Feb 272019
 February 27, 2019  Posted by at 10:36 am Finance Tagged with: , , , , , , , , , , , , ,  

Salvador Dali Remorse – Sphinx Embedded in the Sand 1931


Michael Cohen Testimony: Trump A ‘Racist’, ‘Cheat’ And ‘Conman’ (G.)
3 Days That Will Decide Brexit – March 12-14th Will Seal Britain’s Fate (Exp.)
UK Economy Could Be 9% Weaker Under No-Deal Brexit – Government (G.)
The UK Doesn’t Have The Right Pallets For Exporting To The EU (BI)
The War on Venezuela is Built on Lies (Pilger)
Survival of the Richest (Nomi Prins)
Hey Yellen, It Was Trump Who Was Right (Every)
Now that Housing Bubble #2 Is Bursting…How Low Will It Go? (CHS)
Russia’s Share Of European Gas Market Surges To Almost 37%, Dwarfing LNG (RT)
UK Hunger Survey To Measure Food Insecurity (G.)
Glyphosate Found In 95% Of Wine And Beer (Ind.)
Am I The Only One Who’s Terrified About The Warm Weather? (G.)



Lots of wet panties, male and female, today in anticipation of Michael Cohen’s testimony. Of course, it’s been leaked, full text is here. A few quotes:

I may once again be in a party of one, but I think it’s awfully weak, it’s grasping for stuff rather than conveying it. First, there’s the inevitable Assange link:

In July 2016 [..] Mr. Stone told Mr. Trump that he had just gotten off the phone with Julian Assange and that Mr. Assange told Mr. Stone that, within a couple of days, there would be a massive dump of emails that would damage Hillary Clinton’s campaign. Mr. Trump responded by stating to the effect of “wouldn’t that be great.”

Anything related to Assange, whether from Mueller or Cohen, lacks credibility as long as he can’t defend himself against it. And Trump merely says: wouldn’t that be great? Not exactly the stuff of collusion or conspiracy.

Just as inevitable in smear campaigns: Trump the racist.

Mr. Trump is a racist. The country has seen Mr. Trump court white supremacists and bigots. You have heard him call poorer countries “shitholes.” While we were once driving through a struggling neighborhood in Chicago, he commented that only black people could live that way. And, he told me that black people would never vote for him because they were too stupid.

Calling a country a shithole is not racist. The policies that have created a situation in which many shithole countries are populated by black people stem from many decades of US/Europe policies that predate Trump. The rest is not racist either, if you look closer. Perhaps Trump is a bit racist, like so many Americans. But Cohen’s prepared words don’t show that.

Also: Trump doesn’t tell the full truth about his wealth. But Michael Cohen always has…

It was my experience that Mr. Trump inflated his total assets when it served his purposes, such as trying to be listed among the wealthiest people in Forbes, and deflated his assets to reduce his real estate taxes.

Gee, lock him up. I don’t get it. There’s so much wrong with Trump, but politics and media have singled out Russia collusion, and then failed to prove a thing about it, and now they switch to ‘racist conman’, with the weakest of accusations. I swear, they might as well all be working for the Donald.

Michael Cohen Testimony: Trump A ‘Racist’, ‘Cheat’ And ‘Conman’ (G.)

Michael Cohen is to accuse Donald Trump of being a “conman” and a “cheat” who had advanced knowledge that a longtime adviser was communicating with WikiLeaks during the 2016 campaign, according to opening testimony he will deliver to Congress on Wednesday. Cohen’s prepared remarks, confirmed by the Guardian, include a series of explosive allegations about the presidential campaign. The president’s former lawyer, who will publicly testify before the House oversight committee on Wednesday, will state that Trump was told by Roger Stone that WikiLeaks would publish emails stolen from the Democratic National Committee and Hillary Clinton’s campaign.

“In July 2016, days before the Democratic convention, I was in Mr Trump’s office when his secretary announced that Roger Stone was on the phone. Mr Trump put Mr Stone on the speakerphone,” Cohen’s opening statement reads. “Mr Stone told Mr Trump that he had just gotten off the phone with Julian Assange and that Mr Assange told Mr Stone that, within a couple of days, there would be a massive dump of emails that would damage Hillary Clinton’s campaign. Mr Trump responded by stating to the effect of ‘wouldn’t that be great.’” The remarkable allegations by Cohen go further than what has been made public thus far by the special counsel investigation into potential collusion between the Trump campaign in Moscow.

Cohen will also suggest his instructions to lie to Congress about a possible Trump Tower deal in Moscow during the 2016 campaign came from the president – albeit not directly. “In conversations we had during the campaign, at the same time I was actively negotiating in Russia for him, he would look me in the eye and tell me there’s no business in Russia and then go out and lie to the American people by saying the same thing,” Cohen will say. “In his way, he was telling me to lie.” “Mr Trump did not directly tell me to lie to Congress. That’s not how he operates,” he will add.

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Humor me and please read this. It’s so confusing that you almost forget it’s also complete madness.

3 Days That Will Decide Brexit – March 12-14th Will Seal Britain’s Fate (Exp.)

In a dramatic statement to the House of Commons, Mrs May confirmed that she will put her Withdrawal Agreement – including whatever additional assurances she has secured from Brussels – to a “meaningful vote” by March 12. If that fails, MPs will be offered two separate votes the following day – one on a no-deal Brexit, and the other on requesting an extension to the two-year Article 50 negotiation process to delay EU withdrawal beyond March 29. The sequence of votes will be proposed in an amendable motion tabled by the Prime Minister for debate and vote in the Commons on Wednesday. To uproar in the Commons, Mrs May told MPs: “They are commitments I am making as Prime Minister and I will stick by them, as I have previous commitments to make statements and table amendable motions by specific dates.”

Deputy Political Editor for Sky News Beth Rigby tweeted of Mrs May’s speech: “This really is a big shift. “May has finally played her cards and sided with the Europhile wing of her party .. “Vote for her deal (March 12) Vote for no-deal (March 13) Vote for delay (March 14) .. “Only yesterday she refused to even acknowledge there might have to be a delay to Brexit.”

Mrs May has declared a meaningful vote will take place by March 12, where MPs will vote on her Brexit deal. Should this deal not be voted through, on March 13, MPs will then be offered two separate votes by March 13 on whether the UK leaves with no deal or delays Brexit beyond March 29. The delay will then be voted on March 14, when a motion would be brought forward on whether Parliament wishes to seek a short limited extension to Article 50. If the House votes for an extension, this extension will have to be approved by the House with the EU and then necessary legislation will be brought forward to change the exit date.

[..] In her statement to MPs following a Cabinet meeting with senior colleagues at 10 Downing Street, Theresa May said she wanted to set out “three further commitments” to the Commons. She said: “First, we will hold a second meaningful vote by Tuesday, March 12 at the latest. “Second, if the Government has not won a meaningful vote by Tuesday, March 12, then it will – in addition to its obligations to table a neutral amendable motion under Section 13 of the EU Withdrawal Act – table a motion to be voted on by Wednesday March 13 at the latest, asking this House if it supports leaving the EU without a Withdrawal Agreement and a framework for a future relationship on March 29.

“So the United Kingdom will only leave without a deal on March 29 if there is explicit consent in the House for that outcome. “Third, if the House, having rejected the deal negotiated with the EU, then rejects leaving on March 29 without a Withdrawal Agreement and future framework, the Government will on March 14 bring forward a motion on whether Parliament wants to seek a short, limited extension to Article 50.” The Prime Minister also said she still believes she will be able to secure a deal: “I’ve had a real sense from the meetings I’ve had, and the conversations I’ve had in recent days, that we can achieve that deal. “It’s within our grasp to leave with a deal on March 29 and that’s where all of my energies are going to be focused.”

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Scared yet? Because that’s the idea.

UK Economy Could Be 9% Weaker Under No-Deal Brexit – Government (G.)

The government has issued a bleak warning over a no-deal Brexit, estimating the UK economy could be 9% weaker in the long run, businesses in Northern Ireland might go bust and food prices will increase. In an official document only published after repeated demands by the former Conservative MP Anna Soubry, the government also revealed it was behind on contingency planning for a third of “critical projects” in relation to business and trade. The latest no-deal notice states:

• The economy would be 6%-9% smaller over the next 15 years than it otherwise might have been, in the event of no deal, in line with Bank of England forecasts. • The flow of goods through Dover would be “very significantly reduced for months”. • With 30% of food coming from the EU, prices are likely to increase and there is a risk that panic buying might create shortages. • Only six of the 40 planned international trade agreements have been signed.

The document was published just hours after Theresa May was forced to promise two key votes, allowing MPs the option to reject no deal and to potentially delay Brexit for a short period, following pressure from remain-minded cabinet ministers. The prime minister set out a timetable that includes a vote on her Brexit deal by 12 March; if that fails, a vote the following day to support no deal, and if that also fails, a vote on 14 March on extending article 50. The delay is likely to further agitate the Tory party’s Eurosceptics, with Brexiter ministers including Andrea Leadsom and Liz Truss expressing their frustration over the issue in cabinet on Tuesday morning. Speaking in the House of Commons on Tuesday, May did not specify the length of any delay, saying only that she would prefer it to be the shortest possible. An extension beyond the end of June would involve the UK taking part in the European parliament elections.

[..] The no-deal notice said customs checks alone could cost businesses £13bn a year and that it was impossible to predict the impact of new tariffs. It said this was partly because the government’s communications to businesses and individuals about the need to prepare for no deal had not been effective. [..] The EU, which would treat the UK as a third country in the event of no deal, could impose tariffs of 70% on beef exports, 45% on lamb and 10% on cars, it said. “This would be compounded by the challenges of even modest reductions in flow at the border.”

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Absolutely fabulous.

The UK Doesn’t Have The Right Pallets For Exporting To The EU (BI)

The UK government is due to hold emergency talks with industry leaders on Tuesday after discovering that the country doesn’t have the right pallets to continue exporting goods to the European Union if it leaves without a deal next month. Under strict EU rules, pallets – wooden or plastic structures that companies use to transport large volumes of goods – arriving from non-member states must be heat-treated or cleaned to prevent contamination and have specific markings to confirm that they meet standards. Most pallets that British exporters are using do not conform to the rules for non-EU countries, or “third countries,” as EU member states follow a much more relaxed set of regulations.

