a diplomatic euphemism open to interpretation on both sides.

Pyongyang has long wanted to see an end to the US military presence and nuclear umbrella over the South, but it invaded its neighbour in 1950 and is the only one of the two Koreas to possess nuclear weapons. Analysts warn that previous displays of inter-Korean affection and pledges by the North ultimately came to naught. For years, Pyongyang insisted it would never give up the “treasured sword” of its nuclear arsenal, which it says it needs to defend itself against a possible US invasion. But it has offered to put it up for negotiation in exchange for security guarantees, according to Seoul – although Kim made no public reference to doing so at Friday’s spectacular summit. In a separate report, KCNA said the two leaders had a “candid and open-hearted exchange of views” on issues including “ensuring peace on the Korean Peninsula and the denuclearisation of the peninsula”.

Read more …

“..Fully 96% of Amazon’s $5.0 billion of LTM operating income was accounted for by its cloud services business..”

Jumping The Great White Shark Of Bubble Finance (David Stockman)

Wall Street has now truly jumped the shark – the one jockeyed by Jeff Bezos. Last night Amazon reported a whopping 41% plunge in free cash flow for the March 2018 LTM period compared to prior year. Yet it was promptly rewarded by a $50 billion surge in market cap – with $10 billion of that going to the guy riding topside on the Great White Shark of Bubble Finance. That’s right. Amazon’s relatively meager operating free cash flow for the March 2017 LTM period had printed at $9.0 billion, but in the most recent 12 months the number has slithered all the way down to just $5.3 billion. And that’s where the real insanity begins. A year ago Amazon’s market cap towered at $425 billion – meaning that it was being valued at a downright frisky 47X free cash flow.

But fast forward a year and we get $780 billion in the market cap column this morning and 146X for the free cash flow multiple. Folks, a company selling distilled water from the Fountain of Youth can’t be worth 146X free cash flow, but don’t tell the giddy lunatics on Wall Street because they are apparently just getting started. Already at the crack of dawn SunTrust was out with a $1900 price target – meaning an implied market cap of $970 billion and 180X on the free cash flow multiple. At this point, of course, you could say who’s counting and be done with it. But actually it’s worse – and for both Amazon and the US economy.

That’s because Amazon is both the leading edge of the most fantastic ever bubble on Wall Street and also a poster boy for the manner in which Bubble Finance is hammering growth, jobs, incomes and economic vitality on main street. Moreover, soon enough a collapsing Wall Street bubble will bring the already deeply impaired main street economy to its knees. So Amazon is a double-destroyer. [..] Fully 96% of Amazon’s $5.0 billion of LTM operating income was accounted for by its cloud services business (AWS). The e-Commerce juggernaut, by contrast, posted just $188 million of LTM operating income, which amounts to, well, 0.1% of sales on a computational basis. But we’d round that to zero – especially because Amazon’s e-Commerce business was already almost there in the year ago period when its margin on sales came in a tad higher at 0.6%!

Read more …

No kidding.

Structural Racism At Heart Of British Society, UN Human Rights Panel Says (G.)

The disproportionate number of deaths of black and brown people in incidents with the police shows that structural racism remains rooted in the fabric of British society, a panel of UN human rights experts has said. The panel cited data from the Metropolitan police showing a disproportionate number of minority ethnic people – particularly those of African or Caribbean descent – dying due to excessive use of force by the state. Noting that there had never been a successful prosecution of a police officer for a death in police custody, the panel said: “This points to the lack of accountability and the impunity with which law enforcement and state agencies operate.”

The warning from members of the UN human rights council comes before a 12-day visit to the UK by E Tendayi Achiume, the special rapporteur on racism, beginning on Monday. “The deaths reinforce the experiences of structural racism, over-policing and criminalisation of people of African descent and other minorities in the UK,” they said. “Failure to properly investigate and prosecute such deaths results in a lack of accountability for those individuals and state agencies responsible, as well as in the denial of adequate remedies and reparation for the families of the victims.” The panel pointed particularly to the disproportionate use of stun guns. People from black and minority ethnic backgrounds were three times more likely to be subjected to the use of such weapons by police, they said.

The members added: “People of African descent with psychosocial disabilities and those experiencing severe mental or emotional distress reportedly face multiple forms of discrimination and are particularly affected by excessive use of force.” A report last year by David Lammy, the Labour MP for Tottenham, found racial disparities across the criminal justice system. He has consistently said that young black men feel as though they are living in a police state and that a different standard of policing is applied to black youths, compared with whites.

Read more …

Me, I predict a giant mess.

Brexit Failure Looks More Likely Every Day (Ritholtz)

Today, I will violate one of my favorite principles, and hereby make this prediction: No Brexit! In other words, the U.K. will not exit the European Union. By 2023, we will look back at the entire ridiculous affair as if it were a rediscovered lost episode of “Fawlty Towers.” Soon after the referendum in which Brits unwisely voted to leave the EU, I suggested there was a 33% chance that Brexit wouldn’t occur. Now, I raise that to 75%, and with each passing day of incompetence shown by Prime Minister Theresa May’s administration, the probabilities move higher.

With that disclosure out of the way, I’d like to explain the thinking behind this not-so-bold forecast. From the very beginning, I have been a skeptic that a full Brexit would occur. The concept was simply so foolish and self-destructive that the reasonable expectation was cooler heads would prevail. But that was a modest assumption and didn’t anticipate the feckless May government making a bad situation even worse. There seem to be several ways this can, and probably will, fall apart. In order of likelihood (recognizing a combination of any and all of these is possible):

1) Doing nothing
2) Snap parliamentary election leading to a May loss
3) New referendum
4) Ireland/Scotland make it too complicated
5) Europe makes it impossible

Read more …

The EU is ready for a fight.

Mayday on May Day? Trump Steel Tariff Deadline Looms (R.)

While more than 100 countries take a day off for May Day, U.S. President Donald Trump will spend next Tuesday deciding whether to extend a largely U.S.-China trade standoff into a more global dispute. In a week featuring a Federal Reserve monetary policy meeting, U.S. monthly jobs data and first estimates on euro zone inflation and economic growth, Trump’s decision on metal tariffs may prove to the be biggest market mover. The United States set import tariffs of 25% on steel and 10% on aluminum a month ago, but granted temporary exemptions to the European Union, NAFTA partners Canada and Mexico, as well as Argentina, Brazil, Australia and South Korea. Those exemptions expire on May 1.

Korea secured a permanent exemption for steel within days of agreeing to a revision of its trade pact with the United States. Canada and Mexico may rely on advances in talks on North American Free Trade Agreement (NAFTA) for an extension. Continued exemptions for the other countries, and notably the European Union, remain in doubt. French President Emmanuel Macron and German Chancellor Angela Merkel were meeting Trump in Washington as part of EU lobbying effort in the past week, but German officials played down the chances of a breakthrough before Merkel’s Friday visit. “From today’s point of view, we must reckon that the tariffs will come on May 1,” one official said.

The European Commission, which oversees trade policy for the 28-member bloc, has insisted the United States grant it a permanent exemption without conditions. White House economic adviser Larry Kudlow said on Thursday that Trump wanted concessions on automobiles, for which import duties are higher into Europe than into the United States.

Read more …

The Fed as a cult.

Donald Trump and the Next Crash (Nomi Prins)

We have entered a landmark moment: no president since Woodrow Wilson (during whose administration the Federal Reserve was established) will have appointed as many board members to the Fed as Donald Trump. His fingerprints will, in other words, not just be on Supreme Court decisions, but no less significantly Fed policy-making for years to come — even though, like that court, it occupies a mandated position of political independence. The president’s latest two nominees to that institution’s Board of Governors exemplify this. He has nominated Richard Clarida, a former Treasury Department official from the days of President George W. Bush who later became a strategic adviser to investment goliath Pimco, to the Fed’s second most important slot, while giving the nod to Michelle Bowman, a Kansas bank commissioner, to represent community banks on that same board.

Like many other entities in Washington, the Fed’s Board of Governors has been operating with less than a full staff. If Clarida is approved, he will join Trump-appointed Fed Chairman Jerome Powell and incoming New York Federal Reserve Bank head John C. Williams — the New York Fed generally exists in a mind meld with Wall Street — as part of the most powerful trio at that institution. Williams served as president of the San Francisco Fed. Under his watch, the third largest U.S. bank, Wells Fargo, created about 3.5 million fake accounts, gave its CEO a whopping raise, and copped to a $1 billion fine for bilking its customers on auto and mortgage insurance contracts.

Not surprisingly, Wall Street has embraced Trump’s new Fed line-up because its members are so favorably disposed to loosening restrictions on financial institutions of every sort. Initially, the financial markets reflected concern that Chairman Powell might turn out to be a hawk on interest rates, meaning he’d raise them too quickly, but he’s proved to be anything but. As Trump stacks the deck in his favor, count on an economic impact that will be felt for years to come and could leave the world devastated. But rest assured, if the Fed can help Trump keep the stock market buoyant for a while by letting money stay cheap for Wall Street speculation and the dollar competitive for a trade war, it will.

Read more …

And Canada?!

US Issues New Warning To China On Its Handling Of Intellectual Property (BBG)

The U.S. issued a new warning to China on its handling of intellectual property as President Donald Trump prepares to dispatch senior advisers to the Asian nation to head off a trade dispute. The U.S. Trade Representative’s office kept China on its “priority watch list” of countries whose IP practices require monitoring. China has an “urgent need” to fix a range of IP-related concerns, including trade-secret theft, online piracy, and forced technology transfer, USTR said in its annual report on IP protection and enforcement. Escalating trade tensions between the world’s two-biggest economies have rattled markets and sparked fears of a trade war. Trump has proposed tariffs on as much as $150 billion of Chinese imports on the grounds of alleged IP theft, while Beijing has vowed to retaliate on everything from American soybeans to airplanes.

The annual list, which carries no immediate penalties, is supposed draw attention to the need for nations to address everything from copyright infringement to online piracy. Trump said this week Treasury Secretary Steven Mnuchin and other senior officials will visit China within days, adding that there’s a “very good chance” the two countries can reach a deal. U.S. Trade Representative Robert Lighthizer and White House economic adviser Larry Kudlow will also be part of the delegation. Kudlow said he expects serious negotiations on a range of trade irritants, including technology-related issues, and the U.S. will be looking for specific actions from China. Officials in Beijing in recent weeks have been announcing steps to further open up the economy, such as gradually scrapping foreign ownership caps on local vehicle companies.

The administration added Canada and Colombia to the highest priority watch list for IP challenges, and it dropped Thailand from the regular watch list. Canada is the only Group of Seven country on the monitoring list. The USTR said the country has failed to resolve “key longstanding deficiencies,” including poor border and law enforcement with respect to counterfeit and pirated goods, weak patent protection and pricing for pharmaceuticals, and inadequate copyright protection.

Read more …

It’s the shadow banks that have financed that 6.8% growth they miraculously achieve every single month and year.

China Is Bolstering Lenders Before A New Assault On Shadow Banking (BBG)

Investors who pushed up Chinese bank shares last week on news of lower reserve requirements may have been celebrating too soon. The subtext to Tuesday’s move is an effort to prepare the banks for a painful new phase in China’s campaign to reduce financial-sector risks, as regulators free up deposit rates and accelerate their crackdown on the nation’s $16 trillion shadow banking sector. “China is gearing up to crack a hard nut with deleveraging and financial reforms, and the central bank is offering some coordinated policies to ensure it will be a smooth transition,” said Xia Le, chief Asia economist at Banco Bilbao Vizcaya Argentaria in Hong Kong.

The People’s Bank of China’s decision to free up more liquidity for banks by slashing reserve ratio requirements, at a time when funding conditions are plentiful, shows the central bank is trying to insulate lenders for the next phase of reform, said Ming Ming, head of fixed-income research at Citic Securities. A key element of that reform process is a plan to give banks greater freedom to set interest rates, flagged by PBOC Governor Yi Gang at the Boao forum earlier this month. That will help banks better compete for deposits from Chinese savers and hasten the shift away from shadow instruments such as wealth management products.

Already, China Construction Bank, Bank of China and other large lenders have started trying to attract funding by rolling out certificates of deposit with sharply higher interest rates. But the move away from off balance sheet WMPs to on-balance sheet deposit funding is likely to be painful. Guosen Securities analyst Wang Jian described interest rate liberalization as like “throwing a bomb at banks” in an April 11 note, saying the need to offer higher deposit rates to attract funds could push them into riskier lending, to real estate for example, in order to protect profits.

Read more …

What are the little ones going to do?

World’s Central Banks Just Can’t Quit on Currency Intervention (BBG)

History shows that central banks rarely stem a currency’s long-term decline simply by spending foreign-exchange reserves. Yet not stepping in at all can prove far worse. That’s the argument used by authorities in Brazil, Indonesia and most recently Argentina to explain why it makes sense to shower billions of dollars on what looks like a losing bet. This week alone, Argentina spent about $3 billion, or 5% of its reserves, to bolster the peso after it plunged to a record low. Then, wielding another monetary cudgel, it unexpectedly goosed interest rates. In Buenos Aires, the combination worked – at least for today. The peso ended just a blip or two in the green after sliding 1.8% earlier. It’s still this year’s worst-performing major currency, nosing out Russia’s ruble and the Turkish lira.

“It was a success in the sense that it gave two signals to the market,” said Daniel Chodos, a strategist at Credit Suisse based in the Argentine capital. “One is that it can and will use all available instruments to conduct monetary policy, that is, interest-rate and FX interventions. The second signal is that because of the tool kit it has, it can intervene and cause some pain to markets.” Indonesia is a more cautionary tale. The southeast Asian nation’s central bank drained $6 billion of foreign reserves in February and March partly to stabilize the rupiah, and may have further eroded the $126 billion pile as it stepped up intervention this month. But the moves, coupled with a threat to hike rates, didn’t calm volatility. That led the central bank to say it’s preparing a second line of defense to ensure liquidity.

Brazil’s interventions in the foreign-exchange market, using currency swaps, became so regular between 2013 and 2015 that traders started likening them to “ração diária,” the moment each day set aside to feed your pets.

Read more …

“..for the first time they are going to charge based on factors including affordability, reliability, transparency, renewable energy integration, efficiency..”

Hawaii Takes Historic First Step Toward Creating ‘Utility of the Future’ (RE)

In what could be the beginning of the new way forward to utilities, on Tuesday, Hawaiian Gov. David Ige signed the Ratepayer Protection Act, a new law that directs utilities in Hawaii to change their business models and fully decouple revenue and capital expenditures. “This is the first jurisdiction that is doing this. It’s a concept that’s been discussed at some length among scholars and experts in the field but no one has actually implemented this so this was definitely a moonshot bill,” said State Sen. Stanley Chang in an interview. “Instead of charging what the market can bear or letting utilities charge on a cost-plus basis to recoup their costs, for the first time they are going to charge based on factors including affordability, reliability, transparency, renewable energy integration, efficiency,” he added.