The Department for Environment, Food, and Rural Affairs last week told business leaders that the UK would not have enough EU-approved pallets for exporting to the continent if it leaves without a withdrawal agreement next month. That means UK companies would be competing for a small number of pallets that meet EU rules, and those that miss out would be forced to wait for new pallets, which could take weeks to be ready. DEFRA has arranged for a conference call on Tuesday morning to discuss the pallet shortage, with 31 days until Brexit day on March 29. “It is the tiny, procedural, mundane-seeming stuff that will absolutely trip people up,” one industry figure briefed by Theresa May’s government told Business Insider, adding that the country was “not even remotely ready” for a no-deal Brexit.

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Chavez is the guy US intelligence have been chasing for so long, and still trying to get at after his death.

Got to love the man quoting world literature. Also because in the next article, Nomi Prins does the same.

The War on Venezuela is Built on Lies (Pilger)

Travelling with Hugo Chavez, I soon understood the threat of Venezuela. At a farming co-operative in Lara state, people waited patiently and with good humor in the heat. Jugs of water and melon juice were passed around. A guitar was played; a woman, Katarina, stood and sang with a husky contralto. “What did her words say?” I asked. “That we are proud,” was the reply. The applause for her merged with the arrival of Chavez. Under one arm he carried a satchel bursting with books. He wore his big red shirt and greeted people by name, stopping to listen. What struck me was his capacity to listen. But now he read. For almost two hours he read into the microphone from the stack of books beside him: Orwell, Dickens, Tolstoy, Zola, Hemingway, Chomsky, Neruda: a page here, a line or two there. People clapped and whistled as he moved from author to author.

Then farmers took the microphone and told him what they knew, and what they needed; one ancient face, carved it seemed from a nearby banyan, made a long, critical speech on the subject of irrigation; Chavez took notes. Wine is grown here, a dark Syrah type grape. “John, John, come up here,” said El Presidente, having watched me fall asleep in the heat and the depths of Oliver Twist. “He likes red wine,” Chavez told the cheering, whistling audience, and presented me with a bottle of “vino de la gente.” My few words in bad Spanish brought whistles and laughter. Watching Chavez with the people, la gente, made sense of a man who promised, on coming to power, that his every move would be subject to the will of the people. In eight years, Chavez won eight elections and referendums: a world record. He was electorally the most popular head of state in the Western Hemisphere, probably in the world.

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See? Like Pilger and Chavez, Nomi talks about literature. No space here to do this justice, please go read it. Key point: unlike the poor(er), the rich don’t live off the rewards of labor, but of that of wealth.

Survival of the Richest (Nomi Prins)

In George Orwell’s iconic 1945 novel, Animal Farm, the pigs who gain control in a rebellion against a human farmer eventually impose a dictatorship on the other animals on the basis of a single commandment: “All animals are equal, but some animals are more equal than others.” In terms of the American republic, the modern equivalent would be: “All citizens are equal, but the wealthy are so much more equal than anyone else (and plan to remain that way).” Certainly, inequality is the economic great wall between those with power and those without it. As the animals of Orwell’s farm grew ever less equal, so in the present moment in a country that still claims equal opportunity for its citizens, one in which three Americans now have as much wealth as the bottom half of society (160 million people), you could certainly say that we live in an increasingly Orwellian society.

Or perhaps an increasingly Twainian one. After all, Mark Twain and Charles Dudley Warner wrote a classic 1873 novel that put an unforgettable label on their moment and could do the same for ours. The Gilded Age: A Tale of Today depicted the greed and political corruption of post-Civil War America. Its title caught the spirit of what proved to be a long moment when the uber-rich came to dominate Washington and the rest of America. It was a period saturated with robber barons, professional grifters, and incomprehensibly wealthy banking magnates. (Anything sound familiar?) The main difference between that last century’s gilded moment and this one was that those robber barons built tangible things like railroads.

Today’s equivalent crew of the mega-wealthy build remarkably intangible things like tech and electronic platforms, while a grifter of a president opts for the only new infrastructure in sight, a great wall to nowhere. In Twain’s epoch, the U.S. was emerging from the Civil War. Opportunists were rising from the ashes of the nation’s battered soul. Land speculation, government lobbying, and shady deals soon converged to create an unequal society of the first order (at least until now). Soon after their novel came out, a series of recessions ravaged the country, followed by a 1907 financial panic in New York City caused by a speculator-led copper-market scam.

To fully grasp the nature of inequality in our twenty-first-century gilded age, it’s important to understand the difference between wealth and income and what kinds of inequality stem from each. Simply put, income is how much money you make in terms of paid work or any return on investments or assets (or other things you own that have the potential to change in value). Wealth is simply the gross accumulation of those very assets and any return or appreciation on them. The more wealth you have, the easier it is to have a higher annual income.

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Tyler got his hands on a piece by Michael Every at Dutch Rabobank.

Hey Yellen, It Was Trump Who Was Right (Every)

Rabo are already predicting a US recession in 2020, which will drag many down with it, and as the OECD now warns that swollen corporate debt piles, which central banks have so encouraged, is of ever lower quality and potentially more dangerous than it was back in 2008. 54% of investment grade bonds are now BBB-rated, up from 30% in 2008. The OECD argues “In the case of a downturn, highly leveraged companies would face difficulties in servicing their debt, which in turn, through higher default rates, may amplify the effects…Any developments in these areas will come at a time when non-financial companies in the next three years will have to pay back or refinance about USD4 trillion worth of corporate bonds. This is close to the total balance sheet of the US Federal Reserve.”

Guess what guys? China is right ahead of you on that curve – which is why it is trying to find another whale to nuke ASAP: things are looking truly ugly given many firms can’t even pay the interest on their debt, let alone the principle. And guess what else? That OECD and China warning sounds like an admission of the Minsky debt dynamic that you might have thought all central banks would have to have learned the lessons of post-GFC. Apparently not, however – because they think they already know everything. As former Fed Chair Yellen mocked yesterday, Trump doesn’t understand what the Fed’s dual mandates of price stability and stable employment are. That might well be true.

But was it the Fed or Trump who publicly called out how dangerous continuous Fed rate hikes are in a debt-laden, Minsky-teetering financial system where the yield curve is still inverted 9bps on 1s-5s even after a pause? I think Yellen will find it was Trump who was right and the Fed who was forced into a humiliating and frankly incongruous policy U-turn. So much expertise! Trump also made a similar intervention over oil prices overnight, and once again they dipped, though are opening up strongly this morning in Asia. [..] easy policy in the UK; ultra-easy policy in China; promises of more easing in Japan; an ECB U-turn to come(?); and the Fed on hold and stopping QT soon at least. And that’s with bullish markets and reasonable global growth – just wait until things head south: if all you have is a nuke, everything looks like a whale.

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Every bubble that bursts ends up below its starting level. Nicole had these graphs, Tulip, South Sea etc., that showed just that. This graph doesn’t quite do that.

Now that Housing Bubble #2 Is Bursting…How Low Will It Go? (CHS)

There are two generalities that can be applied to all asset bubbles: 1. Bubbles inflate for longer and reach higher levels than most pre-bubble analysts expected 2. All bubbles burst, despite mantra-like claims that “this time it’s different” The bubble burst tends to follow a symmetrical reversal of very similar time durations and magnitudes as the initial rise. If the bubble took four years to inflate and rose by X, the retrace tends to take about the same length of time and tends to retrace much or all of X. If we look at the chart of the Case-Shiller Housing Index below, this symmetry is visible in Housing Bubble #1 which skyrocketed from 2003-2007 and burst from 2008-2012.

Housing Bubble #1 wasn’t allowed to fully retrace the bubble, as the Federal Reserve lowered interest rates to near-zero in 2009 and bought $1+ trillion in sketchy mortgage-backed securities (MBS), essentially turning America’s mortgage market into a branch of the central bank and federal agency guarantors of mortgages (Fannie and Freddie, VA, FHA). These unprecedented measures stopped the bubble decline by instantly making millions of people who previously could not qualify for a privately originated mortgage qualified buyers. This vast expansion of the pool of buyers (expanded by a flood of buyers from China and other hot-money locales) drove sales and prices higher for six years (2012-2018).

As noted on the chart below, this suggests the bubble burst will likely run from 2019-2025, give or take a few quarters. The question is: what’s the likely magnitude of the decline? Scenario 1 (blue line) is a symmetrical repeat of Housing Bubble #2: a retrace of the majority of the bubble’s rise but not 100%, which reverses off this somewhat higher base to start Housing Bubble #3. Since the mainstream consensus denies the possibility that Housing Bubble #2 even exists (perish the thought that real estate prices could ever–gasp–drop), they most certainly deny the possibility that prices could retrace much of the gains since 2012.

More realistic analysts would probably agree that if the current slowdown (never say recession, it might cost you your job) gathers momentum, some decline in housing prices is possible. They would likely agree with Scenario 1 that any such decline would be modest and would simply set the stage for an even grander housing bubble #3. But there is a good case for Scenario 2, in which price plummets below the 2012 lows and keeps on going, ultimately retracing the entire housing bubble gains from 2003.

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Interesting how Europe smears Putin wherever it can, except where it counts.

Russia’s Share Of European Gas Market Surges To Almost 37%, Dwarfing LNG (RT)

Russia’s state-run energy major Gazprom said its share of sales of natural gas in the European Union has increased to 36.7 percent last year, rising over two percent against 34.2 percent in 2017. “In 2018, according to preliminary data, the share of gas supplies to the EU countries and Turkey has reached an all-time high and totaled 36.7 percent,” the director general of Gazprom Export Elena Burmistrova said at Gazprom’s Investor Day event, taking place in Singapore. Burmistrova added that Gazprom’s gas exports to Europe last year amounted to record 201.8 billion cubic meters, and is expected to significantly grow by 2035 due to the increasing demand.

According to a member of Gazprom’s management committee, Oleg Aksyutin, the company saw no threat to Gazprom’s business in the European market from global producers of liquefied natural gas (LNG), including the US. The company’s gas exports to Europe are reportedly three times more than the amount of LNG shipped to Europe by all global producers combined. Though the share of LNG shipments have been growing, it still makes up only 13 percent of the entire gas market, according to Burmistrova. The executive added that prices for natural gas saw a significant surge. “In 2018, in accordance with linked fuel prices, the average price of Gazprom gas increased by 24.6 percent to $245.5 for 1,000 cubic meters,” she said, stressing that in 2016 it stood at $167.