“That’s a total change to the business model of these utilities.” Today, one of the only ways that utilities all across the world can generate revenue is by rate-basing capital expenditures. What that means in plain English is that the more utilities spend on infrastructure, such as upgrading transmission and distribution equipment (and building new generation plants in some territories), the more money they make because they are allowed to add those capital expenditures to their electric rates plus a healthy margin and recover their costs through ratepayer dollars.

As of July 1, 2020, this model will cease to exist in Hawaii. Under the new law Hawaiian utilities and the public utility commission (PUC) will need to come up with “performance incentives and penalty mechanisms that directly tie an electric utility revenues to that utility’s achievement on performance metrics and break the direct link between allowed revenues and investment levels,” according to the new law.

Read more …

“Contamination of soil, vegetation and water is so widespread in Japan that evacuating all the at-risk populations could collapse the economy..”

Fukushima is Now Officially Worse Than Chernobyl (CP)

The radiation dispersed into the environment by the three reactor meltdowns at Fukushima-Daiichi in Japan has exceeded that of the April 26, 1986 Chernobyl catastrophe, so we may stop calling it the “second worst” nuclear power disaster in history. Total atmospheric releases from Fukushima are estimated to be between 5.6 and 8.1 times that of Chernobyl, according to the 2013 World Nuclear Industry Status Report. Professor Komei Hosokawa, who wrote the report’s Fukushima section, told London’s Channel 4 News then, “Almost every day new things happen, and there is no sign that they will control the situation in the next few months or years.”

Tokyo Electric Power Co. has estimated that about 900 peta-becquerels have spewed from Fukushima, and the updated 2016 TORCH Report estimates that Chernobyl dispersed 110 peta-becquerels.[1](A Becquerel is one atomic disintegration per second. The “peta-becquerel” is a quadrillion, or a thousand trillion Becquerels.) Chernobyl’s reactor No. 4 in Ukraine suffered several explosions, blew apart and burned for 40 days, sending clouds of radioactive materials high into the atmosphere, and spreading fallout across the whole of the Northern Hemisphere — depositing cesium-137 in Minnesota’s milk.[2]

The likelihood of similar or worse reactor disasters was estimated by James Asselstine of the Nuclear Regulatory Commission (NRC), who testified to Congress in 1986: “We can expect to see a core meltdown accident within the next 20 years, and it … could result in off-site releases of radiation … as large as or larger than the releases … at Chernobyl.[3] Fukushima-Daiichi came 25 years later. Contamination of soil, vegetation and water is so widespread in Japan that evacuating all the at-risk populations could collapse the economy, much as Chernobyl did to the former Soviet Union. For this reason, the Japanese government standard for decontaminating soil there is far less stringent than the standard used in Ukraine after Chernobyl.

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75% of insects are gone in France and Germany and they make this only about the bees?

EU Votes To Ban Bee-Killing Pesticides (AFP)

European Union countries voted on Friday in favour of a near-total ban on neonicotinoid insecticides which are blamed for an alarming collapse in bee populations. The move comes after the European food safety agency said in February that most uses of the chemicals posed a risk to bees, prompting environmentalists to push the 28-nation EU to immediately outlaw them. Bees help pollinate 90% of the world’s major crops, but in recent years have been dying off from “colony collapse disorder,” a mysterious scourge blamed on mites, pesticides, virus, fungus, or a combination of these factors.

Campaigners dressed in black and yellow bee suits rallied outside the headquarters of the European Commission in Brussels ahead of the vote for a ban on three key pesticide chemicals. EU Environment Commissioner Vytenis Andriukaitis said he was “happy that member states voted in favour of our proposal” to restrict the chemicals and tweeted a picture of the activists.

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Time for a very large and thorough study into plastics in humans.

The Hills Are Alive With The Signs Of Plastic (G.)

Microplastic pollution contaminates soil across Switzerland, even in remote mountains, new research reveals. The scientists said the problem could be worse in other nations with poorer waste management and that research was urgently needed to see if microplastics get into food. In the first major study of microplastics in soil, the researchers analysed soil samples from 29 river flood plains in nature reserves across Switzerland. They found microplastics, fragments under 5mm in size, in 90% of the soils. The scientists believe the particles are carried across the country by the wind. Research on microplastic pollution to date has largely concentrated on the oceans, in which it is found across the globe, including the Arctic. The particles have been shown to harm marine life and can absorb toxins from the water.

Record levels of microplastics were revealed in rivers by research released in March and last year tap water around the world was found to contain plastic fibres. Other studies have found microplastics in bottled water, which prompted the World Health Organization to launch a review, as well as in beer, honey and salt. However, almost no research has yet been done on whether the particles end up being widely consumed by people and whether they are harmful. Michael Scheurer and Moritz Bigalke at the Geographical Institute of the University of Bern, conducted the new research, which is published in the journal Environmental Science and Technology. “These findings are alarming,” Scheurer said. “For example, new studies indicate that microplastics in the soil can be harmful to and even kill earthworms in the soil.”

Microplastics were found even in remote mountain regions that can only be reached by foot. “We were really surprised,” said Bigalke. “All the areas were in national parks. We thought we might find one or two plastic particles, but we found a lot.” [..] One of the very few studies into microplastics in food examined backyard chickens in Mexico. The researchers found 57 particles per gramme in the gizzards of the chickens. “Chicken gizzard is a specialty in the Mexican kitchen and the intake of the present plastics form a strong risk for human health,” the scientists said.

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Apr 212018
 
 April 21, 2018  Posted by at 12:43 pm Finance Tagged with: , , , , , , , , , , ,  


Arthur Rothstein Lower Broadway, New York 1941

 

British media report today that Donald Trump may visit the country in late summer. (Renewed) calls for mass protests are everywhere, of course. The Metro news outlet features a picture of a pamphlet that reads No To Racism. No To Trump, that dates from an earlier occasion (Trump was supposed to come several times, but never did).

Now, good luck with those protests, it’s still a free country, in name at least. But boy oh boy, would you guys miss the point. Because as we now all know – or could-, your country is being governed by a group of people who are so racist they make even Trump’s fake tan pale in comparison. If Theresa May is still in office by the time Trump visits, you’re all a bunch of racists.

Both May and her Home Secretary Amber Rudd – and you all know they’re far from alone- look so completely deranged in reports about the Windrush scandal that you will have to get rid of them first, or else shut up about Trump because you will have no moral ground whatsoever left on which to protest his visit.

For those of you who don’t know what Windrush is about, and if you’re British you have no excuse not to know, it’s the name given to a group of people who arrived, on invitation, in Britain between the late 1940s and early 1970s, often as children, and whose legal status in the country is now put in so much doubt that some have already been deported, some are denied health care, and all live in fear. Despite having lived and worked and paid taxes all their lives.

There are many instances of people who have never left Britain for a family visit, some who can’t see their own children because they did go for that visit and weren’t allowed back in, the entire story is so appalling and disastrous it’s hard to read the various reports on it. The common denominator of all of these people? They are black.

 

Windrush: When Even Legal Residents Face Deportation

In the aftermath of World War II, the British government invited thousands of people from Caribbean countries in the British Commonwealth to immigrate to the United Kingdom and help address the war-torn country’s labor shortages. Now, nearly 70 years later, many of those same people, now elderly, are having their legal status in the country questioned and are facing deportation. Though the deportation threats date as far back as October, the crisis burst into wider view this week after Caribbean diplomats representing a dozen Commonwealth nations chastised the U.K. government publicly. “This is about people saying, as they said 70 years ago, ‘Go back home.’ It is not good enough for people who gave their lives to this country to be treated like this,” Guy Hewitt, the high commissioner from Barbados to the U.K., said at a gathering of the diplomats.

As for the Guardian, which claims it broke the story, here’s a question: where were you all those years? As for Theresa May, who when she occupied the Home Office from 2010-2016 and devised all manner of tough-on-immigrants measures that have now spread to people the UK itself invited into its nation: you have to go. You cannot continue to be the face of Britain, because you blemish any and all of your fellow country men and women.

 

 

As for Donald Trump, as much as we would like to engage in constructive criticism of the man and his government, we find we no longer can. The anti-Trump echo-chamber has turned so deafening that any intelligent debate about his policies is being drowned out amid the never ending flow of fake news and half truths and innuendo and empty smears that US media continue to spout. With a brief lull when the bombs fell on Syria.

Thank you, New York Times, WaPo, CNN, MSNBC. Thank you for killing the entire discussion, thank you for killing off journalism. There is a lot to say about Trump, much of it critical, but we can no longer open our mouths. Because we don’t want to be in the same camp as you. Life in the echo chamber has given us vertigo. We had to get out.

And now, what are you going to do? The DNC lawsuit-for-campaign-cash which was launched yesterday against everything Trump, plus Wikileaks, plus everything Russia, may appear to you to be a nice and juicy next episode in your ‘impeach the comb-over’ narrative, but if I were you, I’d be careful. Because the suit creates the ideal ground upon which the empire can strike back.

And the counter suits look a lot stronger. The DNC has nothing on Russia, Wikileaks and most Trump affiliated people and organizations, as the Mueller investigation has shown by now. But Loretta Lynch, the “Pakistani mystery man”, Debbie Wasserman Schultz, Comey, McCabe, and many more around Hillary Clinton, that’s a whole different story.

First of all, they haven’t been investigated for well over a year. But can you see Rosenstein now still refusing to appoint a second special counsel and going after anything Democrat? It would cost him his job, and for good reason. And then what will the place of the echo chamber be? What have been your sources on Trump et al over the past, let’s say, 18 months? How are you going to report on your own role? Someone’s going to ask these questions.

And, you know, you do know that at least someone will name Trump for the Nobel Peace Prize if he pulls off ‘pacifying’ North Korea. How will you address that? See, you can’t praise the Donald anymore even if he does achieve things -other than missiles-, and we can’t criticize him anymore for what does indeed go wrong because you monopolized that criticism with your opinionated 24/7 non-news. While claiming to be the serious press.

Trump must be very grateful to you for what you’ve done. Come to think of it, perhaps that second special counsel should look into any payments you have received from Russia. Because nobody has helped Trump more than you have. Except perhaps for the Britons who plan to protest his visit with their racist prime minister.

Why do I feel like most of the world has lost its compass? Like we’re all just aimlessly bobbing around on a sea of meaningless words? You know, Trump territory.

 

 

Apr 212018
 
 April 21, 2018  Posted by at 9:00 am Finance Tagged with: , , , , , , , , , , , ,  


James McNeill Whistler Morning Glories 1869

 

A US Recession Ahead? Fed Policymakers Say Not To Worry (R.)
If Treasuries Reach 3%, That Would Be Big (BBG)
Kim Jong-Un Halts Nuclear & Missile Tests, Shuts Down Testing Site (RT)
DNC Sues Russia, Trump, Wikileaks For Conspiring To Hurt Hillary in 2016 (ZH)
DNC Lawsuit Against WikiLeaks a Serious Threat to Press Freedom (IC)
Trump To “Counter” DNC Lawsuit (ZH)
Comey Memos Probed By DOJ For Classified Info Leaks (ZH)
Wells Fargo’s $1 Billion Pact Gives U.S. Power to Fire Managers (BBG)
IMF’s Thomsen Proposes Broadening Greek Tax Base (K.)
Windrush: When Even Legal Residents Face Deportation (Atlantic)

 

 

The illusion of control. Watch the hand.

A US Recession Ahead? Fed Policymakers Say Not To Worry (R.)

As the gap between short- and long-term borrowing costs hovers near its lowest in more than 10 years, speculation has risen over whether the so-called yield curve is signaling that a recession could be around the corner. Not to worry, two influential Federal Reserve policymakers said on Friday. Another, whose views are typically outside the mainstream at the Fed, disagreed. Growth prospects look pretty strong, which is why the Fed is raising short-term interest rates, the two sanguine policymakers explained. Those rate hikes, they said, are in and of themselves acting to flatten the yield curve. In addition, they argued, the curve will likely steepen as the U.S. government runs a bigger deficit and issues more debt.

The calming comments, from the New York Fed’s incoming chief John Williams and from Chicago Fed President Charles Evans in back-to-back but separate appearances, appeared calculated to allay concern about a potential slowdown ahead. “The yield curve is not nearly as much of a concern as I might have pointed to a couple months ago,” Evans said in Chicago after a speech, in response to a reporter’s question. Williams, who will leave his current job as San Francisco Fed president in June to take over at the New York Fed, also said he expects the Fed’s shrinking balance sheet will help steepen the curve by putting upward pressure on longer-term rates.

In January the U.S. Congress passed a budget deal that boosts U.S. government spending, following a December tax package that slashes corporate tax rates. Both changes are expected to lead to an increase in government borrowing in coming years. The Fed policymakers reason that a bigger supply of debt should put downward pressure on Treasury prices and deliver a corresponding lift to yields. “We’ve got more fiscal debt in train in the U.S. That has to be funded,” and will likely push up long rates and steepen the yield curve, Evans said. At their March meeting, Fed officials “generally agreed that the current degree of flatness of the yield curve was not unusual by historical standards,” according to the meeting minutes.

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Where the Fed loses control.

If Treasuries Reach 3%, That Would Be Big (BBG)

The global bond market’s primary benchmark, the 10-year U.S. Treasury yield, is knocking on the door of 3 percent, a level it hasn’t topped in more than four years. That’s more than just a nice round number. Higher yields make the burden of everything from mortgages to student loans and car payments even heavier. Some market gurus see it as a turning point with effects that could be felt for years — and not just in bonds. With the Federal Reserve signaling interest rates are going up even more, investors in riskier assets like stocks and high-yield debt are left to wonder if this is how their post-recession party ends.

1. What’s so important about yield? A bond’s yield is a measure of the return an investor can expect from buying it. It’s determined by the bond’s interest rate and the price paid for it. For instance, buying a security that pays a fixed 2 percent (the “coupon”) at face value (known as “par”) results in a yield of 2 percent. Buying it at a cheaper price would raise the yield for the investor, while paying a premium would reduce the overall yield. (Maybe the most confusing aspect of the bond market to outsiders is the inverse relationship between price and yield.)

2. How do you determine the benchmark 10-year yield?In the $14.9 trillion Treasuries market, the benchmark is based on the most recently auctioned 10-year security (known as the “on-the-run”). It’s the best measure because it tends to have a price close to par and a coupon close to the current yield. On Friday, the 10-year yield closed at 2.96 percent.

3. Why are yields going up?The Fed is raising its short-term lending rate as the U.S. economy strengthens, after holding it near-zero in the wake of the financial crisis. The three rate hikes last year pushed up two- and five-year Treasury yields in particular, but they’ve also affected 10-year yields as central bankers expect more boosts this year. Another reason: inflation is showing signs of picking up, which erodes the value of bonds’ fixed payments and leads investors to demand higher yields.