When it comes to China, one of the world’s biggest energy consumers, Gazprom is planning to become the country’s biggest supplier as soon as 2035, with the company’s share expected to reach 13 percent of Chinese overall consumption by the same year.

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It’s completely insane that any western country would have to do a Hunger Survey. Don’t fall for thinking it’s normal.

UK Hunger Survey To Measure Food Insecurity (G.)

The government is to introduce an official measure of how often low-income families across the UK skip meals or go hungry because they cannot afford to buy enough food, the Guardian can reveal. A national index of food insecurity is to be incorporated into an established UK-wide annual survey run by the Department for Work and Pensions (DWP) that monitors household incomes and living standards. Campaigners, who have been calling for the measure for three years, said the move was “a massive step forward” that would provide authoritative evidence of the extent and causes of hunger in the UK. They say food insecurity is strongly linked to poverty caused by austerity and welfare cuts and is driving widening health inequality.

Food insecurity is generally defined as experiencing hunger, the inability to secure food of sufficient quality and quantity to enable good health and participation in society, and cutting down on food because of a lack of money. The decision, which took campaigners by surprise, was revealed at an informal meeting on Tuesday attended by the DWP, the Office for National Statistics, Public Health England and the Scottish and Welsh governments, as well as a number of food poverty charities. Ministers have for years resisted calls to bring England into line with the US and Canada by measuring food insecurity. Critics said this was to avoid shedding unwanted light on the impact of welfare policy and the public health consequences of being unable to eat regularly or healthily.

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Why the hunger? Here’s why: we feed ourselves with plastics and poison.

Glyphosate Found In 95% Of Wine And Beer (Ind.)

A new study has shown that traces of a commonly-used and possibly cancerous weed killer can be found in the majority of wine and beer. Researches tested five wines and 15 beers from the US, Asia and Europe for traces of pesticide glyphosate. The research found that of the 20 samples, 19 (95 per cent) contained particles of the chemical, including products labelled as organic. The US Public Interest Research Group, which conducted the study, said the levels of the pesticide aren’t necessarily dangerous, but are still concerning. In 2015, the World Health Organisation’s International Agency categorised glyphosate as “probably carcinogenic to humans”, leading the state of California to add it to its list of chemicals that can cause cancer, which makes companies responsible for providing warnings to potential consumers.

The findings of the study coincide with the beginning of a class action lawsuit against Bayer, which acquired Monsanto last year. The suit claims that Roundup caused thousands of plaintiffs to develop non-Hodgkins lymphoma, a type of blood cancer. The first plaintiff, Ed Hardeman, testified this week, alleging that his use of the chemical on his 56 acres of land caused him to develop cancer aged 66. [..] Bayer has not commented on the results of the study, but the researchers are calling for glyphosate to be banned unless it can be proven safe.

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The earth’s weather system is far too complex to draw conclusions from a sunny day. The only things we can say about the climate must be based on long-term stats. This kind of article doesn’t help one bit, it merely points out the author literally doesn’t know what he’s talking about.

Am I The Only One Who’s Terrified About The Warm Weather? (G.)

They were everywhere in London on the weekend. The people in short sleeves or sandals. The ones with sunglasses ostentatiously hanging from the front of their shirts or balanced on top of their heads. The beer gardens and riverside pubs of the capital were heaving; corner shops ran out of ice-cream. Outside it was 17C (62F). Monday was another warm day, without a cloud in the sky, and in the late afternoon the light took on a magical, honey-coloured hue. It brought to mind one of those summer evenings you remember from childhood, when you’d be in the park all day and your parents let you stay out until bedtime, and you felt like you were doing something deliciously naughty just by being there.

Except it isn’t early summer: it’s February. And the entire developed world has not so much been doing something slightly naughty as systematically attacking the global ecosystem over a period of decades, and that’s how we go into this mess. We should try to hold on to this fact as young, posh men the nation over develop a strange delusion that anyone would want to see their elbows; this is not supposed to be happening. Less than a month ago, there was video footage of extreme cold weather coming out of Chicago. Forks supported in midair by suddenly frozen noodles, water poured from kettles instantly freezing on its way to the ground: you know the sort of thing.

OK, that was on the other side of the world, and was extreme and terrifying enough. But at least it was terrifying in the right direction. On Monday, though, the temperature hit 20.3C in Ceredigion, west Wales: the highest February temperature ever recorded in Britain and the first time the thermometer had breached 20C in winter. The BBC weather account tweeted it out with a gif of the sunshine icon and the same excitable breathlessness with which Springwatch would announce it had found a new type of vole. My response contained a single word, repeated seven times. It began with F.

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May 022018

Edvard Munch Separation 1894


Tomorrow, May 3, across England, in local elections more than 4,000 seats are being contested in around 150 councils – including all 32 London boroughs. Mayoral elections are also taking place in Hackney, Lewisham, Newham, Tower Hamlets. GOOD! That is Britain’s chance to tell Theresa May and her racist bigoted tribe to go take a hike. But if that doesn’t happen, beware.

“The Biggest Election Threat Facing Labour Is Complacency”, headlines the Guardian’s Owen Jones, saying the party’s so sure of victory they won’t make enough of an effort. No, Owen, sorry, Labour has two main problems. First, Tony Blair’s lasting influence and following. Second, the refusal to speak out loud and clear on many issues, from Brexit to Windrush.

They should have been much louder, and much earlier, in their condemnation of the indefinite detention and subsequent deportation of British grandmas and grandpas of Caribbean descent. They were not. And that will make voters think, and worry. That and much more. Britain has exposed itself once more as a feudal society, and those things are hard to topple.


Initially I was going to write “Britain Is Going To The Dogs”, but then I realized that wouldn’t be accurate. It’s not going, going, it’s gone. Long gone, far gone, gone deep. It’s outta here. It has scaled the Green Monster. Future generations will have to pick up the pieces of what’s being concocted these days, and they’ll have to do it in bitter poverty and abject deprivation.

But mostly they seem to only be able to get excited over sports, dancing celebrities, new princes and royal weddings to TV stars. As their nation is sinking like a stone, both financially and ethically. That royal family of theirs reminds one more of Marie Antoinette by the day. They all sit idly by, with the rest of the entitled, as the country declares open war on anyone black and/or poor. Even as that TV star is (half?)-black.

In the Windrush tragedy, elderly people of Caribbean descent who’ve lived in Britain their entire lives, are made homeless, denied healthcare, placed in indefinite detention, separated from their British families, only to be deported on secret charter flights to countries they’ve never known.

Meanwhile, 100,000 more children live in poverty today than did this time last year.


Food, Clothes, A Mattress And Three Funerals. What Teachers Buy For Children

“There are 4.1 million children – nearly a third of the entire child population – living in households on less than 60% of the average income.” “..it is not so much that poverty is more severe, but that it has spread. “It’s everybody. Your average family is like that now.” “Heads in poor catchments notice a difference when they attend meetings at other schools. “If you go and see kids in two different areas, they’ll be noticeably different heights..” “..a million and a half more children will sink below the poverty line by 2021 thanks to benefit changes.”

This is open war by a government on its children. This is the third world. This sounds like Marie Antoinette and Charles Dickens are having an affair. Britain is going back in time, first 100 years, then another 100. The elites who feel most entitled to their long lost empire are sitting pretty, comfortably sure that they can make the ‘rest’ also ‘long back’ for that empire. Cue newborn Prince Louis (Marie Antoinette also married one of those, didn’t she?!).

What about the ‘other side’, the political left? Well, does it really exist? Labour remains stuffed with Blairites, i.e. left in name only. Tony Blair is making the rounds again promoting war, this time with Iran. As the British war industry makes billions with their involvement in Saudi Arabia’s nullification of Yemen, and Britain’s own role in Syria et al.

While the present actual Labour leader, Jeremy Corbyn, continues to be smeared with allegations about anti-semitism and receiving support from Russia. In Britain, you can print absolutely anything on newspaper frontpages, and so that’s what they do. Corbyn, for some reason, can’t seem to get a grip on all the slander. He is therefore toothless. Which doesn’t seem to bode well for those elections. Corbyn needs to grow a pair, he has to tell the Tories and their media to F*ck Off; but that won’t happen before tomorrow, if ever.


Yeah, the Skripal story is bizarre. Big bold accusations 8 weeks ago, more expelled diplomats than ever in history, but never a shred of evidence. Only to now find a total media silence. Not a letter has been printed about the allegedly poisoned father and daughter recently.

Russian Foreign Ministry spokeswoman Maria Zakharova said:

“British journalists lapsed into silence in a day as if, let’s speak openly, there had come an order for everyone to keep silent. [..] Nobody is looking for anyone, nobody is carrying out any investigations, nobody is demanding from the British side either photos or videos of the affected persons, or as we have been told, the affected persons..”

“The case does not exist in the media space. Nevertheless, without any doubt, Russia’s Investigative Committee, Russia’s Embassy to the United Kingdom and Foreign Ministry will be cheering them up with news from the front. We have something to tell them..”

Former UK ambassador Craig Murray wrote the other day he thinks a D-Notice has been issued on the Skripal case, effectively a full media gag order. Maybe that’s why the Telegraph came with a story of BP CEO Bob Dudley having been ‘poisoned’ in Russia 10 years ago (BP calls it a ‘complete urban myth’). And the Mail on Sunday ‘reported’ that Yulia Skripal’s fiance has vanished and is thought to be a Putin agent. You guessed it, that was an ‘exclusive’.

Put it next to an exposé about the flower arrangements at the royal wedding to a TV star and everyone in Britain will eat it up. But I’ll give the following from the Independent a few nods:


Sajid Javid Could Yet Be The Victim The Windrush Scandal Needs

She is a British woman. She has been in Britain since the 1960s. Then she was denied access to basic services by the Home Office, including letters she appears to have written and signed herself, and now she finds herself out of a job. Amber Rudd may have tried to take responsibility for the Windrush scandal. In fact she is merely its latest victim. You don’t even need to be an abused ethnic minority British pensioner to know who’s really responsible for the Windrush scandal. But it helps.