4. Why is 3 percent a milestone?Since 2011, it’s been touched only twice, briefly, in 2013 and early 2014, before a bond bull market drove yields to record lows. But 3 percent has also been cited by prominent fixed-income investors like Jeffrey Gundlach at DoubleLine Capital and Scott Minerd at Guggenheim Partners as critical to determining whether the three-decade bull market in bonds is at an end. In the mind of analysts who look at market patterns, once the yield breaks much beyond the 3.05 percent, to levels last reached in 2011, that threshold could flip to a floor from a ceiling.

5. Why does it matter?The 10-year Treasury yield is a global benchmark for borrowing costs. Corporations will have to pay more to issue debt, which they’ve done cheaply in recent years. So will state and local governments, which could jeopardize investments in public infrastructure. Homeowners will face higher mortgage rates (or lose out on refinancing at a lower cost). Taking out loans for cars or college could also become more expensive.

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A Nobel Peace Prize.

Kim Jong-Un Halts Nuclear & Missile Tests, Shuts Down Testing Site (RT)

North Korea’s nuclear and ballistic missile programs have allowed it to secure strategic stability and peace, so there is no need for additional missile and nuclear tests anymore, Kim Jong-un has proclaimed. “From April 21, 2018, nuclear tests and intercontinental ballistic missile tests will be discontinued,” the Korean Central News Agency cited Kim as saying at a plenary meeting of the central committee of the ruling Worker’s Party of Korea (WPK). Furthermore, since North Korea’s nuclear test center has “completed” its mission, it “will be discarded in order to ensure the transparency of the nuclear test suspension,” KCNA reported.

Announcing the new course, the ruling party has declared that North Korea “will never use nuclear weapons, unless there is nuclear threat or nuclear provocation to our country, and in no case we will proliferate nuclear weapons and nuclear technology.” In the announcement, North Korea noted that the “suspension of nuclear testing is an important process for global nuclear disarmament.” Therefore, North Korea is willing to join international denuclearization efforts. North Korea’s last major missile test took place on November 29. Pyongyang announced at the time that it had tested a new type of intercontinental ballistic missile known as the Hwasong-15 that could reach the entire continental United States.

US President Donald Trump, who has traded insults and threats with Kim since taking office, tweeted that the latest decision by Pyongyang is “good news for North Korea and the world,” calling it “big progress.” China has also hailed the move, expressing hope that Pyongyang will continue towards the path of denuclearization and “political settlement” on the Korean Peninsula. “Denuclearization of the peninsula and lasting peace in the region are in line with the common interests of the people of the peninsula,” the Chinese Foreign Ministry said in a statement on Saturday.

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Have they really thought this through?

DNC Sues Russia, Trump, Wikileaks For Conspiring To Hurt Hillary in 2016 (ZH)

Did The Democrats’ “The Russians did it” narrative just jump the shark? The Washingtoin Post reports that The Democratic National Committee filed a multimillion-dollar lawsuit Friday against the Russian government, the Trump campaign and the WikiLeaks organization alleging a far-reaching conspiracy to disrupt the 2016 campaign and tilt the election to Donald Trump. The lawsuit alleges that in addition to the Russian Federation, the General Staff of the Armed Forces of the Russian Federation, Wikileaks and Guccifer 2.0, top Trump campaign officials, including Donald Trump Jr, Roger Stone, Jared Kushner, Paul Manafort and pretty much everyone else who has been mentioned in the same paragraph as Trump….

… conspired with the Russian government and its military spy agency to hurt Democratic presidential nominee Hillary Clinton and help Trump by hacking the computer networks of the Democratic Party and disseminating stolen material found there. [..] The suit filed today seeks millions of dollars in compensation to offset damage it claims the party suffered from the hacks. The DNC argues that the cyberattack undermined its ability to communicate with voters, collect donations and operate effectively as its employees faced personal harassment and, in some cases, death threats.

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And Julian Assange is not allowed to see this. Let alone defend himself. A pattern in his life.

DNC Lawsuit Against WikiLeaks a Serious Threat to Press Freedom (IC)

The Democratic National Committee (DNC) filed a lawsuit this afternoon in a Manhattan federal court against the Russian Government, the Trump campaign and various individuals it alleges participated in the plot to hack its email servers and disseminate the contents as part of the 2016 election. The DNC also sued WikiLeaks for its role in publishing the hacked materials, though it does not allege that WikiLeaks participated in the hacking or even knew in advance about it; its sole role, according to the DNC’s lawsuit, was publishing the hacked emails.

The DNC’s suit, as it pertains to WikiLeaks, poses a grave threat to press freedom. The theory of the suit – that WikiLeaks is liable for damages it caused when it “willfully and intentionally disclosed” the DNC’s communications (paragraph 183) – would mean that any media outlet that publishes misappropriated documents or emails (exactly what media outlets quite often do) could be sued by the entity or person about which they are reporting, or even theoretically prosecuted for it, or that any media outlet releasing an internal campaign memo is guilty of “economic espionage” (paragraph 170).

It is extremely common for media outlets to publish or report on materials that are stolen, hacked, or otherwise obtained in violation of the law. In October, 2016 – one month before the election – someone mailed a copy of Donald Trump’s 1995 tax returns to the New York Times, which published parts of it even though it is illegal to disclose someone’s tax returns without the taxpayer’s permission; in March, 2017, MSNBC’s Rachel Maddow did the same thing with Trump’s 2005 tax returns.

In April, 2016, the Washington Post obtained and published a confidential internal memo from the Trump campaign. Media outlets constantly publish private companies’ internal documents. Just three weeks ago, BuzzFeed obtained and published a secret Facebook memo outlining the company’s internal business strategies, the contents of which were covered by most major media outlets. Some of the most important stories in contemporary journalism have come from media outlets obtaining and publishing materials that were taken without authorization or even in violation of the law. Both the New York Times and Washington Post published thousands of pages from the top secret Pentagon Papers after Daniel Ellsberg took them without authorization from the Pentagon – and they won the right to publish them in the U.S. Supreme Court.

The Guardian and the Washington Post won the 2014 Pulitzer Prize for Public Service for publishing and reporting on huge numbers of top secret documents taken by Edward Snowden from the NSA. The Guardian, the New York Times, and numerous papers from around the world broke multiple stories by publishing classified classified documents downloaded by Chelsea Manning without authorization and sent to WikiLeaks. In 2016, more than 100 newspapers from around the world published and reported on millions of private financial documents known as the “Panama Papers,” which were taken without authorization from one of the world’s biggest offshore law firms and revealed the personal finances of people around the world.

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Did the DNC see this coming, and is that why they sued first?

Trump To “Counter” DNC Lawsuit (ZH)

President Trump is eager to go head-to-head with the DNC which filed a multimillion-dollar lawsuit on Friday against several parties, including the Russian government, the Trump campaign and the WikiLeaks organization – alleging a “far-reaching conspiracy to disrupt the 2016 campaign and tilt the election to Donald Trump.” Hours after the Washington Post broke the news of the lawsuit, Trump tweeted “Just heard the Campaign was sued by the Obstructionist Democrats. This can be good news in that we will now counter for the DNC server that they refused to give to the FBI,” referring to the DNC email breach. Trump also mentioned “the Debbie Wasserman Schultz Servers and Documents held by the Pakistani mystery man and Clinton Emails.”

The “Pakistani mystery man” is a clear reference to former DNC CHair Debbie Wasserman Schultz’s longtime IT employee and personal friend, Imran Awan – whose father, claims a Daily Caller source, transferred a USB drive to the former head of a Pakistani intelligence agency – Rehman Malik. Malik denies the charge. Of note, the DNC would not allow the FBI to inspect their servers which were supposedly hacked by the Russians – instead relying on private security firm Crowdstrike. Meanwhile, the “Wasserman Schultz Servers” Trump mentions is likely in reference to the stolen House Democratic Caucus server – which Imran Awan had been funneling information onto when it disappeared shortly after the House Inspector General concluded that the server may have been “used for nefarious purposes.”

Imran Awan, his wife Hina Alvi and several other associates ran IT operations for at least 60 Congressional Democrats over the past decade, along with the House Democratic Caucus – giving them access to emails and computer data from around 800 lawmakers and staffers – including the highly classified materials reviewed by the House Intelligence Committee.

Napolitano: He was arrested for some financial crime – that’s the tip of the iceberg. The real allegation against him is that he had access to the emails of every member of congress and he sold what he found in there. What did he sell, and to whom did he sell it? That’s what the FBI wants to know. This may be a very, very serious national security situation.

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“..all of Comey’s memos – all of them, were classified at the time they were written, and they remain classified.”

Comey Memos Probed By DOJ For Classified Info Leaks (ZH)

The Department of Justice (DOJ) inspector general is now conducting an investigation into classification issues concerning the “Comey memos” leaked to the New York Times by former FBI Director James Comey. Sources tell the Wall St. Journal that at least two of the memos which Comey leaked to his “good friend,” Columbia Law Professor Daniel Richman, contained information that officials now consider classified – prompting the review by the Office of the Inspector General, headed by Michael Horowitz. “Of those two memos, Mr. Comey himself redacted elements of one that he knew to be classified to protect secrets before he handed the documents over to his friend. He determined at the time that another memo contained no classified information, but after he left the Federal Bureau of Investigation, bureau officials upgraded it to “confidential,” the lowest level of classification.” -WSJ

Comey told Congressional investigators that he considered the memos to be personal rather than government documents. The memos – leaked through Richman, were a major catalyst in Deputy Attorney General Rod Rosenstein’s decision to appoint former FBI Director Robert Mueller as special counsel to investigate Russian interference in the 2016 US election. While Richman told CNN “No memo was given to me that was marked ‘classified,’ and James Comey told Congressional investigators he tried to “write it in such a way that I don’t include anything that would trigger a classification,” it appears the FBI’s chief FOIA officer disagrees.

We previously reported that Senator Chuck Grassley (R-IA) said four of the 7 Comey memos he reviewed were “marked classified” at the “Secret” or “Confidential” level – however in January the FBI’s chief FOIA officer reportedly told Judicial Watch – in a signed declaration, that every single Comey memo was classified at the time. “We have a sworn declaration from David Hardy who is the chief FOIA officer of the FBI that we obtained just in the last few days, and in that sworn declaration, Mr. Hardy says that all of Comey’s memos – all of them, were classified at the time they were written, and they remain classified.” -Chris Farrell, Judicial Watch

Therefore, Farrell points out, Comey mishandled national defense information when he “knowingly and willfully” leaked them to his friend at Columbia University. It’s also mishandling of national defense information, which is a crime. So it’s clear that Mr. Comey not only authored those documents, but then knowingly and willfully leaked them to persons unauthorized, which is in and of itself a national security crime. Mr. Comey should have been read his rights back on June 8th when he testified before the Senate. Farrell told Lou Dobbs “Recently retired and active duty FBI agents have told me – and it’s several of them, they consider Comey to be a dirty cop.”

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“Wells Fargo fined twenty days worth of net income sounds a lot less daunting than $1 billion..”

Wells Fargo’s $1 Billion Pact Gives U.S. Power to Fire Managers (BBG)

Wells Fargo’s $1 billion fine won’t close the book on fallout from its consumer scandals. The nation’s third-largest bank submitted to an unprecedented order Friday that would give the Office of the Comptroller of the Currency the right to remove some of the lender’s executives or board members. That comes on top of the penalties Wells Fargo will pay to settle U.S. probes into mistreatment of consumers, the largest sanction of a U.S. bank under President Donald Trump. The OCC said it “reserves the right to take additional supervisory action, including imposing business restrictions and making changes to executive officers or members of the bank’s board of directors.” The agency could also veto potential executive candidates.

The bank will pay $500 million in penalties each to the OCC and the Consumer Financial Protection Bureau, according to a statement Friday. Wells Fargo warned shareholders last week it would soon face a fine of that size, which it will book retroactively in the first quarter. The bank remains under a Federal Reserve penalty that bans growth in total assets. “CEOs who hoped the Trump administration would be universally lenient regulators missed the difference between a dislike for rules that stifle innovation and employment and a dislike for rules against wrongdoing,” said Erik Gordon, a professor at the University of Michigan’s Ross School of Business.

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Squeezing that stone for all he’s worth.

IMF’s Thomsen Proposes Broadening Greek Tax Base (K.)

Poul Thomsen, director of the International Monetary Fund’s European department, on Friday spoke in favor of broadening Greece’s tax base though he stopped short of determining whether the IMF would call for reductions to the tax-free threshold (due to come into effect in January 2020) to apply a year in advance. Speaking in Washington, where the IMF is holding its Spring Meetings, Thomsen said that raising taxes had played a large part in the country’s fiscal adjustment in recent years but that Greece must find a way of meeting fiscal targets that is “growth-friendly.” The IMF will not impose any specific policies, he said but proposed a “discussion” about the timing of tax reforms.

As regards the Fund’s potential role in Greece’s third international bailout, which expires in August, he said at least one bailout review must be carried out before a decision can be made as well as agreement to lighten Greece’s debt. “Time is running short for us to be able to activate the program,” he said. A discussion on debt measures is likely to take place at the next meeting of eurozone finance ministers, scheduled for April 27 in Sofia. Talks there will also focus on a growth plan that the government has presented to bailout auditors. Finance Minister Euclid Tsakalotos on Friday met in Washington with European Economic and Monetary Affairs Commissioner Pierre Moscovici, Eurogroup Chairman Mario Centeno and European Central Bank President Mario Draghi and is to meet Thomsen and IMF chief Christine Lagarde on Saturday.

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If this doesn’t bring down the government, Britain has a whale of a problem. And no excuses. May suddenly offering them money now, after being exposed, is perhaps the worst part of it. You can’t buy off blatant racism with taxpayer money. And those taxpayers should let that be known, very loudly. Or they’re just as guilty.

Windrush: When Even Legal Residents Face Deportation (Atlantic)

In the aftermath of World War II, the British government invited thousands of people from Caribbean countries in the British Commonwealth to immigrate to the United Kingdom and help address the war-torn country’s labor shortages. Now, nearly 70 years later, many of those same people, now elderly, are having their legal status in the country questioned and are facing deportation. Though the deportation threats date as far back as October, the crisis burst into wider view this week after Caribbean diplomats representing a dozen Commonwealth nations chastised the U.K. government publicly. “This is about people saying, as they said 70 years ago, ‘Go back home.’ It is not good enough for people who gave their lives to this country to be treated like this,” Guy Hewitt, the high commissioner from Barbados to the U.K., said at a gathering of the diplomats.

The migrants are known as the “Windrush generation,” named for the HMT Empire Windrush that brought the first group of them to the U.K. in June 1948. Of the half a million people who immigrated to the U.K. from the Commonwealth between then and 1971, an estimated 50,000 lack the proper documentation to prove it. In a meeting with Caribbean leaders on Tuesday, U.K. Prime Minister Theresa May apologized “for any anxiety that has been caused” and promised no deportations would take place. Still, such assurances won’t necessarily convince those who remain skeptical of the U.K.’s strict immigration policies—ones May herself championed when she served as home secretary between 2010 and 2016.

During that time, May sought to meet then-Prime Minister David Cameron’s goal of reducing net immigration to the tens of thousands by making the U.K. a “hostile environment” for illegal immigration. In practice, this meant requiring doctors, employers, landlords, and schools to confirm that those whom they served were in the country legally. “The determination was to go systematically through any interaction people might have with the state, short of putting checkpoints in the road, just to have people’s immigration status checked,” Polly Mackenzie, the director of cross-party think tank Demos and the former policy director to Deputy Prime Minister Nick Clegg, told me. The Windrush generation wasn’t supposed to be part of that calculus—they had immigrated to the country legally and were thereby entitled to public services, including the right to education, healthcare, and social security.

But after the implementation of the “hostile environment” policies in 2012, these individuals suddenly had to prove their right to live and work in the country—a right which was guaranteed to them under the Immigration Act of 1971, though not everyone obtained the documentation to confirm it. This documentation problem arose in part from the fact that so many people belonging to the Windrush generation immigrated to the U.K. as children, often on their parents’ passport. What’s more, the British government didn’t keep records of who was permitted to stay in the country, nor did they issue documentation confirming it. What little records the government did keep, such as the landing cards documenting the arrival dates of Windrush-era immigrants, were discarded in 2010.

For some, the result was catastrophic. In one case, a woman had lived and worked in the U.K. for 50 years before she was wrongfully declared an illegal immigrant and almost forced on a plane to her native Jamaica. In another, a man who had lived in the U.K. for 59 years received a letter that not only informed him of his illegal status in the country, but also offered him “help and support on returning home voluntarily.” Perhaps one of the most severe cases concerned a man who, after living in the U.K. for 44 years, had his cancer treatment through the National Health Service withheld because he couldn’t provide sufficient documentation to prove he lived in the country continuously since immigrating from Jamaica in 1973.

Read more …

Mar 222017
 
 March 22, 2017  Posted by at 1:34 pm Finance Tagged with: , , , , , , , ,  


Salvador Dali Girl At The Window 1925

 

If Southern Europeans were a race, say there were something like a Mediterranean race, Jeroen Dijsselbloem would definitely be a racist. Since there is not, the -demissionary- Dutch Finance Minister and -still- president of the Eurogroup of eurozone finance ministers, escapes the label, albeit narrowly.

He will still enter history as a misogynist, though. It’s hard to tell if the man is simply really ‘thick’, or there’s something else going on, but his latest remarks have disqualified him for any position, at any time in the future, in European politics. Or they should have; in Europe these days it’s hard to tell.

It’s not as if his actions as Eurogroup head should not have already disqualified him, but nobody seemed interested or smart enough to understand why, except for the Greeks. But unfortunately for Brussels, Dijsselbloem is not even the actual problem, he’s a mere symptom. First, here’s what he said to German daily Frankfurter Allgemeine Zeitung on Monday. Let’s start with the Telegraph’s version:

Dijsselbloem Says Southern Europe Blew Cash On ‘Drinks And Women’

The head of the eurozone’s finance ministers has been criticised for stating that southern European countries blew their money on “drinks and women”. Jeroen Dijsselbloem, the Dutch finance minister who leads the group, made the comments in an interview on Monday with German newspaper Frankfurter Allgemeine Zeitung (FAZ). “During the crisis of the euro, the countries of the north have shown solidarity with countries affected by the crisis,” he said.

“As a Social Democrat, I attribute exceptional importance to solidarity. “But you also have obligations. “You cannot spend all the money on drinks and women and then ask for help.” Inside the European parliament, MEPs turned on Mr Dijsselbloem on Tuesday, calling his remarks “insulting” and “vulgar”. Gabriel Mato, a Spanish MEP, said the remarks were “absolutely unacceptable” and an “insult” to southern member states – claiming he had lost his neutrality as finance chief.

What the remarks make clear is that he never had “neutrality as finance chief”. And it gets better: he accuses Greece, Italy, Portugal, Cyprus, Spain, even Ireland (?!) of not ‘showing the same solidarity as northern eurozone states’. Boy, that’s rich. The Greeks should show more solidarity while being dragged down to a 3rd world country level by the ‘northern eurozone states’. That reeks of Stockholm Syndrome; Greece should be grateful for being beaten into submission.

Because there are -slightly- different translations of the remarks (the interview might have been done in Dutch or English or German originally, I don’t know, and can’t find the original), and therefore also different interpretations, here’s another version, from Politico.eu :

Dijsselbloem Not Fit To Be Eurogroup President, Says Socialist MEP Leader

Without naming names, Dijsselbloem told the Frankfurter Allgemeine on Monday that “countries in crisis” should stick to the deficit targets set by the European Commission and show the same solidarity as northern eurozone states during the financial crisis. “As a social democrat, for me solidarity is extremely important,” Dijsselbloem said. “But those who call for it (solidarity) also have duties. I cannot spend all my money on liquor and women and plead for your support afterwards. This principle applies on the personal, local, national and also European level.”

On Tuesday, Pittella described these comments as “shameful and shocking.” “Dijsselbloem went far beyond by using discriminatory arguments against the countries of southern Europe,” he said. “There is no excuse or reason for using such language, especially from someone who is supposed to be a progressive.”

[..] Pittella said it was “not the first time” that Dijsselbloem has expressed opinions “which are openly in contradiction with the line of the European progressive family.” “I truly wonder whether a person who has these beliefs can still be considered fit to be president of the Eurogroup,” he added.

In between different translations and interpretations, what is clear is that this is how Dijsselbloem sees the world. “Pittella said it was “not the first time” that Dijsselbloem has expressed opinions “which are openly in contradiction with the line of the European progressive family.”

For Dijsselbloem, Greeks -and Italians etc.- are lazy people who drink too much and frequent prostitutes a lot. That is the only possible conclusion to draw from his words. And that is painfully close to the picture Europeans and Americans alike have long held of not only the peoples of southern Europe, but also of those with ancestors in Africa. And you can throw in South America for good measure.

Dijsselbloem, in just a few words, sets back the advances made in western culture in the 20th century towards ‘other people’, and in his case that includes all women, by many years. But he doesn’t seem to get it. Indeed, he refuses to apologize, but seeks to merely walk his comments back ‘a tad’. As the Telegraph continues:

He continued: “It is not about one country, but about all our countries.” He then attempted to dig himself out of the hole by saying all countries had failed to uphold the financial rules set by the EU. “The Netherlands also failed a number of years ago to comply with what was agreed,” he said. “I don’t see a conflict between regions of the eurogroup.”

Also nice, from EU Observer :

Asked on Tuesday in a European Parliament hearing whether he apologised for his comment, Dijsselbloem answered: “No, certainly not. That’s not what I said.” But when Ernest Urtasun, an MEP from the Catalonian radical left, read his comment, Dijsselbloem said: “I know my statement, it came from this mouth.”

This is the man who, alongside Germany’s FinMin Schäuble, has already brought much of Greece to a state of absolute desperation, for no other reason than to save their own banks from having to write down their gambling losses, and to make the country an example to scare off any others who might harbor any thoughts at all of leaving the very ‘Union’ that does this to one of its member states.

This is a classical case of a man who has inadvertently, whatever he says from now on in, exposed himself as a major league bigot. You can’t walk back from that kind of goof. This is also the man who is supposed to chair the next meeting of the Eurogroup, where more decisions regarding the further descent of Greece into servitude will be taken.

All Europeans should hope that Spain and Italy will, alongside Greece, finally grow a pair, or Dijsselbloem might, as inconceivable as it may look -and should be-, be able to continue in his destructive role as Eurogroup head. And that goes to the core of the real problem that he is merely a symptom of. EU Observer again:

“Dutch voters didn’t elect me as Eurogroup president, it was the other ministers,” he argued, suggesting that losing his portfolio at home should not mean the end of his term in Brussels. Dijsselbloem stated that “It’s an important responsibility from which I don’t want to walk away.”

That real problem is that people don’t get to vote for who controls Brussels. Or let’s take it a step further: that there is no way to allow people to vote for that. 10 million Greeks can vote for whomever they want, but in the end they won’t have anything to say. When real decisions are taken, it’s all Germany all the time. 80 million people ultimately control a Union that has at present some 510 million inhabitants. It’s actually much less, of course, because not nearly all Germans have voted Merkel.

So even if Dijsselbloem is ousted, the powers that be, Germany, Holland, Finland, Austria, will simply appoint another one of their pawns in his place. Not even France is sure of its place at the top of the heap anymore, and Marine Le Pen, for all of her many flaws, is right about pointing that out. because

 

The fatal flaw in the EU structure is that voters in Germany or Holland or France choose their own domestic leadership, political parties, who subsequently become Europe’s leaders. But when important decisions must be made, in which what’s best for Germany may conflict with what’s best for the continent, these leaders of rich countries are bound first and foremost to the people at home who voted for them, not to Greeks or Italians.

There’s no possibility that model can survive for long; it will only work in times of plenty but fall apart when times get tougher. Germans will vote their own selfish interests, even if it means hammering others, and their politicians will follow. This is a very essential problem, and there is no way to solve it from within the present model. Because the only participants with the power to reform the EU would have to do so against their own interests.

Also, remember: Europe doesn’t have the ‘transfer payments’ system that the US has, where rich states pay to keep poor states from collapsing, a system designed to keep the country from being torn to bits. Without it, the USA would have long ceased existing, either through peaceful secessions(s) or through battles. Everyone understands that. So why expect the EU be able to survive without such a system? There is no way.

 

The EU in its present form cannot continue, and any options that would have allowed reforming it have been closed off due to its very structure. To preserve the EU, Germany would have to convince its own people to take quite a few steps back. That is never going to happen.

But hey, in the meantime we had us some fun, right, Jeroen? Now if you’ll excuse me, I have to get back to minimizing the suffering of the herd here in Hellas. Boy, I can’t believe I haven’t seen any female European voices telling Dijsselbloem to go stuff it where the sun don’t shine after his comments. Don’t you girls realize what he said?

 

Feb 072017
 
 February 7, 2017  Posted by at 2:35 pm Finance Tagged with: , , , , , , ,  


Paul Cézanne Les (Grandes) Baigneuses 1905

 

Two and a half weeks after the inauguration, and yes it’s only been that long, the media still don’t seem to have learned a single thing. They help the Trump campaign on an almost hourly basis by parroting whatever things, invariably judged as crazy, he says. One day it’s that negative polls are all fake news, the next it’s some list of underreported terror events. All of it gets an avalanche of attention provided by the very people who claim to be against Trump, but greatly help his cause by doing so.

Not a single thing learned. If Trump tweets tomorrow that tomatoes are really fruits and he’s going to have someone draw up a law to make them so, or that Lego should be recognized as an official building material in order to have the Danes, too, pay for the wall, it will be on the front page of every paper and the opening item for every TV news show. The crazier he makes them, the more serious they are taken. The echo chamber is so eager to incessantly repeat to itself and all its inhabitants that he’s a crazy dude, it’s beyond embarrassing.

And it takes us ever further away, and rapidly too, from any serious discussion about serious issues, the one very thing that the Trump empire desperately calls for. The press should simply ignore the crazy stuff and focus on what’s real, but they can’t bring themselves to do so for fear of losing ratings and ad revenues. All Trump needs to do, and that’s not a joke, is to fart or burp into their echo chamber and they’ll all be happy and giddy and all excited and self-satisfied. A spectacle to behold if ever there was one.

 

British House of Commons Speaker John Bercow can play that game too. He has loudly advertized his refusal to let Trump address UK politicians in the House of Commons and the House of Lords: “An address by a foreign leader to both houses of Parliament is not an automatic right, it is an earned honor..” It’s an honor recently gifted to the likes of China President Xi Jinping and the Emir of Kuwait. Fine and upstanding gentlemen in the tradition Britain so likes, nothing like the American President whom he accuses of racism and sexism.

The racism part ostensibly is a reaction to Trump’s Muslim ban, which, nutty though it is, is not a Muslim ban because most Muslims are not affected by it, and besides, ‘Muslim’ is not a race. So maybe Bercow would care to explain the ‘racism’ bit. Has anyone seen the British press pressuring him to do so? Or, alternatively, has anyone seen a thorough analysis of the British role, though its military and its weapons manufacturers, in the premature deaths in the Middle East and North Africa of many thousands of men, women and children belonging to the Muslim ‘race’? Not me.

The ‘sexism’ accusation refers to Trump’s utterances on for instance the Billy Bush tape(s), and by all means let’s get the Donald to comment on that. But this comes from a man who speaks as an official representative of the Queen of a country where child sex abuse is a national sport, from politics to churches to football, where literally thousands of children are trying to speak up and testify, after having been silenced, ignored and ridiculed for years, about the unspeakable experiences in their childhood. Surely someone who because of his job description gets to speak in the name of the Queen can be expected to address the behavior of her own subjects before that of strangers.

Yeah, that Trump guy is a real terrible person. And he should not be allowed to speak to a chamber full of people directly responsible for the death of huge numbers of children in far away sandboxes, for or the abuse of them at home. After all, we’re all good Christians and the good book teaches us about “the beam out of thine own eye”. So we’re good to go.

 

What this really tells you is to what extent the political systems in the US and the UK, along with the media that serve them, have turned into a massive void, a vortex, a black hole from which any reflection, criticism or self-awareness can no longer escape. By endlessly and relentlessly pointing to someone, anyone, outside of their own circle of ‘righteousness’ and political correctness, they have all managed to implant one view of reality in their voters and viewers, while at the same time engaging in the very behavior they accuse the people of that they point to. For profit.

Child sex abuse has been a staple of British society for a long time, we’re talking at least decades. Only now is it starting, but only starting, to be recognized as the vile problem it is. But still many Britons feel entirely justified in demonizing a man who once talked about touching the genitals of grown women. If that did happen against their will, it’s repulsive. But still, there’s that beam, guys. Read your bible.

The political/media black hole exists in many other countries too; we are truly entering a whole new phase in both domestic and global affairs. That is what allows for the Trumps and Le Pens of the world to appeal to people; there is nobody else left that people can have any faith in. The system(s) are broken beyond repair, and anyone perceived as belonging to them will be cast aside. Not all at the same time, but all of them nonetheless.

 

Whether you call the menu the people have been fed, fake or false or just plain nonsense, it makes no difference. The British House of Commons Speaker may not be such a bad guy inside, he’s probably just another victim of the falsehoods, denials and deceit spread 24/7. The difference between them and ordinary citizens is that Her Majesty’s representatives in the political field MUST know. They get paid good salaries to represent the Queen’s subjects, and looking the other way as children get assaulted and raped does not fit their job description.

That goes for representatives of the church (i.e. Jesus) just as much of course, and for the execs at the BBC, but about as many of those people are behind bars as there are bankers. For anyone at all at any of these institutions to now speak with great indignation about Trump’s alleged racism and sexism is the very core of all of their problems, the very reason why so many turn their backs on them. It shows that the very core or our societies is rotten, and the rot is spreading.