It also helps that ever since Amber Rudd resigned from the Home Office, actual Windrush victims have formed an orderly queue to point out they don’t hold her responsible. They hold Theresa May responsible. And when you’re under that kind of pressure, it’s very important that somebody else be found to take the blame as quickly as possible.

On Monday afternoon, the home secretary came to the House of Commons to answer an urgent question on the “government’s handling of the Windrush scandal”. It cannot be ignored that the home secretary who came to the despatch box to do it was not the same home secretary as when the urgent question had been granted. But it almost made no difference. Sajid Javid, a few hours into his new job, still had the wherewithal to repeat his best Windrush lines.

“I myself am a second generation migrant. It could have been my mum, or my uncle, or even me,” he attempted to boom. I mean, it could have been him. Sajid Javid is after all, the son of a bus conductor from Pakistan. But there are certain registers of righteous anger that are simply not accessible to a chap that was first made a director at Deutsche Bank at the age of 31. It could have been me. I mean, it wasn’t me. Come on. Don’t be daft. I’m absolutely loaded. But it could have been me. And that will have to do.

Though there had been a radical recasting of the lead character, the script was the same. Just as on Thursday, when Amber Rudd had come to the Commons for what turned out to be the curtain-raiser for the final season of her Windrush Apology boxset, the same cameos were there. Philip Davies and Iain Duncan Smith were there to urge the new home secretary NOT to allow the systematic abuse of British pensioners to fool him into going soft on illegal immigrants, because that, after all, is the main point.



Now, it doesn’t matter one bit who holds whom responsible for Windrush. Theresa May is responsible. She designed the entire ‘hostile environment’ environment. She ordered the buses that said Go Home. She knew about the status of many Windrush people, but counted on her ilk to agree that they should be kicked out anyway. And on no press for the issue.

On that last bit, she was right for years. But then she wasn’t. The Guardian seeks all the kudos for that, but they were silent for years as well. And NOW May says of course they are Britons, they belong to us, we will compensate them for what went wrong. As those secret charter flights just keep flying and still deport more of those same people. Marie Antoinette herself would have been appalled.


It seems unthinkable in a civilized nation that all this would not bring down its architect. But even if it doesn’t, Brexit will. And besides, we have to wonder how civilized Britain truly is. As for Brexit, a satisfactory solution to the issue -or rather, the plethora of issues- does not exist under the present circumstances, and therefore cannot be found by May. Not that she would find it if it were there.

May represents, on Brexit too, a narrow view shaped by the blinders of entitlement. Europe is simply not going to give the UK elite what they feel entitled too, and May will not be able to sell that at home. The best she can do is say: ‘They don’t think we’re special’, and try to make that into some kind of scandal. By the time the British figure out what’s really going on, it’ll be too late.

They’ve let May and Boris negotiate tons of things that will prove either irreversible or very costly to reverse. Even if there will be a second Brexit vote, it won’t just erase all the things that have already been agreed. Rudderless, bereft of all ethics and morals, wealthy, May and Boris and Gove et al are the very last people to negotiate anything for a country.

But in our ‘democratic’ systems, that’s precisely why they are handed that role. The people we elect to represent us have no intention whatsoever of representing us, they represent themselves and their sponsors. They’re just good at making us think otherwise. We elect the best liars, not the best people.

Economist Dambisa Moyo identifies the problem and offers a -shaky- solution:


In the UK, a 2012 study found that the number of career politicians (that is, politicians with minimal experience outside of politics) had more than quadrupled between 1983 and 2010. This rise has coincided with growing cynicism about the effectiveness of elected leaders. So the process for selecting candidates could be altered to discriminate against someone seeking to enter parliament after five years as a political researcher.

It would instead favour candidates with a wider range of experience outside politics and a good knowledge of the broader workings of the economy in key sectors such as business, agriculture, education and healthcare. A further move to improve credibility could be to link politicians’ pay to the broader progress of the country. MPs or senators could be rewarded on how the country performs in key areas. In this way, voters would be better able to judge politicians come election time.

Singapore is an example of how this can work. Ministers receive bonus payments if the government hits key targets around GDP growth, income growth (including for the lowest 20% of earners) and unemployment.


We could talk about this until the cows have left and come back home 100 times. One addition from yours truly: make politics an unappealing prospect from a financial point of view. Moderate pay and no revolving doors. No campaign financing from sponsors who can profit from political connections. But it would still be tough. The system self-selects for sociopathic types.

Jeremy Corbyn is one of those rare politicians that I would guess is not a natural born liar. But then, perhaps that’s exactly why he’s having such a hard time, and why it’s so easy for the Tories, and the Blairites in his own party, to throw him off balance and effectively muffle and muzzle him.


Regardless, after tomorrow we’ll know quite a bit more about how many Britons themselves are racists and bigots. Because after what’s come out recently, every single person who votes for the party that May represents, can not credibly claim to not be one. May’s attitude, and that of the rest her entitleds, is: ‘Look, we said we’d pay them off, so stop blaming us anymore for making their lives living hell for a decade or more’.

That is textbook “First they came for the Jews, and I wasn’t one of them” territory. Britain is a very troubled society all across the board, granted, but at least weed out the worst of it tomorrow, while you can, and then work on the rest. It won’t be easy, but you have no choices left. You ran out.

Vote for the bigots, and you become one. Every single person, every single vote.



Nov 232016
 November 23, 2016  Posted by at 4:24 pm Finance Tagged with: , , , , , , ,  

W. Eugene Smith Orson Welles 1942


Ever since the November 8 election, it’s been hard to write anything that makes actual sense, as evidenced by just about everything I’ve read in the past two weeks, little of which was particularly elevating, because just like before the vote, and just like in pre- and post-Brexit Britain, all there is left in the US are deeply dug-in heels.

Everything and everyone is standing still; dug-in heels do that for you. Problem is, of course, that standing still doesn’t get you anywhere. You’re going to have to move or you’ll be left behind. Somehow it’s wonderfully ironic that Donald Trump is the only main character in this play who’s moving, and he does so in more ways than one. It’s like he’s going head first against the latest braindead internet craze, mannequin. If he does it on purpose, I commend him for it.

Sure, one might say Obama has moved a little too, suggesting that a smooth transition of power is paramount, talking a whole different book from what he said about the Donald before November 8. But then Obama doesn’t have many other options. His job requires him to do it, and say it. Over the past few months, the impression has crept upon me that Obama is a mannequin, though not still and silent, but one machine-trained to say the perfect thing at the perfect moment. And then still lost.


As predicted pre-election by the precious few willing to ponder a view that’s not entirely partisan or one-sided, Trump now rolls back his most extreme views, and is not afraid to revisit climate change, or a potential Hillary investigation, nor does he shy away from denouncing the most outrageous right wing movements and viewpoints among his voters and supporters.

Not even if every single person he talks to as he builds his administration is automatically labeled a racist, or worse, by US media, politicians and others that have gotten lost in their anti-Trump trenches.

Donald Trump will keep doing what he’s always done: throw ideas out there, see where they land and show that he’s flexible about them. In the process he will make many of his supporters more flexible too. He is the leader, he is their leader. When he reconsiders his views of issues, he ‘invites’ them to do the same. As we move forward, we’ll see this attitude shave off a lot of the sharp edges. It’s all entirely predictable, it’s almost a better story than the Pied Piper.

Of course you san say that some of the views expressed by Trump voters, and the acts committed, don’t belong in America. You would be right. But what you can’t say is that Trump is the source of these acts and views. They were there already. They were ignored and left to fester for years, however, and because of that grew sharper and more pronounced as time went on, until someone finally came along and did not ignore them. Talk about predictable.


But without an actual conversation taking place, without people from both sides, gaping as their differences may seem, willing to leave their trenches and talk to Donald Trump, and about him, from something other than the moral heights they have convinced each other and themselves were theirs and theirs alone, without that conversation there’s only so much he can do. They have to move; he already does.

Mind you, he’s got plenty room to maneuver in what he does, because he won the election, and nobody else. He can fill his government with a bunch of weirdos and radicals, he’s got the mandate. But that’s not what he wants. Trump meant it when he said he wants to be a president for all Americans.

The last thing Donald Trump wants is to fail as president. he instead wants to be the best. That requires motion from all sides, though. What Trump wants and needs right now is for people to reach out to him, to tell him they’re willing to talk, that they’re willing to give him the benefit of the doubt, and work with him.

Don’t forget, he has to take on his own right wing camp -which will be a hard enough fight- as much as all those who see themselves as more liberal than he is (liberal is just a word in a country in which there is no left left). While at the same time those ‘liberals’ seem to spend all their waking hours exclusively trying to agree on what to call the people they see as America’s worst: are they neo-nazi’s, racists, white supremacists, bigots?

And as if that is not enough, all this comes with an outspoken implication that Trump is as bad as the worst of his voters. The anti-Trump camp are so busy with this that they fail to see the president-elect has long since moved away from what they thought his position was (was it ever?), and that they are the ones unwilling to talk, not him.


Mind you, this is as true for the right wing as for the left. Trump risks facing a lot of backlash from the right for not investigating Hillary, for softening his climate change view, for keeping some aspects of Obamacare, or some parts of the trade deals he has previously dismissed. He knows the risks.

The extreme right has misunderstood him as much as the ‘extreme liberal’ (a.k.a. the Hillary camp including the media). And if Britain is any guide, where 5 months after Brexit the main dish served is still made up of name calling and various other civilized pastimes, Trump has a long, windy and especially bumpy road ahead of him. America should perhaps count itself lucky that he’s a whole lot more flexible than the clowns performing on all sides of the aisles in the UK.

He’s willing to adapt, but that won’t do a lot of good if the other players are not. People may try to mock him for first bashing the New York Times and then, within 24 hours, calling it “a great great American jewel – world jewel”, but that’s only bad or inconsistent if you refuse to try and think like him.

Of course the New York Times, through history, has been a jewel of global media; it just didn’t act like one in the run-up to November 8. Pointing that out is not inconsistent from Trump’s angle: instead, it’s not difficult to make the case that it’s the New York Times that has been inconsistent, by leaving its journalistic standards -i.e. objectivity- behind to go after Trump.