We are facing a lot of problems, all of us, in many different ways, financially, politically, morally. But our problem is not called Donald Trump. And we need to stop pretending that it is. We are the problem. We allow our governments to tell our armies to bomb and drone innocent people while we watch cooking shows. We have believed, as long as we’ve been alive, whatever the media feed us, without any critical thought, which we reserve for choosing our next holiday destination.

The longer this braindead attitude prevails, the worse things will get, and the more Trumps will surface as leaders of their respective countries. And the longer the attitude prevails, the more anger we will spread in those parts of the world that do not belong to our ‘chosen’ societies. And for that we will have only ourselves to blame. Not Trump.

Oct 112016
 
 October 11, 2016  Posted by at 8:42 am Finance Tagged with: , , , , , , , , , ,  Comments Off on Debt Rattle October 11 2016


NPC Grand Palace shoe shining parlor, Washington DC 1921

“How Do You Have Capitalism Without Any Cost Of Capital?” (BBG)
7 in 10 Americans Have Less Than $1,000 In Savings (MF)
After Becoming Debt Slaves, Millennials Get Blamed for Lousy Economy (WS)
S&P 500 Triangle Chart Pattern ‘Warns Of A Big Selloff’ (MW)
The Bank of Mom and Dad is Australia’s Fastest-Growing Housing Lender (BBG)
Goldman Warns China’s Outflows May Be Worse Than They Look (BBG)
‘Why Do They Hate Us So?’-A Western Scholar’s Reply to a Russian Student (SC)
Remainers, Brexit, Racism and a Self-Fulfilling Prophecy (Hannan)
Greece Gets Fresh Loan Payout as Euro Area Looks to Help on Debt (BBG)
Brazil Votes To Amend Constitution, Ban Spending Increases For 20 Years (BBG)
Global Clean Energy Investment Dropped 43% in Worst Quarter Since 2013 (BBG)
Russia’s Rosneft Boss Sechin Says No To OPEC Oil Cut/Freeze (R.)
Britain’s Nuclear Cover-Up (NYT)

 

 

Titans of finance gather and sulk.

“How Do You Have Capitalism Without Any Cost Of Capital?” (BBG)

Mary Callahan Erdoes, one of JPMorgan Chase’s most senior executives, summed up her industry’s mood like this: “There is no excitement,” she told throngs of bankers gathered in Washington. “There is a lot of handwringing.” Again and again, speakers at the Institute of International Finance’s three-day meeting in Washington, which wrapped up Saturday, bemoaned the inability of central banks to rev up economic growth, as well as the drag of tougher regulations and the looming impact of Brexit. Concerns over Deutsche Bank’s mounting legal costs deepened the gloom. Slow growth is leaving companies little reason to expand, fueling the public’s frustration and giving rise to extreme political views and nationalism, said Erdoes, 49, who runs JPMorgan’s asset-management operations.

Low interest rates – instead of better fiscal stimulus – are taking a toll on the entire system, she said. “We had a very smart economist at JPMorgan ask me the following question: How do you have capitalism without any cost of capital? And therein lies the problem.” [..] Goldman Sachs President Gary Cohn called the world’s central banks an “ineffective cartel,” as actions in Europe and Japan lead to negative rates and hamstring other policy makers. The outlook for low growth is long-term, he said. “I don’t see this changing,” Cohn said Friday. “We keep saying we’re getting closer to the end, but I don’t think we’re getting closer to the end.”

Read more …

I’m not sure how one writes an article like this and completely fails to mention that for millions of Americans, it’s not a matter of bad saving habits, but of spending everything on the basics.

7 in 10 Americans Have Less Than $1,000 In Savings (MF)

The U.S. is often referred to as the land of economic opportunity. Apparently, it’s also the land of consumption and “spend everything you’ve got.” We don’t have to look far for confirmation that Americans are generally poor savers. Every month the St. Louis Federal Reserve releases data on personal household savings rates. In July 2016, the personal savings rate was just 5.7%. Comparatively, personal savings rates in the U.S. 50 years ago were double where they are today, and nearly all developed countries have a higher personal savings rate than the United States. In other words, Americans are saving less of their income than they should be — the recommendation is to save between 10% and 15% of your annual income — and they’re being forced to do more with less in terms of investing.

However, new data emerged this week from personal-finance news website GoBankingRates that shows just how dire Americans’ savings habits really are. Last year, GoBankingRates surveyed more than 5,000 Americans only to uncover that 62% of them had less than $1,000 in savings. Last month GoBankingRates again posed the question to Americans of how much they had in their savings account, only this time it asked 7,052 people. The result? Nearly seven in 10 Americans (69%) had less than $1,000 in their savings account. Breaking the survey data down a bit further, we find that 34% of Americans don’t have a dime in their savings account, while another 35% have less than $1,000. Of the remaining survey-takers, 11% have between $1,000 and $4,999, 4% have between $5,000 and $9,999, and 15% have more than $10,000.

Furthermore, even though lower-income adults struggle with saving money more than middle- and upper-income folks, no income group did particularly well. Some 29% of adults earning more than $150,000 a year, and 44% making between $100,000 and $149,999, had less than $1,000 in savings. Comparatively, 73% of the lowest income adults (those earnings $24,999 or less annually) had less than $1,000 in their savings account. There was even minimal difference between multiple generations of Americans. From seniors aged 65 and up to young millennials aged 18 to 24, between 62% and 72% of Americans had less than $1,000 in a savings account.

Read more …

Great little piece by Wolf Richter.

After Becoming Debt Slaves, Millennials Get Blamed for Lousy Economy (WS)

Over the past few days, the Diamond Producers Association launched its first new ad campaign in five years after watching retail sales of diamond jewelry slow down, as Millennials built on the habit pioneered by prior generations of delaying or not even thinking about marriage, and thus not being sufficiently enthusiastic about buying diamond engagement rings. The campaign, according to Adweek, is designed to motivate Millennials “to commemorate their ‘real,’ honest relationships with diamonds, even if marriage isn’t part of the equation.” Mother New York, the agency behind the campaign, spent months interviewing millennials, according to Quartz, and learned that they associated diamonds with a “fairytale love story that wasn’t relevant to them.”

So the premium jewelry industry, seeing future profits at risk, needs to do something about that. A year ago, it was Wall Street – specifically Goldman Sachs – that did a lot of hand-wringing about millennials. “They don’t trust the stock market,” Goldman Sachs determined in a survey. Only 18% thought that the stock market was “the best way to save for the future.” It’s a big deal for Wall Street because millennials are now the largest US generation. There are 75 million of them. They’re supposed to be the future source of big bonuses. Wall Street needs to figure out how to get to their money. The older ones have seen the market soar, collapse, re-soar, re-collapse, re-soar…. They’ve seen the Fed’s gyrations to re-inflate stocks. They grew up with scandals and manipulations, high-frequency trading, dark pools, and spoofing.

They’ve seen hard-working people get wiped out and wealthy people get bailed out. Maybe they’d rather not mess with that infernal machine. And today, the Los Angeles Times added more fuel. “They’re known for bouncing around jobs, delaying marriage, and holing up in their parents’ basements,” it mused. Everyone wants to know why millennials don’t follow the script. Brick-and-mortar retailers have been complaining about them for years, with increasing intensity, and a slew of specialty chains have gone bankrupt, a true fiasco for the industry, even as online retailers are laughing all the way to the bank. “For starters, millennials are not big spenders, at least not in the traditional sense,” the Times said. Yet most of them spend every dime they earn, those that have decent jobs. But much of that spending goes toward their student-loan burden and housing.

Read more …

Trying to fit human behavior into triangles.

S&P 500 Triangle Chart Pattern ‘Warns Of A Big Selloff’ (MW)

The S&P 500 is moving fast toward an impending breakout that could be bad news for investors. “And it’s gonna be big, by all accounts,” said Carter Braxton Worth, a technical analyst at research firm Cornerstone Macro. The S&P 500 has been trading within a “symmetrical triangle” on a number of time scales, as the index traced out a pattern of rising lows and falling highs. Since the upper and lower boundary lines are narrowing to a point, it’s just a matter of time before the S&P 500 breaks above or below one of them. “It is a circumstance where buyers and sellers are matched off so evenly that purchases being made by those who like a particular security are in the same order of magnitude as the selling being done by those who dislike the security,” Worth wrote in a note to clients.

His research suggests that the resolution of these standoffs is usually “aggressive,” with the index moving past the declining or rising trendlines “in a meaningful way.” Many technicians believe triangles represent continuation patterns, or periods of pause in a bigger trend, which means they should eventually be resolved in the direction of the preceding trend. In the S&P 500’s case, that would mean a big rally is coming. But Worth said that based on his interpretation of the charts, the S&P 500’s triangle looks more like a reversal pattern. “We believe the current formation is a setup for a move lower,” Worth said.

Read more …

Hoping that just this once it’s different.

The Bank of Mom and Dad is Australia’s Fastest-Growing Housing Lender (BBG)

Beset by lending curbs and bubble-esque prices, first-time home buyers in Australia are turning to a rapidly growing source of finance: The Bank of Mom and Dad. More parents are taking advantage of record-low interest rates to refinance their properties and help their grown-up kids onto the housing ladder amid sky-rocketing house values. Digital Finance Analytics estimates the number of Aussies getting help from their parents has soared to more than half of first-home buyers from just 3% six years ago. Australia’s housing rally has favored baby-boomers and locked out youth, compounding an inter-generational shift of wealth.

As the number of bank loans to first-time buyers dwindles, the average slice of cash handed to them by parents has almost quadrupled in the past six years, DFA says. The downside: a market that the Reserve Bank of Australia is already wary of may get further inflated. First-time buyers are “being infected by the notion that property is about wealth building, rather than somewhere to live,” said Martin North, Principal at DFA. That “may be tested if interest rates rise later, or property prices fall from their current illogical stratospheric levels.” [..] The boom is turning some homes into cash dispensers. More than two thirds of owners that refinanced houses worth more than A$750,000 did so to extract capital for reasons including helping their kids. Near the start of 2010, the average helping hand from parents was about A$23,000; today, it’s more than A$80,000.

Read more …

“..they don’t have a strong willingness to hold the yuan due to depreciation expectations..” Does that rhyme with the SDR basket thing?

Goldman Warns China’s Outflows May Be Worse Than They Look (BBG)

China’s currency outflows may be bigger than they look, with Goldman Sachs warning that a rising amount of capital is exiting the country in yuan rather than in dollars. While the nation’s foreign-exchange reserves have stabilized and lenders’ net foreign-exchange purchases for clients have fallen close to a one-year low, official data show that $27.7 billion in yuan payments left China in August. That’s compared with a monthly average of $4.4 billion in the five years through 2014. Such large cross-border moves can’t be explained by market-driven factors and need to be taken into account when measuring currency outflows, according to MK Tang, Hong Kong-based senior China economist at Goldman Sachs.

Any sign of increased capital outflows could disturb a recent calm in China’s foreign-exchange market, adding to pressure from a potential Federal Reserve interest-rate increase and denting the yuan’s image as the world’s newest global reserve currency. The yuan fell to a six-year low on Monday, adding to outflow pressures. “There is some window guidance from the central bank that limits companies’ dollar conversion onshore, so they need to move the money overseas in yuan,” said Harrison Hu, chief Greater China economist at RBS in Singapore. “But they don’t have a strong willingness to hold the yuan due to depreciation expectations, so they sell it to offshore banks. This pressures the offshore yuan’s exchange rate.”

[..] Goldman Sachs started including yuan funds in its analysis of outflows in July, after noting that cross-border movement of the currency masked actual pressures. The bank estimates that 56% and 87% of outflows took place through the offshore yuan market in July and August, respectively.

Read more …

Do read the whole thing for a good history lesson.

‘Why Do They Hate Us So?’-A Western Scholar’s Reply to a Russian Student (SC)

In 2000 when Putin was elected president, he publically promoted security and economic cooperation with Europe and the United States. After 9/11, he offered real assistance to Washington. The United States accepted the Russian help, but continued its anti-Russian policies. Putin extended his hand to the west, but on the basis of five kopeks for five kopeks. This was a Soviet policy of the interwar years. It did not work then and it does not work now. In 2007 Putin spoke frankly at the Munich conference on Security Policy about overbearing US behaviour. The “colour revolutions” in Georgia and the Ukraine, for example, and the Anglo-American war of aggression against Iraq raised Russian concerns. US government officials did not appreciate Putin’s truth-telling which went against their standard narrative about «exceptionalist» America and altruistic foreign policies to promote «democracy».

Then in 2008 came the Georgian attack on South Ossetia and the successful Russian riposte which crushed the Georgian army. It’s been all down-hill since then. Libya, Syria, Ukraine, Yemen are all victims of US aggression or that of its vassals. The United States engineered and bankrolled a fascist coup d’état in Kiev and has attempted to do the same in Syria reverting to their “Afghan policy” of bankrolling, supplying and supporting a Wahhabi proxy war of aggression against Syria. Backing fascists on the one hand and Islamist terrorists on the other, the United States has plumbed the depths of malevolence. President Putin and Russian foreign minister Sergei Lavrov have made important concessions, to persuade the US government to avert catastrophe in the Middle East and Europe.

To no avail, five kopeks for five kopeks is not an offer the United States understands. Assymetrical advantages is what Washington expects. One cannot reproach the Russian government for trying to negotiate with the United States, but this policy has not worked in the Ukraine or Syria. Russian support of the legitimate government in Damascus has exposed the US-led war of aggression and exposed its strategy of supporting Al-Qaeda, Daesh, and their various Wahhabi iterations against the Syrian government. US Russophobia is redoubled by Putin’s exposure of American support for Islamist fundamentalists and by Russia’s successful, up to now, thwarting of US aggression. Who does Putin think he is? From my observations, I would reply that President Putin is a plain-spoken Russian statesman, with the support of the Russian people behind him.

For five kopeks against five kopeks, he will work with the United States and its vassals, no matter how malevolent they have been, if they adopt less destructive policies. Unfortunately, recent events suggest that the United States has no intention of doing so. After one hundred years of almost uninterrupted western hostility, no one should be under any illusions. So then, the question is “Why do they hate us so?” Because President Putin wants to build a strong, prosperous, independent Russian state in a multi-polar world. Because the Russian people cannot be bullied and will defend their country tenaciously. “Go tell all in foreign lands that Russia lives!» Prince Aleksandr Nevskii declared in the 13th century: «Those who come to us in peace will be welcome as a guest. But those who come to us sword in hand will die by the sword! On that Russia stands and forever will we stand!”

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Yeah, Daniel Hannan has lots of stuff wrong with him. But Britain must have this conversation regardless of that. I picked this piece up on Twitter, with this accompanying comment: “No aspect of Brexit is Remain voters’ fault in any way, or to any extent at all.” I don’t know if that was meant sarcastically, but I would certainly hope so. Without that conversation things can only get worse. Remainers must try harder to understand why Brexit happened. If nothing else, I would think they’re at least ‘guilty’ of not seeing it coming. And perhaps also of seeing Brexit as the problem, not a mere symptom.

Remainers, Brexit, Racism and a Self-Fulfilling Prophecy (Hannan)

Shortly after the EU referendum, several thousand young people marched through London demanding a rerun. I happened to be sitting next to three of them on a train as I travelled into the capital that morning. They evidently recognised me right away as an Evil Tory Leaver, but we were past Clapham Junction before one of them plucked up the courage to talk to me. “Are you Daniel Hannan? I just wanted to say that what you’ve done is terrible. We’re not a racist country. You’ve taken away our future.” “Is that so? Out of interest, can you tell me who the President of the European Commission is?” “No. What’s that got to do with it?” “Can you name a single European Commissioner, come to that? Do you know what our budget contribution will be this year? Or what the difference is between a Directive and a Regulation?”

She was affronted by the questions. So were her two friends with their “I [heart] EU” placards. They weren’t interested in details. For them, it was about values. Are you a decent, internationalist, compassionate person? Or are you a selfish bigot? Let’s leave aside the fact that no one would ever vote on any ballot paper for a “selfish bigot” option. Their determination to approach the issue in terms of character, rather than cost-benefit, explains why they were so upset – and why, even now, some Remain voters struggle to accept the outcome. In my experience, the 48% who voted Remain fall into two categories. There are those who were making a judgement as to where Britain’s best options lay. They could see that the is EU flawed.

They were well aware of the corruption, the lack of democracy, the slow growth. But they took the view that, on balance, the disruption of leaving would outweigh the gains. These people, by and large, now want to make a success of things, and are keen to maximise our opportunities. Then there were those like my companions on South West Trains, for whom the issue was not financial but somehow moral. For them, the EU wasn’t the grubby and self-interested body that exists in reality; rather, it was a symbol of something better and purer, an embodiment of the dream of peace among nations. They never heard, because they never wanted to hear, the democratic or economic arguments against membership. As far as they were concerned, the only possible reason for voting Leave was chauvinism.

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“Euro Area Looks to Help on Debt” sounds like the epitomy of cynicism. The Eurogroup withheld €1.7 billion, to Greece’s surprise, because it wanted to assess A) whether a June payment was fully used to pay off third parties, and B) whether the government had squeezed its people enough (reforms). The delay is convenient for Brussels because it also delays debt restructuring talks once again, for the umpteenth time. And without those talks, the IMF won’t commit. Rinse and repeat.

Greece Gets Fresh Loan Payout as Euro Area Looks to Help on Debt (BBG)

The euro area authorized a €1.1 billion payment to Greece and signaled a further €1.7 billion would follow this month, saying the region’s most indebted nation has made progress in overhauling its economy. The green light, given by euro-area finance ministers on Monday in Luxembourg, removes a hurdle on Greece’s path to debt relief on which Prime Minister Alexis Tsipras has staked part of his political future. The country had to fulfill 15 conditions on matters such as selling state assets and improving bank governance to get the first payout.

It “was unanimously decided that Greece had completed the 15 milestones, so we can proceed to the €1.1 billion disbursement,” Greek Finance Minister Euclid Tsakalotos told reporters after the meeting, saying the talks produced a “very good” outcome for his country. The delay in getting an endorsement for the remaining sum, which is tied to the clearing of arrears, is merely “technical,” he said. Greece, in its third bailout since 2010, is struggling to right an economy that is poised to undergo its eighth annual contraction in the past nine years. A second review of the country’s rescue program will pave the way for a possible restructuring of Greece’s debt, which the IMF says is a necessary condition for its future involvement.

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This feels like a military coup, a chapter straight out of the Shock Doctrine. Stocks go up because people’s lives go down.

Glenn Greenwald on Twitter: “Brazil’s lower House- in the face of negative growth- just voted to amend the Constitution to ban spending increases for 20 years..” “This extreme austerity in Brazil – enabled by impeachment- is being imposed in world’s 7th largest economy, 5th most populous country (200m). ”

Nomi Prins on Twitter: “Brazil’s coup was about advancing western speculative market access & squashing domestic population needs – for decades…bastards.”

Brazil Votes To Amend Constitution, Ban Spending Increases For 20 Years (BBG)

The Ibovespa rose to a two-year high and the real gained as commodities advanced and as expectations mounted that lawmakers will approve a bill to cap spending, a key measure in President Michel Temer’s plan to trim a budget deficit and rebuild confidence in Brazil. The benchmark equity index rose 0.9% and the currency climbed 0.5% Monday in Sao Paulo. [..] Brazilian stocks have gained 75% in dollar terms this year and the real has strengthened 24%, the best performances in the world, on bets that a new government would be able to pull the country out of its worst recession in a century.

Temer, who formally replaced impeached former President Dilma Rousseff in August, said the administration should have enough votes to drive through a budget bill Monday that’s seen as a vital first step toward his economic reforms. The proposal to amend the Constitution to set limits on government spending for as long as 20 years must be approved by at least three-fifths of both chambers of Congress. “The market is very optimistic over this legislation,” said Paulo Figueiredo, an economist at FN Capital in Petropolis, Brazil. “New bets on local assets depend a lot on the signals that will come from this vote.”

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Bubble?!

Global Clean Energy Investment Dropped 43% in Worst Quarter Since 2013 (BBG)

Global investment in clean energy fell to the lowest in more than three years as demand for new renewable energy sources slumped in China, Japan and Europe. Third-quarter spending was $42.4 billion, down 43% from the same period last year and the lowest since the $41.8 billion reported in the first quarter of 2013, Bloomberg New Energy Finance said in a report Monday. Financing for large solar and wind energy plants sank as governments cut incentives for clean energy and costs declined, said Michael Liebreich at the London-based research company. Total investment for this year is on track to be “well below” last year’s record of $348.5 billion, according to New Energy Finance.

The third-quarter numbers “are worryingly low even compared to the subdued trend we saw” in the first two quarters, Liebreich said in a statement. “Key markets such as China and Japan are pausing for a deep breath.” Part of the reason for the steep decline in the quarter was a slowdown following strong spending in the first half of the year on offshore wind. Investors poured $20.1 billion into European offshore wind farms in the first and second quarters, “a runaway record,” according to Abraham Louw, an analyst for energy economics with New Energy Finance. That was followed by a “summer lull,” with $2.4 billion in spending in the third quarter.

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So much for that.

Russia’s Rosneft Boss Sechin Says No To OPEC Oil Cut/Freeze (R.)

Igor Sechin, Russia’s most influential oil executive and the head of Kremlin energy champion Rosneft, said his company will not cut or freeze oil production as part of a possible agreement with OPEC. His comments underline how difficult it is for Russia to get its oil companies to freeze or cut output as part of a potential deal with OPEC designed to support oil prices. President Vladimir Putin told an energy congress on Monday that Russia was ready to join the proposed OPEC cap, but did not provide any details. “Why should we do it?” Sechin, known for his anti-OPEC position, told Reuters in Istanbul on Monday evening, when asked if Rosneft, which accounts for 40% of Russia’s total crude oil output, might cap its own output.

Sechin said he doubted that some OPEC countries, such as Iran, Saudi Arabia and Venezuela would cut their output either, saying that an increase in oil prices above $50 per barrel would make shale oil projects in the United States profitable. There have been several attempts in the past for Russia and OPEC to join forces to stabilize oil markets. Those efforts have never come to pass however. Oil prices surged on Monday after Putin’s comments amid hopes that a two-year price slide could be halted.

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Uglee!!!

Britain’s Nuclear Cover-Up (NYT)

Last month, the British government signed off on what might be the most controversial and least promising plan for a nuclear power station in a generation. Why did it do this? Because the project isn’t just about energy: It’s also a stealth initiative to bolster Britain’s nuclear deterrent. For years, the British government has been promoting a plan to build two so-called European Pressurized Reactors (EPR) at Hinkley Point C, in southwest England. It estimates that the facility will produce about 7% of the nation’s total electricity from 2025, the year it is expected to be completed. The EPR’s designer, Areva, claims that the reactor is reliable, efficient and so safe that it could withstand a collision with an airliner.

But the project is staggeringly expensive: It will cost more than $22 billion to build and bring online. And it isn’t clear that the EPR technology is viable. No working version of the reactor exists. The two EPR projects that are furthest along — one in Finland, the other in France — are many years behind schedule, have hemorrhaged billions of dollars and are beset by major safety issues. The first casting of certain components for the Hinkley Point C reactors left serious metallurgical flaws in the pressure vessel that holds the reactor core. In 2014, the Cambridge University nuclear engineer Tony Roulstone declared the EPR design “unconstructable.”

The lead builder of the EPR, the French utility company Electricité de France, faced a mutiny this year: Its unions fought the Hinkley Point project, fearing it might bring down the company. E.D.F.’s chief financial officer has resigned, arguing that it would put too much strain on the company’s balance sheet. But the British government continues to act as though it wants the Hinkley project to proceed at almost any price. In return for covering about one-third of the costs, the Chinese state-run company China General Nuclear Power Corporation will take about one-third ownership in the project. (A subsidiary of E.D.F. owns the rest.) The British government has also provisionally agreed to let China build a yet-untested Chinese-designed reactor in Bradwell-on-Sea, northeast of London, later.

[..] The British government has [..] guaranteed that investors in the Hinkley project will get $115 per megawatt-hour over 35 years. This is approximately twice the price of electricity today [..]. If the market price of electricity falls below that rate, a government company is contractually bound to cover the difference — with the extra cost passed on to consumers. Price forecasts have dropped since the deal was struck: This summer the government, revising estimates, said differential payments owed under the contract could reach nearly $37 billion. If the Hinkley plan seems outrageous, that’s because it only makes sense if one considers its connection to Britain’s military projects — especially Trident, a roving fleet of armed nuclear submarines, which is outdated and needs upgrading.

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Jun 042016
 
 June 4, 2016  Posted by at 8:25 am Finance Tagged with: , , , , , , , ,  


Ali escorted to jail April 28 1967

“Boxing legend dies”, is what most headlines say. And the news was first reported on sports pages, though it did soon move to frontpages, fast.

Muhammad Ali was so much more than a boxing legend. So much more that to mention boxing first doesn’t do him justice. Ali was first and foremost a very brave and intelligent man, who changed America for the better. Or should we say: changed Americans?

He grew up in an intensely racist, segregated and divided America, and in the arguably most divided part of that America. That shaped him. Boxing was merely his way out, his way to fight discrimination and racism.

But it didn’t come easy. His was a lonely fight, for most of it. But then, he wasn’t the greatest for nothing.

The only people who stood by him were the Nation of Islam, who made him say some crazy things and from whom he later split acrimoniously; Ali wanted peace, they, not so much. Ali found he was much closer to Martin Luther King at heart. But still.

I saw some numbers flash by earlier. America’s been at war in 223 of the 240 years of its existence since 1776.

Ali refused to go. No matter what the cost. He could easily have been killed for doing it, or locked away for the rest of his life, and he knew it. But he didn’t even flinch. He would not fight the fight of those who set their dogs on his people. He would instead fight against them.

“I am America. I am the part you won’t recognize… But get used to me. Black, confident, cocky; my name, not yours; my religion, not yours; my goals, my own; get used to me.”

“Why should they ask me to put on a uniform and go 10,000 miles from home and drop bombs and bullets on brown people in Vietnam while so-called Negro people in Louisville are treated like dogs and denied simple human rights?

No, I’m not going 10,000 miles from home to help murder and burn another poor nation simply to continue the domination of white slave masters of the darker people the world over.

This is the day when such evils must come to an end. I have been warned that to take such a stand would cost me millions of dollars. But I have said it once and I will say it again. The real enemy of my people is here.

I will not disgrace my religion, my people or myself by becoming a tool to enslave those who are fighting for their own justice, freedom and equality. If I thought the war was going to bring freedom and equality to 22 million of my people they wouldn’t have to draft me, I’d join tomorrow.

I have nothing to lose by standing up for my beliefs. So I’ll go to jail, so what? We’ve been in jail for 400 years.”

(NOTE: Whether Ali ever actually said: “No Vietcong ever called me a nigger” is not entirely clear. But he did say this:)

“My conscience won’t let me go shoot my brother, or some darker people, or some poor hungry people in the mud for big powerful America. And shoot them for what? They never called me nigger, they never lynched me, they didn’t put no dogs on me, they didn’t rob me of my nationality, rape and kill my mother and father… Shoot them for what? How can I shoot them poor people? Just take me to jail.”

Whether Ali was the greatest American alive when he died a few hours ago is of course a personal view. That he was way up there is beyond dispute. And he had been there for 50 years, while he was still alive. Oh, yeah, and he was a good boxer too. And very pretty.

Jan 252016
 
 January 25, 2016  Posted by at 10:48 am Finance Tagged with: , , , , , , , , ,  


Harris&Ewing “Pennsylvania Avenue with snow, Washington, DC” 1918

Oil Falls 4% On Swelling Oversupply
Commodities Stocks Sink As Oil Resumes Downward Slide (FT)
Oil Price Crash Is Completely Changing The Industry’s Landscape (BIA)
US Short Sellers Target China’s Alibaba (BBG)
China Pledges Steel, Coal Capacity Cuts in Supply-Side Reforms (BBG)
China’s Migrants Go Home – And Stay There (BBG)
China’s Central Bank Prioritizes Strong Yuan (WSJ)
The East Knows The West Is Bankrupt (Holter)
Don’t Forget the Irish When Looking at New Risks in Euro Region (BBG)
There’s a Giant Elephant at the Bank of England (BBG)
The End Of Economic Growth (Robert Gordon)
One Year On, Syriza Has Sold Its Soul For Power (Lapavitsas)
Greece On The Brink Of ‘Education Tragedy’ (EurActiv)
We Produced Enough Plastics Since WWII To Cover The Entire Earth (Guardian)
Racism ‘Is At The Heart Of The Australian Dream’ (Guardian)
Merkel’s Party, Sliding In Polls, Weighs German ‘Border Centres’ (Reuters)
Greek Islanders To Be Nominated For Nobel Peace Prize (Observer)
Sealing Greek Sea Border Is Impossible (AP)

Recovery, anyone? The new slump has smoothed a bit as of now.

Oil Falls 4% On Swelling Oversupply

Oil prices fell 4% on Monday as Iraq announced record-high oil production feeding into a heavily oversupplied market, wiping out much of the gain made in one of the biggest-ever daily rallies last week. Brent crude, the global benchmark, was down $1.35 at $30.83 a barrel at 0851 GMT, losing more than 4% from Friday’s closing price, when Brent surged 10%. U.S. crude traded $1.15 lower at $31.04 a barrel, regaining its unusual premium to Brent prices. Iraq’s oil ministry told Reuters on Monday oil output had reached a record high in December. Its fields in the central and southern region produced as much as 4.13 million barrels a day, the government said.

“The news that Iraq has probably hit another record builds on the oversupply sentiment,” said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam. “The oversupply will keep markets depressed and prices low, and on the other hand short positions are in excessive territory,” he said. Indonesia’s OPEC governor said that support among OPEC for taking steps to prop up crude prices is slim, with only one OPEC country supporting an emergency meeting over the matter.