After all, it’s hard to argue that the New York Times was NOT a partisan channel in the election. That so many other news media took the same position may have made it seem normal, but that doesn’t make it so.

Americans from all corners will have to come down from their morally righteous and politically correct mountains. They will then find that Donald Trump was way ahead of them.


And no, I am not a Trump supporter. But given the alternatives presented, I do find myself wondering if there was a single one amongst them more fit for the job than the Donald. Not that it matters anymore, the election is over and he won, recounts and discussions about electoral collages or not.

Is that really such a bad thing? Trump won. Which means the Democrats and Republicans did not. The Bush dynasty and Clinton dynasty did not. The incumbent elites did not. That is quite the clean up job. Does anyone want to argue such a clean up was not needed? Donald Trump is shaking up a world in which too many people and institutions across the political scene have been able to gain too much power and influence and wealth for too long, and it’s hard to see that as a big negative.

Besides, whether you like it or not, he’s your president. May I humbly suggest y’all make the best of what you got? Perhaps, and I must say perhaps because I should learn more about this, Trump’s talk Monday with Bernie Sanders-territory left-wing Democrat -and Hindu- Tulsi Gabbard, which may well land her a cabinet post, is indicative of what we may expect. So you got someone who’s left-wing, a woman, and very much not Christian. How many prejudices is that?

Gabbard wants the US to stop killing people in Syria. Is that a bad thing, anyone? She broke with the DNC when she figured out then-Chairwoman Debbie Wasserman Schultz was favoring Hillary and working against Bernie.

If Gabbard’s move is not enough to make you move and un-dig your heels, how about Bernie Sanders himself taking a seat in the Trump government? Would that do the trick? The Donald would love it. Bernie would be told he’s betraying his party, for sure, but we all know the party betrayed him first. He’s either got a few years left to do something real, or he can see himself be betrayed all over again in 2020.

By now, it’s not beyond the realm of possibilities. A National Government is something many nations have tried through history. It might not be a bad idea for the US, because the future sure is not made exclusively of moonshine and roses.

The keyword is flexibility, guys. You have a president-to-be who gets that. How about you?



JavierJuén 2016



May 112015
 May 11, 2015  Posted by at 10:58 am Finance Tagged with: , , , , , , , , , , ,  

Unknown Wharf, Federal artillery, and schooners, City Point, Virginia 1865

ECB’s Nowotny: Greece Much More Political Than Economic Question (Reuters)
Greece’s ‘War Cabinet’ Prepares To Battle EU Creditors As Anger Mounts (AEP)
IMF and ECB Loom Large Over Greece’s Debt Talks (NY Times)
How The ECB Became The Real Villain Of Greece’s Debt Drama (Telegraph)
No Solution In Sight For Greek Crisis – Tsipras’ Impossible Dilemma (Guardian)
EU’s Unraveling Plans For Greek Debt Risks Split Among Creditors (Bloomberg)
IMF Works With Greece’s Neighbors to Contain Default Risks (WSJ)
It’s Not Just Greece, China’s Retreat Threatens European Bonds (Bloomberg)
Farewell To The United Kingdom- Let It Bleed (Tariq Ali)
Cameron Must Accept SNP’s Anti-Austerity Mandate, Or The UK Is Finished (IBT)
Sturgeon Says SNP Is Real Opposition in Commons Amid Labour Woes (Bloomberg)
Anti-Austerity Group Plans Major Protest Outside Bank Of England (Guardian)
The Economist’s Racist Headline Must be Retracted Immediately (Bill Black)
Goldilocks Unemployment: A Disgusting Bowl Of Porridge (Mark St.Cyr)
Italy Must Become A Civilised Country With A Citizen’s Income (Grillo)
The Killing of Osama bin Laden (Seymour Hersh)
Inequality: How Rich Countries Can Make A Difference (Ken Rogoff)
EU Plans Refugee Quotas Forcing States To ‘Share’ Burden (Guardian)

It was always just politics.

ECB’s Nowotny: Greece More Political Than Economic Question (Reuters)

Any solution to Greece’s financial woes is much more of a political than an economic question, European Central Bank policymaker Ewald Nowotny said on Monday, as eurozone finance ministers meet to continue Greek debt talks. Top officials have voiced little optimism about a breakthrough at the meeting. Nowotny declined to suggest a way out of the impasse, reiterating that the ECB’s role was to ensure price and financial stability. Referring to Monday’s Eurogroup meeting he said: “It would be premature to give any details.”

Read more …

“We have agreed on a tougher strategy to stop making compromises. We were unified and we have a spring our step once again..”

Greece’s ‘War Cabinet’ Prepares To Battle EU Creditors As Anger Mounts (AEP)

Greece’s “war cabinet” has resolved to defy the European creditor powers after a nine-hour meeting on Sunday, ensuring a crescendo of brinkmanship as the increasingly bitter fight comes to a head this month. Premier Alexis Tsipras and the leading figures of his Syriza movement agreed to defend their “red lines” on pensions and collective bargaining and prepare for battle whatever the consequences, deeming the olive-branch policy of recent weeks to have reached a dead end. “We have agreed on a tougher strategy to stop making compromises. We were unified and we have a spring our step once again,” said one participant. The Syriza government knows that this an extremely high-risk strategy. The Greek treasury is already empty and emergency funds seized from local authorities and state entities will soon run out.

Greece’s mayors warned over the weekend that they would not release any more funds to the central government. The Greek finance ministry must pay the International Monetary Fund €750m (£544m) on Tuesday, the first of an escalating set of deadlines running into August. “We have enough money to pay the IMF this week but not enough to get through to the end of the month. We all know that,” said one minister, speaking to The Telegraph immediately after the emotional conclave. The war council came a day before Greece’s three-headed team – deputy premier Giannis Dragasakis, finance minister Yanis Varoufakis and deputy foreign minister Euclid Tsakalotos – are due to go to Brussels for a crucial meeting with Eurogroup ministers Time is running out for a deal opening the way for the disbursement of €7.2bn under an interim agreement, due to expire in June.

It is even harder to see how the two sides can narrow their enormous differences on a new bail-out programme, which must be intricately negotiated and then approved by the parliaments of the creditor states. German finance minister Wolfgang Schauble said over the weekend that Greece risked spinning into default unless there was a breakthrough soon. “Such processes also have irrational elements. Experiences elsewhere in the world have shown that a country can suddenly slide into insolvency,” he told the Frankfurter Allgemeine.
Greek officials retort that this is a conceptual misunderstanding by the German and North European authorities. Syriza officials say they may trigger the biggest sovereign default deliberately if pushed too far, concluding that it is a better outcome than national humiliation and the betrayal of their electoral vows to the Greek people.

“If it comes to the crunch, Greece must default and go its way,” said Costas Lapavitzas, a Syriza MP and member of the party’s standing committee. “There is no point raiding pension funds to buy time. We just exhaust ourselves for no purpose.” “We went up and down Greece in the elections urging the voters to throw out the old government. The question now is whether we mean what we say, and whether we have the courage of our convictions.”

Read more …

“At some point, you have to give up this orthodoxy of saying, ‘This is the right way of doing things.’ This is an unusual case.”

IMF and ECB Loom Large Over Greece’s Debt Talks (NY Times)

Greek leaders have fought fiercely in recent months with politicians from other European countries over relief on Greece’s vast debt load. Yet the power to decide the fate of Greece lies not just in the hands of these national governments, but also with unelected officials at two powerful institutions: the ECB and the IMF. Each is a creditor to Greece, and each is expecting the country to repay it billions of dollars of debt in the coming weeks. The influence of the ECB and the IMF will be felt behind the scenes on Monday, when finance ministers from Greece and other European nations meet in their latest effort to break an impasse that is paralyzing the Greek economy and frightening global markets. Greece is expected to repay €750 million to the monetary fund on Tuesday as scheduled.

For the rest of the year, however, its debt repayments to the fund and the central bank total nearly €12 billion. The politicians at the meeting are racing against the clock to forge a deal that would give Greece enough money to repay both this summer. In theory, both institutions could greatly ease the situation by agreeing to delay repayment, or even forgiving some of their Greek debt. But they see themselves as a special class of creditors — so-called lenders of last resort — that should not write off the money they lend. Still, some sovereign debt specialists say that there is a case for the monetary fund to take a hit on its Greek loans. The institution, they assert, backed the policies that deflated Greece’s economy, making it harder for Greece to service its debt.

“There is no question in my mind that the I.M.F. needs to be part of the debt forgiveness,” said Ashoka Mody, a visiting professor at Princeton and formerly a senior official at the fund. “At some point, you have to give up this orthodoxy of saying, ‘This is the right way of doing things.’ This is an unusual case.” Debt forgiveness from the central bank has even broader support from outside investors and economists because the bank avoided taking a loss on €27 billion worth of Greek bonds in its portfolio while private sector investors lost more than half of their money in the 2012 Greek debt restructuring. Still, there has been no sign that either institution is considering yielding on its payment schedule.

If there are no concrete signs of progress in the talks Monday, a majority of the central bank’s governing council would be in favor of placing additional restrictions on lending to Greek banks as early as this week, people briefed on the council’s discussions said. “Their interest is to get their money back,” said Zsolt Darvas, a senior fellow at Bruegel, a research organization in Brussels. Greek officials, meanwhile, have contemplated steps that would test the institutions’ hard-line stance. Discussions in the Greek government have included assessing the pros and cons of not paying the central bank and the monetary fund. In such a case, which was described as a last-ditch option and not a plan for action, Greece would keep paying debts owed to private sector bondholders and other European governments.

Read more …

“In their attempt to respect their duties, the ECB’s policymakers have made themselves political..”

How The ECB Became The Real Villain Of Greece’s Debt Drama (Telegraph)

When a rogue protester scaled the platform occupied by European Central Bank president Mario Draghi at his monthly press conference in April, the usually unruffled Italian could be forgiven for being paralysed by fear. Confronted with female activist shouting “end the ECB dictatorship”, Mr Draghi was showered with pamphlets bearing a list of inchoate threats, accusing the central bank of “autocratic hegemony” and Mr Draghi of being an evil “master of the universe”. As she was swiftly whisked away by ECB henchman, the Twittersphere was soon abuzz with rumours of the identity and possible motivation behind Mr Draghi’s “confetti-bomber.” As it turned out, 21-year old German Josephine Witt, was not a disgruntled Greek citizen demanding answers from the ECB chief.