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Bad Hair Groundhog Day.

Commodities Stocks Sink As Oil Resumes Downward Slide (FT)

Oil prices are sinking again, fast, and miners and commodities stocks are once again finding themselves in that all-too familiar position at the bottom of the FTSE 100. As fastFT reported earlier, oil prices are once again heading south after a short-lived rally last week. Brent crude is falling 3.7% at publication time to $30.99 a barrel while WTI, the US benchmark, is down 3.91% at $30.93 a barrel. There had been hopes that the worst may be over for oil prices but clearly the market didn’t get the memo today. Miners and commodities stocks are once again having another bad today.

At publication time:
Anglo American is 3.4% lower at 219p
BHP Billiton is down 2.6% at 632.1p
Rio Tinto is losing 2.6% to £16.10
Copper miner Antofagasta is off 2.4% at 362.5p.
BP is dropping 2.4% to 344.2p.

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A worldwide event.

Oil Price Crash Is Completely Changing The Industry’s Landscape (BIA)

The crash in oil, which has seen the price of crude fall by more than 75% in the last 18 months, is fundamentally changing the landscape of the resources industry in the UK as big numbers of oil firms go into insolvency, or look to take advantage of rivals’ weaknesses and increase their M&A activity. A survey released by accountancy firm Moore Stephens this week showed that the number of UK-based oil and gas companies folding jumped by more than 55% in 2015, with 28 firms entering insolvency, compared to 18 over the course of 2014. In its report, Moore Stephens called the rise in failing oil and gas firms “an almost inevitable result” of the crash in the price of oil, and said that upwards of £140 billion ($200 billion) worth of projects are likely to have been cancelled thanks to the crash.

Moore Stephens’ head of restructuring and insolvency, Jeremy Willmont said: “Oil and gas service companies expanded their businesses over the last decade based on an oil price well above the current one.” “The pain caused by the oil price fall has translated into a rising tide of financial distress across the sector,” he added. The contrast between 2015, and 2010, when oil was on its way up from its last crash in 2008, is pretty stark. According to the research, just four oil and gas companies went under that year. Essentially, the number of oil companies going bust has increased by 600% in just five years. A separate survey, released by law firm Pinsent Mason, said that 90% of those who responded expect the number of M&A deals to rise in 2016, while 30% think that there’ll be a “major surge” and around two thirds believe that Britain’s oil and gas sector is a good area for acquisitions.

In the last year or so, the number of new oil projects has slowed significantly as fewer and fewer can be profitable thanks to the rock bottom price of the commodity. This is particularly true in Britain, where producing a barrel of oil now costs more than double its market price. 2015 was a record breaking year for mergers and acquisitions, with more than $5 trillion worth of deals taking place last year, largely driven by big healthcare deals, like the join up of pharma firms Pfizer and Allergan. One of the most prominent deals, which is set to be completed pretty soon, is the merger between BG Group and Shell, both FTSE100 listed oil and gas giants.

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A very strong indicator of just how badly China is doing. Alibaba was supposed to be bigger than Apple, Amazon.

US Short Sellers Target China’s Alibaba (BBG)

U.S. short sellers have pushed bets against Alibaba to the highest in more than 14 months on concern that China’s deepest economic slowdown since 1990 will only get worse. Short interest in China’s biggest online retailer surged to 7.5% of shares outstanding on Jan. 21, the highest since November 2014, according to data compiled by Markit and Bloomberg. That is more than double from a Dec. 1 low. Bearish bets on rival JD.com have hovered around 2% since last month. Pessimists are once again taking aim at Alibaba – a bellwether for U.S. investor sentiment on China – as mainland stocks entered a bear market last week. Those wagers are already starting to pay off as a selloff since the start of the year sent the American depositary receipts of Alibaba down more than 13%.

Investors see Alibaba as a stock that reflects the state of the Chinese economy, said Henry Guo at Summit Research, who has a buy rating on the stock. “With China’s economic outlook worsening, that’s just an easy way for people to have short China exposure,”
China’s top leadership has signaled it may accommodate more economic slackness as officials tackle delicate tasks such as reducing excess capacity. The world’s second-largest economy will slow to 6.5% this year and 6.3% next year, according to the median of economist estimates. At a corporate level, counterfeit products and accounting frauds of Alibaba are also on the mind of investors since the company’s record 2014 debut on the New York Stock Exchange. Kynikos Associates LP founder Jim Chanoswarned against the stock in November, according to a CNBC report. In December, Russian billionaire Alisher Usmanov said he has started to sell his stake in the e-commerce giant.

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How to make trouble sound like ‘I meant to do that’.

China Pledges Steel, Coal Capacity Cuts in Supply-Side Reforms (BBG)

China is targeting further cuts in crude steel production capacity by as much as 150 million tons and “large scale” reductions in coal output as part of supply-side measures aimed at curbing overcapacity and excess labor in state-owned industries. The country has lowered steel production by about 90 million tons “in recent years” and will push to cut a further 100 million to 150 million tons, while “strictly controlling” steel capacity increases and halting new coal mine approvals, according to a Sunday statement on the Chinese government’s website, citing a State Council meeting on Jan. 22 chaired by Premier Li Keqiang. No time line was mentioned.

China has vowed in the past to curb capacity in industries such as coal and steel as the world’s second-largest economy slows amid a shift towards consumer-led growth. Still, it has struggled to meet stated coal capacity limits spelled out in the 12th Five-Year plan that ended last year, according to Bloomberg Intelligence. Coal demand in the country is also declining with the government keen to curb pollution. The government plans to set up a fund to help coal miners and steelmakers reduce their workforce and dispose of bad assets, Li said during a meeting in Shanxi province, according to a Jan. 7 China Central Television report. The financial help is dependent on the companies cutting capacity, he said.

As part of re-balancing the economy towards domestic consumption, the country’s cabinet also pledged to ease conditions for rural-to-urban migration and expand “new urbanization” trials to more regions, the government said in Sunday’s statement. China will “more aggressively develop” small- and medium-sized cities and give more administrative authority to areas with populations of more than 100,000, the government said. China will also expand shantytown development in major cities, while reducing the barriers to entry to attract private capital investment in transportation, underground pipe networks and other forms of construction, according to the statement.

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Manufacturing jobs are going going gone.

China’s Migrants Go Home – And Stay There (BBG)

Every year, tens of millions of China’s 246 million migrants return home to celebrate the Chinese New Year. It’s the world’s biggest annual migration, and it typically goes off smoothly. This year, however, something’s amiss. Although the holiday doesn’t start until Feb. 8, millions of workers – especially in the construction and electrical-appliance industries – have already returned home due to the country’s slowing economy. For local governments across China, this is raising a tough question: What happens if these laborers don’t go back to work after the holiday? The concern isn’t a new one. In early 2009, 20 million unemployed migrants returned home for the holidays in the wake of the global financial crisis, raising fears of social unrest. Labor riots did, in fact, take place.

But most of the unemployed appear to have gotten back to work when China’s monster stimulus kicked in later that year. This time is notably different. Prospects for a 2009-style stimulus are slim. More important, China is on the cusp of a long-term trend of reverse migration back to the countryside. This week, the National Bureau of Statistics reported that the migrant population dropped by 5.68 million in 2015 – its first decline in about three decades. Some of that decline is simple demographics, and parallels China’s rapidly shrinking labor force. But much of it is attributable to a slump in the labor-intensive manufacturing sector, and a steady improvement in rural economies.

These trends haven’t caught authorities completely off-guard: Despite a long-term commitment to urbanization (in 1980, China was 19.6% urbanized; today the figure is more than 50%), the government has recently directed more attention and money to rural development projects, ranging from infrastructure improvement to credit support for the country’s hundreds of millions of farmers. This year, rural per-capita income is expected to exceed 10,000 yuan for the first time, surpassing urban income growth for the fifth straight year. But just as economics were never the sole reason for moving to the city, many migrants also have non-economic motives for moving back home, including a desire to care for aging parents left behind and a hunger for uncontaminated food.

“The migrant workers are rooted in the countryside,” said Yang Tuan, a prominent sociologist at the China Academy of Social Science, in a September interview. “They have feelings for the land.” She predicted that reverse migration might peak in the next five to 10 years.

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It makes no difference what Beijing wants.

China’s Central Bank Prioritizes Strong Yuan (WSJ)

China’s central bank faces a tough balancing act, trying to ease credit in the financial system without adding to pressures weakening the Chinese currency. Concerns about the yuan and the annual cash crunch ahead of next month’s Lunar New Year holiday dominated a meeting held by the People’s Bank of China on Tuesday, according to minutes of the meeting reviewed by the WSJ and to accounts from banking executives close to the PBOC. Central bank officials delayed using a traditional credit-easing tool for fear that it could add more downward pressure on the yuan, according to the minutes and the executives. Instead, to meet the rising cash needs from banks, the central bank turned to short-term and medium-term loan facilities to pump about 1.6 trillion yuan ($243 billion) of temporary liquidity into the banking system in the past week.

The decision highlights the bank’s deepening dilemma in helping to cushion the slowing Chinese economy. Just a year ago, the PBOC addressed preholiday cash demands by resorting to a more typical method—cutting the amount banks are required to keep in reserve. Since then, the economic slowdown and volatility in the stock markets have led to a flood of capital leaving China, as Chinese investors seek better returns abroad. The yuan, also known as the renminbi, has been battered harder than the central bank would like, even as it faces calls to keep easing credit and rekindle growth. “Currently, we need to put a high emphasis on maintaining the renminbi’s stability when managing liquidity,” Zhang Xiaohui, an assistant governor at the central bank, said at the Tuesday meeting, according to the minutes.

Ms. Zhang said cutting the reserve requirement would send “too strong an easing signal,” so the bank should turn to other tools. A reduction in so-called reserve-requirement ratio frees up funds for banks to lend on a permanent basis, while injecting liquidity through short-term and medium-term tools means the money can be taken back by the central bank when those loans expire. Ms. Zhang told officials at the meeting that the combination of cuts to interest rates and reserve requirements made by the central bank in late October contributed to the pressure on the yuan. “Because of the double reductions, there was too much liquidity and depreciation pressure on the renminbi,” she said.

Ahead of Tuesday’s meeting, China’s big banks called on the central bank to cut the reserve requirement in the lead-up to the holiday. But the central bank balked at doing that because of worries over the stability of the yuan, the banking executives close to the PBOC said. “They decided to put off the reserve-requirement cut until later,” one of the executives said. The executive said the central bank would have to make the cut “at some point” because the surge in money leaving China, as well as the PBOC’s efforts to buy yuan to prop up its value, are squeezing liquidity.

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The west knows the east is bankrupt, too.

The East Knows The West Is Bankrupt (Holter)

[..] what would the world look like the day following a “truth bomb” dropped by Mr. Putin and the Chinese. Would Americans even notice if he documented several false flags or frauds embedded in U.S. finance such as outright monetization of U.S Treasuries? No, most certainly not. Americans would however notice if financial markets collapsed or were shut down. Russia and China know full well the situation in the West. It is a bankruptcy waiting to happen as everything is fractional reserve and running on maximum margin while the underlying system is shrinking and no longer supplying enough liquidity. The way I see it, the stage is truly set for a financial attack on anything and everything American. Is it implausible for the Saudis to announce they will sell oil in yuan to China?

Or Iran to withdraw their funds from U.S. institutions and then bid for gold with these funds? If the East does in fact have jamming or hacking capability of Western technology, is it far fetched for them to show it very publicly in one or several situations? How would the “bookies” react if they saw a prize fighter enter one of the later rounds with his hands tied behind his back? You can laugh at the above speculation if you choose but it is all quite plausible and actually probable if you look at where things are and what posturing has already been done leading up to this. Western markets, ALL markets are a fraud. Our Treasury market is one where the biggest buyer is “our self” …the Fed and the ESF.

We have already seen $1 trillion of foreign reserves offloaded with no effect on yield nor the dollar itself and NO ACCOUNTING ANYWHERE as to “who” bought these offloaded central bank reserves. Accounting fraud and no rule of law here, nothing to see …please move along! You can laugh if you want and say Saudi Arabia will never move toward the East … Saudi Arabia is now in very dire straits financially, who do you think they will side with when Western markets melt down? Do you really believe they will go down trying to support our dollar?

The stage has already been set. The East knows the West has bankrupted. They know we have no gold left because they have it! They can see the finances of the various cities, states and federal government. They know the situation in derivatives is one giant mountain of dynamite waiting for a spark. They know our rule of law is gone and bail ins of depositor funds is next. We are monetizing their sales of Treasury securities. “We” are fooling no one except ourselves. And by “ourselves” I am talking about the vast majority of the population who have grown to rely on the government for everything. Everyone knows we are broke, yet ask anyone and the odds highly favor you will hear “the government will never let it happen”. Even if you are silly enough to believe this you must ask yourself, what are the ramifications when markets become “make believe”?

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They’ll be picking them off one by one again. Bye, Draghi.

Don’t Forget the Irish When Looking at New Risks in Euro Region (BBG)

Ireland gets to decide on its next government as early as next month, and if elections in other countries once at the heart of the European debt crisis are anything to go by, investors should be wary. Portugal’s vote on Oct. 4 produced an inconclusive result, leading to weeks of brokering before Socialist leader Antonio Costatook power with promises to put the brakes on austerity measures. Bond yields have jumped to the highest in six months since then. In Spain, Prime Minister Mariano Rajoy lost his majority last month after years of belt-tightening and the country still doesn’t have a new government.

Ireland is another European electorate jaded by budget cuts. Polls indicate that Prime Minister Enda Kenny’s ruling coalition will struggle to win a majority, though there’s no clear alternative. The country, European Central Bank President Mario Draghi’s model for economic recovery, saw its 10-year bond yields sink below 1% this month. But banks and brokers are already sounding warnings. “The ballot is the most important potential flash-point of the year,” said Dermot O’Leary, economist at Goodbody Stockbrokers in Dublin. “Investors got caught out by the inconclusive result in Spain, and so there is more focus now on Ireland.”

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EU.

There’s a Giant Elephant at the Bank of England (BBG)

It’s a new year and Bank of England officials have been sharing their views on the outlook for the U.K. and the risks. Well, some of the risks. So far in January, policy makers have spouted more than 20,000 words in three speeches and the minutes of their monthly meeting. They’ve cited a global slowdown, weak wage growth and a slump in oil as key issues for 2016. However, their official communications offer no guidance on what economists say is the top risk facing the U.K.: the forthcoming referendum on its membership in the European Union. Lawmakers could try to change that Tuesday – Governor Mark Carney appears in Parliament to talk about financial-stability risks, and they may well ask him about the elephant in the room.

“It’s such a hot issue, I’d be surprised if it didn’t come up,” said Chris Hare at Investec in London. “Carney would probably try to continue to tread a fine line on potential implications of “Brexit.” You might think they’d want to put some kind of downside skew in to their forecast, but if they really pile into those debates, they’d be criticized. They’ll probably try and stay coy.” It’s certainly on the mind of U.K. economists. They cited the buildup to the vote on EU membership and the potential for Britain to exit as the biggest risks in 2016, according to a Bloomberg News survey. Prime Minister David Cameron has yet to call a date, but it could happen as soon as June.

The absence of “Brexit” analysis from the BOE is getting conspicuous. Last October, Carney skirted the tense political battle with a speech that addressed the U.K.’s relationship with Europe, but offered no final conclusion on its merits. His remarks were accompanied by a 100-page report that assessed the issue but offered no judgment on the impact on the U.K. economy of a British exit. Carney went a step further last week, insisting that not only has he said nothing on “Brexit,” he’s not planning to, either. He told the Wall Street Journal: “We have said all we are going to say about that. We deal with the facts on the ground and the facts on the ground are the status quo. Our job is to make the status quo work as effectively as possible.”

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Recommended read.

The End Of Economic Growth (Robert Gordon)

The idea that a single 100-year period, the “special century,” was more important to economic progress than any other so far, goes against the theory of economic growth as it has evolved over the last 60 years. Growth theory features an economy operating in a “steady state” in which a continuing inflow of new ideas and technologies creates opportunities for investment. But this model does not apply to most of human history. According to Angus Maddison, the great historian of economic growth, the annual rate of growth in the western world from AD 1 to AD 1820 was a mere 0.06% per year, or 6%%ury.

Or, as summed up by the economic commentator Steven Landsburg: “Modern humans first emerged about 100,000 years ago. For the next 99,800 years or so, nothing happened. Well, not quite nothing. There were wars, political intrigue, the invention of agriculture—but none of that stuff had much effect on the quality of people’s lives. Almost everyone lived on the modern equivalent of $400 to $600 a year, just above the subsistence level… Then—just a couple of hundred years ago—people started getting richer. And richer and richer still.” The designation of a “special century” applies only to the US, which has carved out the technological frontier for developed nations since the Civil War. However, other countries have also made stupendous progress.

Western Europe and Japan largely caught up to the US in the second half of the 20th century, and China and other emerging nations are well on their way. Progress did not suddenly begin in 1870, but the US Civil War (1861-65) provides a sharp historical marker. The first Census of Manufacturing was carried out in 1869; coincidentally, that year brought the nation together in a real sense, when the transcontinental railroad was joined at Promontory Summit in Utah.

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Lapavitsas is one of the guys who left Syrixa, for the left.

One Year On, Syriza Has Sold Its Soul For Power (Lapavitsas)

Today marks a year since a radical left government was elected in Greece; its dynamic young prime minster, Alexis Tsipras, promising a decisive blow against austerity. Yanis Varoufakis, his unconventional finance minister, arrived in London soon after and caused a media sensation. Here was a government that disregarded stuffy bourgeois conventions and was spoiling for a fight. Expectations were high. A year on, the Syriza party is faithfully implementing the austerity policies that it once decried. It has been purged of its left wing and Tsipras has jettisoned his radicalism to stay in power at all costs. Greece is despondent. Why did it end like this? An urban myth propagated in some media circles suggests that the radicals were stopped by a coup engineered by conservative politicians and EU officials, determined to eliminate any risk of contagion.

Syriza was overcome by the monsters of neoliberalism and privilege. Still, it fought the good fight, perhaps even sowed the seeds of rebellion. The reality is very different. A year ago the Syriza leadership was convinced that if it rejected a new bailout, European lenders would buckle in the face of generalised financial and political unrest. The risks to the eurozone were, they presumed, greater than the risks to Greece. If Syriza negotiated hard, it would be offered an “honourable compromise” relaxing austerity and lightening the national debt. The mastermind of this strategy was Varoufakis, but it was avidly adopted by Tsipras and most of Syriza’s leadership.

Well-meaning critics repeatedly pointed out that the euro had a rigid set of institutions with their own internal logic that would simply reject demands to abandon austerity and write off debt. Moreover, the European Central Bank stood ready to restrict the provision of liquidity to the Greek banks, throttling the economy – and the Syriza government with it. Greece could not negotiate effectively without an alternative plan, including the possibility of exiting the monetary union, since creating its own liquidity was the only way to avoid the headlock of the ECB. That would be far from easy, of course, but at least it would have offered the option of standing up to the catastrophic bailout strategies of the lenders. Unfortunately, the Syriza leadership would have none of it.

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Dijsselbloem and Schäuble making sure Greece will never recover as long as it’s in the EU.

Greece On The Brink Of ‘Education Tragedy’ (EurActiv)

The economic crisis has dramatically impacted the already struggling Greek education system, according to a trade union report published last week (19 January). EurActiv Greece reports. The report by the General Confederation of Labour in the area of Education and Lifelong learning ( KANEP-GSEE), examined the state of the Greek primary and secondary education system in the 2002-2014 period. “We are on the brink of an unprecedented education tragedy in recent decades,” the authors of the report warn, underlining that the issue is mainly “political”. “The image of the Greek primary and secondary education, compared to the European mainstream, causes deep concerns for the future of younger generations and for the future of Greece itself.”

The alarming report warned that Athens was a champion in underfunding and inequalities in its education system, as well as a laggard in innovation and learning results at the EU level. The report stressed that actual expenses did not reflect the amount of money earmarked in the annual budget of Greece. Eurostat, the EU’s statistics office, said that public expenditure on education accounted for 4.5% of GDP in 2013. However, it was just 3.2% of GDP, according to official statistics by the State General Accounting Office. “A 1.3% difference is excessively high […] and it cannot be accepted,” the report reads. The underfunding, in combination with the “ineffective study programmes”, resulted in low educational performance. Greek students are amongst the worst performers in basic subjects (mathematics, language, natural sciences).

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And production is soaring.

We Produced Enough Plastics Since WWII To Cover The Entire Earth (Guardian)

Humans have made enough plastic since the second world war to coat the Earth entirely in clingfilm, an international study has revealed. This ability to plaster the planet in plastic is alarming, say scientists – for it confirms that human activities are now having a pernicious impact on our world. The research, published in the journal Anthropocene, shows that no part of the planet is free of the scourge of plastic waste. Everywhere is polluted with the remains of water containers, supermarket bags, polystyrene lumps, compact discs, cigarette filter tips, nylons and other plastics. Some are in the form of microscopic grains, others in lumps. The impact is often highly damaging. “The results came as a real surprise,” said the study’s lead author, Professor Jan Zalasiewicz, of Leicester University.

“We were aware that humans have been making increasing amounts of different kinds of plastic – from Bakelite to polyethylene bags to PVC – over the last 70 years, but we had no idea how far it had travelled round the planet. It turns out not just to have floated across the oceans, but has sunk to the deepest parts of the sea floor. This is not a sign that our planet is in a healthy condition either.” The crucial point about the study’s findings is that the appearance of plastic should now be considered as a marker for a new epoch. Zalasiewicz is the chairman of a group of geologists assessing whether or not humanity’s activities have tipped the planet into a new geological epoch, called the Anthropocene, which ended the Holocene that began around 12,000 years ago.

Most members of Zalasiewicz’s committee believe the Anthropocene has begun and this month published a paper in Science in which they argued that several postwar human activities show our species is altering geology. In particular, radioactive isotopes released by atom bombs left a powerful signal in the ground that will tell future civilisations that something strange was going on. In addition, increasing carbon dioxide in the oceans, the massive manufacture of concrete and the widespread use of aluminium were also highlighted as factors that indicate the birth of the Anthropocene. Lesser environmental impacts, including the rising use of plastics, were also mentioned in passing.

But Zalasiewicz argues that the humble plastic bag and plastic drink container play a far greater role in changing the planet than has been realised. “Just consider the fish in the sea,” he said. “A vast proportion of them now have plastic in them. They think it is food and eat it, just as seabirds feed plastic to their chicks. Then some of it is released as excrement and ends up sinking on to the seabed. The planet is slowly being covered in plastic.”

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“An Indigenous child is more likely to be locked up in prison than they are to finish high school.”

Racism ‘Is At The Heart Of The Australian Dream’ (Guardian)

The veteran journalist and Wiradjuri man, Stan Grant, has told a Sydney audience that racism is “at the heart of the Australian dream,” as he delivered a sobering speech about the impact of colonisation and discrimination on Indigenous people and their ancestors. It has provoked a powerful reaction from Australians, going viral on Facebook with 850,000 views and 28,000 shares, and had been watched more than 50,000 times on YouTube by Sunday night. As part of the IQ2 debate series held by the Ethics Centre, Grant joined immigration lawyer Pallavi Sinha, Herald Sun columnist Rita Panahi and Australian actor Jack Thompson to argue for or against the topic “Racism is destroying the Australian dream”. The event was held last year, but the Ethics Centre only released the video online on Friday.

In his opening address, Grant, who is also Guardian Australia’s Indigenous affairs editor, argued that racism was at “the foundation of the Australian dream”. “The Australian dream,” Grant said. “We sing of it and we recite it in verse; ‘Australians all let us rejoice for we are young and free’. “My people die young in this country. We die 10 years younger than the average Australian, and we are far from free. We are fewer than 3% of the Australian population and yet we are 25% – one quarter – of those Australians locked up in our prisons. And if you’re a juvenile it is worse, it is 50%. An Indigenous child is more likely to be locked up in prison than they are to finish high school.”

He spoke of his Indigenous ancestors, including his grandmother and great-grandmother, who were among those institutionalised in missions, where Indigenous people were forced into unpaid labour and abused. He referenced the “war of extermination” against his ancestors. “I love a sunburned country, a land of sweeping plains, of rugged mountain ranges,” Grant said, referencing the famous poem, My Country, by the Australian writer Dorothea Mackellar. “It reminds me that my people were killed on those plains. We were shot on those plains, diseases ravaged us on those plains.

“Our rights were extinguished because we were not here according to British law, and when British people looked at us, they saw something subhuman. We were fly-blown, Stone-Age savages, and that was the language that was used. Captain Arthur Phillip, a man of enlightenment … was sending out raiding parties with the instruction; ‘bring back the severed heads of the black trouble-makers’.

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What does this make me think of? Just because they don’t call them camps….

Merkel’s Party, Sliding In Polls, Weighs German ‘Border Centres’ (Reuters)

A senior figure in Chancellor Angela Merkel’s conservative party has proposed setting up “border centres” along the frontier with Austria to speed up the repatriation of those asylum seekers deemed unqualified to stay. Julia Kloeckner, leader of Merkel’s Christian Democrats in the western state of Rhineland-Palatinate, was careful to style her proposal as a “Plan A2” rather than a “Plan B”, adding that the chancellor’s push for a European solution to a large influx of asylum seekers into the continent was still right. “We want to complement it,” she wrote in a paper setting out her position, a copy of which Reuters obtained. In the paper, Kloeckner proposed that: “On the German-Austrian border, border centres will be set up.”

The proposal, endorsed by the Christian Democrats’ (CDU) secretary general, highlights the frustration in Merkel’s party with the slow progress in achieving a European Union-wide solution to the refugee crisis, which is straining the infrastructure of many German municipalities. Germany attracted 1.1 million asylum seekers last year, leading to calls from across the political spectrum for a change in its handling of the number of refugees coming to Europe to escape war and poverty in Syria, Afghanistan and elsewhere. Growing concern about Germany’s ability to cope with the influx and worries about crime and security after assaults on women at New Year in Cologne are weighing on support for the CDU and its Bavarian sister party, the Christian Social Union (CSU). An Emnid poll for the newspaper Bild am Sonntag showed support for the CDU/CSU bloc down 2%age points at 36% from the previous week. The right-wing Alternative for Germany (AfD) gained 1 point to 10%. Merkel’s coalition partners, the Social Democrats (SPD), gained a point to 25%.

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Should you really want an award that you share with Obama and Kissinger?

Greek Islanders To Be Nominated For Nobel Peace Prize (Observer)

Greek islanders who have been on the frontline of the refugee crisis are to be nominated for the Nobel peace prize with the support of their national government. Of the 900,000 refugees who entered Europe last year most were received –scared, soaked and travelling in rickety boats – by those who live on the Greek islands in the Aegean Sea. The islanders, including fishermen who gave up their work to rescue people from the sea, are in line to be honoured with one of the world’s most esteemed awards. Eminent academics from the universities of Oxford, Princeton, Harvard, Cornell and Copenhagen are drafting a submission in favour of awarding the prize to the people of Lesbos, Kos, Chíos, Samos, Rhodes and Leros.

The nomination deadline is 1 February, but those behind the plan have already met the Greek minister for migration, Yiannis Mouzalas, who they say has offered his government’s full support. A petition on the website of the grassroots campaign group, Avaaz, in favour of the nomination has amassed 280,000 signatures. According to the petition: “On remote Greek islands, grandmothers have sung terrified little babies to sleep, while teachers, pensioners and students have spent months offering food, shelter, clothing and comfort to refugees who have risked their lives to flee war and terror.”

While the official nomination letter is yet to be finalised, it is understood the academics, whose identities will be revealed in the coming days, will implore the Nobel committee members to accept their nomination. They will say that it must be noted that a people of a country already dealing with its own economic crisis responded to the unfolding tragedy of the refugee crisis with “empathy and self-sacrifice”, opening their homes to the dispossessed, risking their lives to save others and taking care of the sick and injured. [..] One of the organisers of the Solidarity Networks, Matina Katsiveli, 61, a retired judge who lives on Leros, welcomed the move but said there was “reward enough in the smiles of the people we help”.

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That was not clear?

Sealing Greek Sea Border Is Impossible (AP)

Hour after hour, by night and by day, Greek coast guard patrols and lifeboats, reinforced by vessels from the European Union’s border agency Frontex, ply the waters of the eastern Aegean Sea along the frontier with Turkey. They are on the lookout for people being smuggled onto the shores of Greek islands – the front line of Europe’s massive refugee crisis. Although smugglers are often arrested, the task is mainly a search-and-rescue role. Hours spent on patrol shows the near-impossibility of sealing Europe’s sea borders as some have demanded of Greece, whose islands so near to Turkey are the most popular gateway into Europe. Some European countries – notably Hungary and Slovakia – have blasted Greece for being unable to secure its border, which also forms part of the external limits of Europe’s borderless Schengen area.

“We have been saying all along that if the Greeks are unable to protect the borders of their country, we should jointly go down south and protect them,” Hungarian Prime Minister Viktor Orban said in November, with his Slovak counterpart Robert Fico echoing the thought. But such calls ignore the realities at sea. No matter how many patrol boats are out in Greek waters, attempting to force a vessel of asylum-seekers back into Turkish waters is both illegal and dangerous, even in calm seas. So unless a Turkish patrol stops a migrant boat and returns it to Turkey, there is little Greek or Frontex patrols can do once it has entered Greek territorial waters but arrest the smugglers and pick up the passengers or escort the vessel safely to land.

“Greece is guarding the national and European borders,” Greek Alternate Foreign Minister Nikos Xydakis said in a statement Sunday. “What it cannot do and will not do … is to sink boats and drown women and children, because international and European treaties and the values of our culture forbid it.”

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