But the feminist agitator was a stark reminder that technocratic central bankers are not immune from public anger over eurozone economic policy. In the last three months, the Frankfurt-based ECB has become the target of vociferous criticism for its handling of the Greek crisis. Weeks before the confetti attack, Mr Draghi was heckled by a Greek journalist at a press conference in Nicosia. Before that, he was the subject of a tirade from a Greek MEP during an address at the European Parliament. On both occasions, the Italian was shouted down as he was forced to defend his institution’s role in Greece’s debt drama. “In their attempt to respect their duties, the ECB’s policymakers have made themselves political,” Greece’s finance minister Yanis Varoufakis told an audience of academics and economists in Paris last month.

The refrain strikes at the heart of his government’s complaints against the notionally independent ECB. As one of Greece’s three main creditors – alongside the IMF and the European Commission – the central bank is unique in wielding the power that can ultimately force the country out of the single currency. Despite not officially being party to the political negotiations over extending Greece’s bail-out, the ECB has made a number of discretionary moves since the Syriza government was elected just over 100 days ago. When he first swept into power, Prime Minister Alexis Tsipras appealed to Mr Draghi to provide some form of bridging finance to keep the country afloat as he sought to re-write the terms of Greece’s rescue programme. It soon became clear the Italian would not be playing ball. Not only has the ECB rebuffed requests for temporary financial relief, but its disciplinarian stance has led to accusations that it is acting ‘ultra vires’ – taking politically motivated action outside of its legal remit to ensure financial stability in the eurozone.

Read more …

“It’s not in anyone’s interests to have a crisis now..”

No Solution In Sight For Greek Crisis – Tsipras’ Impossible Dilemma (Guardian)

“Nothing will change this week,” said Aris Karnachoritis confidently as the waitress handed out bottles of beer and frosted glasses to him and his friends. Constantinos Neocleous, sitting beside him at a table on the beach at Vouliagmeni near Athens, nodded in agreement. “It’s not in anyone’s interests to have a crisis now,” he said. Beyond the beach lay shallow waters of radiant turquoise. Children paddled. Teenagers romped. And from nearby, where a group of young men were playing beach tennis, came the comforting “plock-plock” sound of bat on ball. The talks between Alexis Tsipras’s government and its creditors have dragged on for so long that it has become hard to believe there will ever be a decisive make-or-break juncture.

And never has that been harder to believe than now, with the arrival of summer and the entrancing distractions it brings to a country like Greece. There is a striking disconnection in Athens between the blithe lack of concern that the government evinces, and which it has successfully communicated to much of the public, and the objective seriousness of Greece’s plight. This week Greece and the eurozone face a week of fresh nail-biting uncertainty as the single currency area’s finance ministers prepare to report on progress towards an agreement with Tsipras’s government. On Tuesday Greece is due to repay €770m (£560m) to the IMF. A deal with its creditors on moves to liberalise the economy would give it access to the remaining €7.2bn from a €240bn bailout.

But it has refused to budge on two “red-line” demands – for pension cuts and looser rules on hiring and firing – and hopes of reaching an agreement in time for a meeting of the finance ministers on Monday have gradually seeped away. On Thursday Greece’s finance minister, Yanis Varoufakis, promised that the IMF would nevertheless get its money. Armageddon – a Greek default on its borrowings followed in all likelihood by exit from the eurozone – may once again have been postponed. But for how long?

Beyond the IMF deadline loom far bigger repayments the government has to make to the ECB in the summer. Yet it is already so desperately short of funds that it has ordered local authorities and public bodies to turn over their cash reserves to the central bank. “We have only the money to pay for this month,” conceded Karnachoritis, a young civil engineer, as he sipped his beer. “But that has been the situation for the past two months.” Like his companions, he thought it would take several more months to reach an agreement. “I don’t believe anything will happen before September,” he said.

Read more …

“The uneasy relationship with the Eurogroup, which wanted IMF rigor in bailout reviews but not its debt sustainability and financing criteria, is looking increasingly unsustainable..” “Just like the Greek debt.”

EU’s Unraveling Plans For Greek Debt Risks Split Among Creditors (Bloomberg)

Greece’s ballooning debt load is casting doubt over the IMF’s role in future bailouts. The IMF typically needs debt to be sustainable to provide more funds and, with the economy faltering, Greece is heading in the wrong direction. Creditors preparing for talks on Greece this week have just one positive scenario and three negative ones, the most extreme of which is that the government starts paying employees in IOUs, German newspaper Die Welt reported. The European Commission forecast last week that the country’s debt will be 174% of gross domestic product next year, 15 percentage points above the level projected in February. And even that assumes Prime Minister Alexis Tsipras reaches a deal to get previously agreed aid flowing.

The projection means that if there’s an agreement, the Greek leader is still going to hit bureaucratic and political resistance to longer-term support. While the euro area has denied debt relief to Greece and insisted Tsipras observe the terms of the existing bailout, the IMF has signaled its concern over the deterioration in the country’s finances. “The uneasy relationship with the Eurogroup, which wanted IMF rigor in bailout reviews but not its debt sustainability and financing criteria, is looking increasingly unsustainable,” said Michael Michaelides a rates strategist at Royal Bank of Scotland Plc. “Just like the Greek debt.” Asked about the implications of the Commission’s forecasts for Greece, IMF spokeswoman Angela Gaviria referred to a November 2012 statement in which Managing Director Christine Lagarde said Greece’s debt was expected to decrease to 124% of GDP by 2020.

As Greece’s chances of hitting the target recede, it makes it more difficult for the IMF to justify extending additional funds because the Washington-based lender is prohibited by its own rules from lending to countries with unsustainable debts. If the euro area concedes that the debt burden is not sustainable, that would add weight to Greece’s appeal for more debt relief, an offer that its creditors have dangled since 2012 as an incentive to make good on the terms of its bailout. Greece could win a cut in its interest payment and an extension of its repayment period if it sticks to the deal and delivers a primary budget surplus.

Read more …

How the IMF grabs more control.

IMF Works With Greece’s Neighbors to Contain Default Risks (WSJ)

The IMF is working with national authorities in southeastern Europe on contingency plans for a Greek default, a senior fund official said—a rare public admission that regulators are preparing for the potential failure to agree on continued aid for Athens. Greek banks are big players in some of its neighbors’ financial systems. In Bulgaria, subsidiaries of National Bank of Greece, Alpha Bank, Piraeus Bank and Eurobank Ergasias own around 22% of banking assets, roughly the same as Greek banks own in Macedonia. Greek banks are also active in Romania, Albania and Serbia. “We are in a dialogue with all of these countries,” said Jörg Decressin, deputy director of the IMF’s Europe department. “We are talking with them about the contingency plans they have, what measures they can take.”

As part of the discussions, the IMF has asked national supervisors to ensure that subsidiaries of Greek banks have enough assets that they can exchange for emergency financing at their own central banks—in case financing from their parent institutions is suddenly cut off—and that deposit-insurance funds are at sufficient levels, he said. Negotiations between Greece and its international creditors—the other eurozone countries and the IMF—have been advancing slowly, despite warnings from Greek officials that the government is close to running out of money. “It would be foolish for anyone in the policy world not to be worried at this stage,” Mr. Decressin said.

European officials expect no breakthroughs at a meeting of the currency union’s finance ministers on Monday. That means Greek lenders will remain under pressure, dependent on relatively expensive liquidity from the Greek central bank and at risk of bank runs in case doubts emerge over their ability to pay out deposits. Overall, the IMF believes that subsidiaries of Greek banks in southeastern Europe should be able to withstand the failure of their parent companies. “Our assessment of the Greek banks in that region is that they are fairly liquid; we have not seen major deposit outflow,” Mr. Decressin said. Because they are subsidiaries, rather than branches, the lenders have to hold their own capital buffers and can refinance themselves at national central banks. That would make it easier to split them off from their parent banks if necessary.

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Elephant, meet room.

It’s Not Just Greece, China’s Retreat Threatens European Bonds (Bloomberg)

European policy makers will be focused on Greek aid talks in Brussels on Monday. Investors may need to look further afield to fully explain the sell-off in the continent’s sovereign debt market. China’s foreign currency reserves had their biggest quarterly drop on record in the first three months of the year and the yuan is trading at the closest to fair value since 2010, according to Goldman Sachs. That means less demand for assets in dollars and euros from the world’s biggest creditor. The Chinese central bank has amassed $3.73 trillion in currency reserves over the past decade in a bid to hold down the value of the yuan and underpin the competitiveness of its exporters.

As the government in Beijing changes gear, cultivating domestic demand to sustain economic growth, it may affect European bond markets just as much as the Greek efforts to win better terms from creditors. “It’s quite clear that China’s foreign exchange reserves can’t grow like before,” said Li Jie, head of the foreign-exchange reserve research center at the Central University of Finance and Economics in Beijing. “There will be fewer and fewer funds available from China for European treasury bonds.” The People’s Bank of China said Sunday it will reduce the one-year lending rate by a quarter of a%age point to 5.1%, in a further sign of the shift in focus.

Germany’s 10-year borrowing costs almost quadrupled over the past three weeks as investors turned against negative yields and those on Italian and Spanish securities breached 2% for the first time this year on May 7. Bonds fell even as the European Central Bank pressed ahead with its €1.1 trillion program of government debt purchases. Euro-area finance ministers are meeting in Brussels on Monday to assess Greece’s plans to meet the terms of its bailout and obtain the aid it needs to stave off a default.

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View from the left.

Farewell To The United Kingdom- Let It Bleed (Tariq Ali)

In England the third party in terms of number of votes cast is UKIP. It gained votes from both Labour and Conservatives, but its 4 million votes (12.6%) obtained just a single seat in Parliament. The Greens with over a million also have a single MP. The absurdity of an electoral system that gives the Conservatives an overall majority (331 seats) with 36.9% of the votes cast, Labour (232 seats) with 30.4% reducing the other English parties to nothingness is clearly long past its sell by date. A serious campaign for a proportional system is needed. The first-past-the-post, winner-takes all system is a malignant cancer that needs to be extracted from the body politic.

What of English radicalism? It’s not a pure accident that a right-wing party like UKIP has become the third force. The effective collaboration between the major trades unions and the Labour leadership meant that building social movements to challenge privatizations and demanding public ownership for utilities, more public housing, local democracy, and the renationalization of the railways fell by the wayside. No other force was capable of organizing an extra-parliamentary base for a rejection and reversal of extreme centre policies. This is the challenge that now confronts all those who want a strategic break with the Thatcher-Blair consensus in England. Not an easy task. Possibilities, however, exist but they require forces on the ground to help create a new movement that speaks for the oppressed and exploited.

The Labour leadership contest is a no-hoper for the Left. The names being touted are worse than useless. What would help a great deal is if early in the new parliament, the handful of left MPs effectively broke from Labour and established a new, radical caucus to link up with forces outside. I doubt that they will and here the Bennite tradition is, to put it at its mildest, unhelpful. Its attachment to Labour at a time when the party broke with its own social-democratic past and opted for a full-blown capitalism was wrong-headed and led to an impasse.

We need an alliance of all radical forces to build an anti-capitalist movement in England. A movement that is both new but also prepared to search the past for help: the Grand Remonstrance of the 17th century, the Chartist rebellions of the 19th century, the more recent developments in South America, Greece and Spain also offer a way forward. As for the Labour Party, I think we should let it bleed. Here the Scottish route offers hope.

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More or less what I was saying yesterday.

Cameron Must Accept SNP’s Anti-Austerity Mandate, Or The UK Is Finished (IBT)

The electoral divergence between Scotland and England is, of course, even more extreme this time. The Tory government has just one seat in Scotland, compared to the 10 Thatcher was left with after the 1987 rout. The other seats are not dominated by a Labour party content to bide its time until it can build a UK-wide majority, but by a pro-independence party that will not accept the legitimacy of Tory rule unless the “vow” which secured the No vote in last year’s referendum is implemented in full. That perhaps wouldn’t pose such a problem for Cameron if the policies that he has received a clear English mandate to implement weren’t so utterly irreconcilable with the policies that the SNP have won an even clearer (in fact much, much clearer) Scottish mandate for.

In Scotland, the democratic will is for an end for austerity, in England it is for swingeing cuts. The ‘One Nation’ rule that Cameron rather oddly promises is almost a contradiction in terms when the nation in question has just spoken with two distinct voices. If London rule is to be maintained, the only way of respecting the Scottish people’s wishes is to exempt them from the austerity imposed on everyone else. That is surely inconceivable. Ironically, a compromise to cover the whole UK probably could have been reached if a Labour minority government had taken office with the support of the SNP.

Cameron chose to whip up irrational fear about that possibility in England, and now he must live with the consequences. In the light of Thursday’s result, the circle can only be squared by constitutional change. Any previous distinction between Nicola Sturgeon’s demands for an end to austerity and for more powers to be transferred to the Scottish Parliament has suddenly vanished, because under a Tory majority government the first is literally impossible without the second.

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But can she speak for all Britons?

Sturgeon Says SNP Is Real Opposition in Commons Amid Labour Woes (Bloomberg)

Scottish First Minister Nicola Sturgeon staked a claim for her nationalists to be seen as the effective opposition to David Cameron’s Tories in the U.K. Parliament as Labour seeks a new leader in the wake of its election defeat. “Given that Labour are entering a period of introspection, questioning their very purpose in life, the SNP is going to be the principal opposition to the Conservatives,” Sturgeon said on BBC Television’s “Andrew Marr Show” Sunday. “There are people in England, Wales and Northern Ireland who will be as disappointed as people in Scotland that we’re looking at a majority Conservative government. We can be a voice for them.”

Sturgeon’s Scottish National Party took 50% of the vote and 56 of the 59 House of Commons seats in Scotland in Thursday’s election, in which the Tories unexpectedly won a parliamentary majority. Labour leader Ed Miliband resigned after the party’s defeat, which saw it lose 40 seats in Scotland. SNP support surged after the failure to achieve a majority for independence from the U.K. in September’s referendum. Cameron “cannot act now as if it’s business as usual in Scotland” and will have to offer the semi-autonomous Scottish government and the Parliament in Edinburgh more additional powers than have already been promised in the wake of the referendum, Sturgeon said.

The prime minister said in a victory speech on Friday that he intends to implement his devolution plans for Scotland as quickly as possible, “to create the strongest devolved government anywhere in the world with important powers over taxation.” “Scotland voted overwhelmingly for change and I think that has to be heeded,” she said, repeating calls for “priority devolution of powers over business taxes, employment, the minimum wage, welfare.” Another independence referendum is not “on the immediate horizon,” Sturgeon said. “What we have to do now is make sure we get the best deal for Scotland within the Westminster system.”

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The Guardian conveniently focuses on ‘disorder’.

Anti-Austerity Group Plans Major Protest Outside Bank Of England (Guardian)

The anti-austerity group behind a protest that escalated into violent clashes with riot police outside Downing Street on Saturday is planning another demonstration outside the Bank of England next month. The People’s Assembly has told campaigners to assemble “right on the doorstep of the very people who created the crisis in the first place” in central London on 20 June, sparking what could become a summer of anti-austerity protests across the UK. Hundreds of people attended the group’s impromptu demonstration outside Downing Street on Saturday after David Cameron was returned to No 10 with a Conservative majority. The protest quickly turned ugly, with green smoke bombs and tomato ketchup thrown at riot police officers in clashes that led to 15 arrests for violent disorder or assaulting police.[..]

In a Facebook post announcing its 20 June march, the People’s Assembly said it was arranging travel for supporters from across the country to the Bank of England for a demonstration that would be “bigger and bolder than ever we have done before”. More than 32,000 people on Facebook have said they will attend the rally, which would draw significant resources from both City of London police and the Metropolitan police if it is on the same scale as a 50,000-strong protest organised by the group last summer. The group says in its invitation to supporters: “With the Tories going it alone in government we know exactly what to expect. More nasty, destructive cuts to the things ordinary people care about – the NHS, the welfare state, education and public services.

“We’ll be assembling the demonstration in the heart of the City of London right on the doorstep of the very people who created the crisis in the first place, the banks and their friends in Westminster. We demand that the bankers and elite should pay for the crisis and not the vast majority who had nothing to do with it. “Now is the time to get organizing, to mobilize our communities, to prepare transport and spread the word. We need to do all that we can to make this demonstration bigger and bolder than ever we have done before.”

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English media exposed as bigots.

The Economist’s Racist Headline Must be Retracted Immediately (Bill Black)

It took exactly one day for the Tory election victory in the UK to produce the confidence among the Conservatives only remaining media organ with even a semblance of journalistic professionalism to reveal its true racism against the Scots. The Economist felt empowered to headline its article about the other electoral triumph, by the Scots, as “Ajockalypse now.” Wow, that is such a clever title. One can only imagine the back-slapping among the staff in the magazine’s halls at the ability to go full-racist given the election results. (The English have historically treated the Celts as separate “races.”) Here is a translation of the headline for a non-UK audience. “Jock” is defined in the Urban Dictionary (with a helpful example of usage after the definition):

A term used by English people to generally describe Scottish people in a derogatory fashion (was once a common male nickname within Scotland). It is now considered to verge on racism when used by a non-Scot. The Scottish equivalent for the Irish “Paddy” or “Bog-trotter”. “Those bloody Jocks are at it again with their whinging over the Barnett Formula and North Sea oil revenues.” Another major dictionary’s definition is similar. British Informal: a Scottish soldier or a soldier in a Scottish regiment. Usually Offensive. a term used to refer to or address a Scot”. The Oxford Dictionary agrees. “noun, informal , chiefly derogatory A Scotsman (often as a form of address).”

So the “cleverness” is that the once-respected magazine managed to use an ethnic slur and add an ending to it suggesting that the rise of the Scots as a political power in the House of Commons represents an “apocalypse” – a catastrophe of biblical proportions. Such fun! Let’s see what analogous fun we can have using slurs about other ethnic groups that the English have long despised. Jews, blacks, Catholics, Muslims, and Asians all have such endearing slurs that rhyme with so many words and allow “clever” word play in headlines. Oh, except if the Economist chose any of those groups it would result within the day in a retraction and apology. Celts, however, are fair game and the Scots are the Celtic target of choice today for the Tories. Indeed, Prime Minister Cameron’s paramount election strategy was demonizing the Scots as a “threat” to the English – a fact that the Economist chose to omit in favor of the myth that the Scots were on the “warpath” against the English.

The English papers were littered with other forms of “clever” ethnic slurs in the run-up to the election. “Sweaty sock” rhymes with “jock” and insults Scots as “sweaty” because they are more likely to be industrial laborers. The deliberately doubly offensive “Jockestan” – insulting the Scots and Muslims simultaneously – is a favorite of one of the UK’s prominent “journalists.” A Tory media troll whose claim to “fame” was not being chosen by the Donald as his “Apprentice” uses these slurs. She attacks the SNP leader as a “terrorist” and denounces her because she has red hair. Yes, red hair. Calling someone with red hair “ginger” is a common ad hominem insult in the UK. [..] I confess to a wicked wish that the Donald had picked her as his “Apprentice” – they richly deserve each other.

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“We now have the lowest participation rate since 1977 [..] I will tell you this: one of the words never bandied about during that period when it came to describe any jobs or employment report was “Goldilocks.”

Goldilocks Unemployment: A Disgusting Bowl Of Porridge (Mark St.Cyr)

It’s no wonder we find ourselves in this collective business environment of malaise and atrophy when people who are supposed to be informed, or anything else relating to business, use terms to describe the most recent jobs report as a “Goldilocks” print: i.e., “Not too bad – Not too good.” This term was the moniker de jure of Friday’s cadre of financial media economists, analysts, and next in rotation fund manager. Nothing more than cheerleaders to stagflation is what they’ve all proven themselves to be in my opinion than anything else. The actual print was that the economy created 223K new jobs vs expectations of 228K. Where the overall jobless rate now stands at 5.4 vs 5.5. The kicker? Not in the labor force: 93,194,000 up from 93,175,000. Let that last number sink in a moment.

We currently have over 93 Million able-bodied people without jobs – and growing. This is why it’s near incomprehensible, as well as outright disgusting to me that such a dismal showing in both the headline number as well as the onerous implications of such a downward revision to the month prior, coupled with the outright fallacy of suggesting the rate of unemployment has moved closer still to statistical “full employment” came with near giddiness and if not outright back slapping. i.e., “This is a Goldilocks print. Not too hot – not too cold. With a report like this – The Federal Reserve won’t dare raise rates and might actually have to contemplate instituting another round of QE if not outright QE4ever!” And yes; that was the reaction paraphrased across the financial media outlets. Again, personally – I found it all repulsive.

We now have the lowest participation rate since 1977 when Jimmy Carter was president. Although I was young during that period, I was around and working. (and when I wasn’t working, I was out looking daily) I will tell you this: one of the words never bandied about during that period when it came to describe any jobs or employment report was “Goldilocks.” As a matter of fact it was during that period of time the term “stagflation” came into prominence. The difference? It was used to describe an abysmal economy while hoping at some point the winds would change and we could regain our bearings to move out from under such stifling economic conditions. Today?

As these conditions have once again reared their ugly head the difference is today: these conditions are celebrated by the so-called “smart crowd” as reason to JBTFD! (just buy the dip) For this malaise sends the “right” signals to the Federal Reserve they should dare not raise interest rates off the zero bound anytime soon, and instead prolong this economic atrophy with the possible infusion of yet another round of QE. After all with economic malaise like this – NASDAQ™ 10K here we come!

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All EU countries except Italy, Greece and Hungary have one.

Italy Must Become A Civilised Country With A Citizen’s Income (Grillo)

“There are those that have said that it cannot be done, that the money’s not there, that it’s a gift to lazy people. And yet it’s enough to go round all the European capital cities to see that that’s not true. The Citizen’s Income exists in 25 of the 28 European countries (everywhere except in Italy, Greece and Hungary), even in countries with a GDP that’s just a tenth of what we have in Italy. In Spain the citizen’s income came into existence in 2008, right in the middle of the economic crisis, and it provides €532 a month to anyone with an income less than €5,000 a year. In the Netherlands people get €1,400 a month. In Ireland and Romania there’s no time limit and it keeps going until the person finds a job. In Estonia the law says that the national parliament must adjust the sum each year to allow for alterations in the cost of living.

In Finland the amount is doubled for families. In Lithuania as well as the Citizen’s Income people get their heating costs paid back by the State. In France anyone getting the Citizen’s Income has to sign an agreement that they will cooperate with the social services. In Denmark the citizen’s income is also given to those people under the age of 30 who are living with their parents. In all these countries, anyone who is underhand or who is working without declaring it, is severely punished. In Europe, the laws differ in their content. The requirements and the duration vary from country to country, but the lowest common denominator is there and it’s called the Citizen’s Income. The economic crisis has created a sea of desperation. In Italy, with the bonds brought in by Tremonti and Monti, the world of politics saved the banks, and they gave the financiers shields to protect them against the weapons that they themselves had created. The citizens were abandoned and left to their own devices.

In Europe there’s no such thing as “exited” people because they would have the Citizen’s Income. In Europe, fathers separated from their wives are not sleeping in their cars because they would have the Citizen’s Income. In Europe there are no “bamboccioni” {adult men living off their parents} because, thanks to the Citizen’s Income, they can shop for themselves without waiting for pocket money from mother. In Europe, unemployed people are not committing suicide, because after unemployment benefit ends, they get the Citizen’s Income. Are graduates sending off thousands of CVs to get their first job? While waiting for a response, those in Europe have the Citizen’s Income.

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Great, as Hersh always is.

The Killing of Osama bin Laden (Seymour Hersh)

It’s been four years since a group of US Navy Seals assassinated Osama bin Laden in a night raid on a high-walled compound in Abbottabad, Pakistan. The killing was the high point of Obama’s first term, and a major factor in his re-election. The White House still maintains that the mission was an all-American affair, and that the senior generals of Pakistan’s army and Inter-Services Intelligence agency (ISI) were not told of the raid in advance. This is false, as are many other elements of the Obama administration’s account. The White House’s story might have been written by Lewis Carroll: would bin Laden, target of a massive international manhunt, really decide that a resort town forty miles from Islamabad would be the safest place to live and command al-Qaida’s operations? He was hiding in the open. So America said. [..]

This spring I contacted Durrani and told him in detail what I had learned about the bin Laden assault from American sources: that bin Laden had been a prisoner of the ISI at the Abbottabad compound since 2006; that Kayani and Pasha knew of the raid in advance and had made sure that the two helicopters delivering the Seals to Abbottabad could cross Pakistani airspace without triggering any alarms; that the CIA did not learn of bin Laden’s whereabouts by tracking his couriers, as the White House has claimed since May 2011, but from a former senior Pakistani intelligence officer who betrayed the secret in return for much of the $25 million reward offered by the US, and that, while Obama did order the raid and the Seal team did carry it out, many other aspects of the administration’s account were false.

‘When your version comes out – if you do it – people in Pakistan will be tremendously grateful,’ Durrani told me. ‘For a long time people have stopped trusting what comes out about bin Laden from the official mouths. There will be some negative political comment and some anger, but people like to be told the truth, and what you’ve told me is essentially what I have heard from former colleagues who have been on a fact-finding mission since this episode.’ As a former ISI head, he said, he had been told shortly after the raid by ‘people in the “strategic community” who would know’ that there had been an informant who had alerted the US to bin Laden’s presence in Abbottabad, and that after his killing the US’s betrayed promises left Kayani and Pasha exposed.

The major US source for the account that follows is a retired senior intelligence official who was knowledgeable about the initial intelligence about bin Laden’s presence in Abbottabad. He also was privy to many aspects of the Seals’ training for the raid, and to the various after-action reports. Two other US sources, who had access to corroborating information, have been longtime consultants to the Special Operations Command. I also received information from inside Pakistan about widespread dismay among the senior ISI and military leadership – echoed later by Durrani – over Obama’s decision to go public immediately with news of bin Laden’s death.

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Rogoff sounds confused here.

Inequality: How Rich Countries Can Make A Difference (Ken Rogoff)

Europe’s migration crisis exposes a fundamental flaw, if not towering hypocrisy, in the ongoing debate about economic inequality. Wouldn’t a true progressive support equal opportunity for all people on the planet, rather than just for those of us lucky enough to have been born and raised in rich countries? Many thought leaders in advanced economies advocate an entitlement mentality. But the entitlement stops at the border: though they regard greater redistribution within individual countries as an absolute imperative, people who live in emerging markets or developing countries are left out. If current concerns about inequality were cast entirely in political terms, this inward-looking focus would be understandable; after all, citizens of poor countries cannot vote in rich ones.

But the rhetoric of the inequality debate in rich countries betrays a moral certitude that conveniently ignores the billions of people elsewhere who are far worse off. One must not forget that even after a period of stagnation, the middle class in rich countries remains an upper class from a global perspective. Only about 15% of the world’s population lives in developed economies. Yet advanced countries still account for more than 40% of global consumption and resource depletion. Yes, higher taxes on the wealthy make sense as a way to alleviate inequality within a country. But that will not solve the problem of deep poverty in the developing world. Nor will it do to appeal to moral superiority to justify why someone born in the west enjoys so many advantages.

Yes, sound political and social institutions are the bedrock of sustained economic growth; indeed, they are the sine qua non of all cases of successful development. But Europe’s long history of exploitative colonialism makes it hard to guess how Asian and African institutions would have evolved in a parallel universe where Europeans came only to trade, not to conquer. Many broad policy issues are distorted when viewed through a lens that focuses only on domestic inequality and ignores global inequality. Thomas Piketty’s Marxian claim that capitalism is failing because domestic inequality is rising has it exactly backwards. When one weights all of the world’s citizens equally, things look very different. In particular, the same forces of globalization that have contributed to stagnant middle-class wages in rich countries have lifted hundreds of millions of people out of poverty elsewhere.

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The media still talk about migrants, whereas Brussels says: “The EU needs a permanent system for sharing the responsibility for large numbers of refugees and asylum seekers among member states.”

EU Plans Refugee Quotas Forcing States To ‘Share’ Burden (Guardian)

The EU’s executive body is to unveil radical new proposals on immigration, imposing migrant quotas on the 28 countries of the union under a distribution “key” system set by Brussels. The plan, which is supported by Germany and will be fiercely resisted by the new Conservative government, will be launched by the European commission on Wednesday in response to migrant boat crisis in the Mediterranean. The bold move by Brussels comes as the EU draws up plans for military attacks in Libya to try to curb the flow of people across the Mediterranean by targeting the trafficking networks. The EU’s top diplomat is to unveil an attempt on Monday to secure a UN mandate for armed action in Libya’s territorial waters.

Britain is drafting the UN security council resolution that would authorise the mission, senior officials in Brussels said. It would come under Italian command, have the participation of about 10 EU countries – including Britain, France, Spain and Italy – and could also drag in Nato, although there are no plans for the initial involvement of the alliance. While there is broad support within the EU for the military plans, the proposals for sharing the immigration burden are highly controversial and divisive. On Sunday night the Home Office said the plans were unacceptable to the UK, putting Cameron on a collision course with German chancellor Angela Merkel and other EU leaders as he begins attempts to renegotiate Britain’s relationship with Brussels ahead of a promised in/out referendum in 2017.

“The UK has a proud history of offering asylum to those who need it most, but we do not believe that a mandatory system of resettlement is the answer. We will oppose any EU commission proposals to introduce a non-voluntary quota,” a spokesman said. The policy document, obtained by the Guardian, demands new and binding rules establishing a quota system of sharing refugees among the member states. The migration agenda declares: “The EU needs a permanent system for sharing the responsibility for large numbers of refugees and asylum seekers among member states.” By the end of the year, Brussels is to table new legislation “for a mandatory and automatically triggered relocation system to distribute those in clear need of international protection within the EU when a mass influx emerges”.

The proposals will lay bare deep divisions between national governments over immigration, with the German chancellor, Angela Merkel, backing the scheme and Britain leading the resistance. Germany and Sweden between them take almost half the asylum seekers in the EU, and Berlin is predicting that the numbers this year could almost double to about 400,000 in Germany, two-thirds of the total number in the EU last year.

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