rate cuts Archives - The Automatic Earth

“‘Maduro had a plane on the tarmac and was ready to leave this morning’, claims @SecPompeo without offering evidence. But as Pompeo admitted just last week, telling lies was (and some may say still is) one of his key job requirements”.

• Maduro Claims Victory Over ‘Deranged’ Coup Attempt (G.)

Nicolás Maduro claimed his troops have thwarted a botched attempt to topple him masterminded by Venezuela’s “coup-mongering far right” and Donald Trump’s deranged imperialist “gang”. In an hour-long address to the nation on Tuesday night – his first since the pre-dawn uprising began – Maduro accused opposition leader Juan Guaidó and his political mentor Leopoldo López of seeking to spark an armed confrontation that might be used as a pretext for a foreign military intervention. However, “loyal and obedient” members of Venezuela’s Bolivarian armed forces had put down the mutiny within hours of it starting shortly after 4am, Maduro claimed, in direct contradiction to Guaidó’s earlier remark that the president no longer had military backing.

By noon there only remained a small group of plotters who had chosen “the path of betrayal … [and] handed their souls over to the coup-mongering far right”. “They failed in their plan. They failed in their call, because the people of Venezuela want peace,” Maduro said, surrounded by Venezuela’s military and political elite. “We will continue to emerge victorious … in the months and years ahead. I have no doubt about it.” Maduro said the plotters would “not go unpunished” and said they would face criminal prosecutions “for the serious crimes that have been committed against the constitution, the rule of law and the right to peace”.

[..] Maduro called Tuesday’s “coup-mongering adventure” part of a US-backed plot to destroy the Bolivarian revolution he inherited after Hugo Chávez’s death in 2013. “I truly believe … that the United States of America has never had a government as deranged as this one,” he said, calling Guaidó and his team “useful idiots” of the empire. He also scotched claims from the US secretary of state, Mike Pompeo, that he had been preparing to flee Venezuela for Cuba on Tuesday morning, until he was told to stay put by his Russian backers. “Señor Pompeo, please,” Maduro said.

Propaganda works.

• Zero Percent of Elite Commentators Oppose Regime Change in Venezuela (FAIR)

A FAIR survey of US opinion journalism on Venezuela found no voices in elite corporate media that opposed regime change in that country. Over a three-month period (1/15/19–4/15/19), zero opinion pieces in the New York Times and Washington Post took an anti–regime change or pro-Maduro/Chavista position. Not a single commentator on the big three Sunday morning talkshows or PBS NewsHour came out against President Nicolás Maduro stepping down from the Venezuelan government. Of the 76 total articles, opinion videos or TV commentator segments that centered on or gave more than passing attention to Venezuela, 54 (72 percent) expressed explicit support for the Maduro administration’s ouster.

Eleven (14 percent) were ambiguous, but were only classified as such for lack of explicit language. Reading between the lines, most of these were clearly also pro–regime change. Another 11 (14 percent) took no position, but many similarly offered ideological ammo for those in support. The Times published 22 pro–regime change commentaries, three ambiguous and five without a position. The Post also spared no space for the pro-Chavista camp: 22 of its articles expressed support for the end to Maduro’s administration, eight were ambiguous and four took no position. Of the 12 TV opinions surveyed, 10 were pro-regime change and two took no position.

[..] This comes despite the existence of millions of Venezuelans who support Maduro—who was democratically elected twice by the same electoral system that won Juan Guaidó his seat in the National Assembly—and oppose US/foreign intervention. FAIR (2/20/19) has pointed out corporate media’s willful erasure of vast improvements to Venezuelan life under Chavismo, particularly for the oppressed poor, black, indigenous and mestizo populations. FAIR has also noted the lack of discussion of US-imposed sanctions, which have killed at least 40,000 Venezuelans between 2017–18 alone, and continue to devastate the Venezuelan economy.

Mueller worried about media coverage.

“House Democrats, who have expressed distrust in the attorney general, are set to vote on Wednesday to allow House Judiciary Committee lawyers to question Barr at Thursday’s hearing.”

• About That Letter That Mueller Wrote To Barr… (ZH)

In what the WaPo breathlessly reports late on Tuesday was a rebuke and “complaint” to Attorney General William Barr, special counsel Robert Mueller sent a letter to the AG in late March, just days after Barr sent out his summary to Congress, in which Mueller stated that Barr’s 4-page summary to Congress on the sweeping Russia investigation failed to “fully capture the context, nature, and substance” of Mueller’s work and conclusions, citing a copy of the letter it had obtained using its trusted deep intel sources. Pouring more fuel on the fire, the always pithy Axios adds that “this revelation about Mueller’s dissatisfaction with the characterization of his report will likely escalate the growing rift over Barr’s handling of the special counsel’s investigation.

[..] Or maybe not, and perhaps the WaPo/NYT report is not “so bad” if one actually reads it, because once the breathless WaPo finally does come up for air, we get to paragraph 13 – a point by which most readers have turned out – to read the following real punchline in the WaPo report: “When Barr pressed Mueller on whether he thought Barr’s memo to Congress was inaccurate, Mueller said he did not…” So, Mueller felt there was confusion… but he did not think the memo was inaccurate. Wait, what’s going on here and how is this even a story? Well, if we read the rest of the above sentence, we find the true object of Mueller’s “complaint”: “[Mueller] felt that the media coverage of it was misinterpreting the investigation, officials said.”

Which means that, as the WaPo itself reports, what Mueller was really angry with was the coverage of his report by media such as… the WaPo and the NYT?? The irony, it burns. [..] throughout a subsequent 15 minutes telephone conversation between the special counsel and the attorney general, Mueller’s main worry was “that the public was not getting an accurate understanding of the obstruction investigation.” This goes back to what Mueller’s letter requested: “that Barr release the 448-page report’s introductions and executive summaries, and made some initial suggested redactions for doing so, according to Justice Department officials,” the WaPo writes. What happened then? A few weeks later Barr did just that..

[..] tomorrow Barr is scheduled to testify on Wednesday before the Senate Judiciary Committee about the investigation, and the entire article is meant to focus on the headlines of the WaPo (and NYT) article, and certainly not on paragraph 13 which, not only refutes the prevailing tone that Barr did something wrong, but in fact exonerates him. But that won’t have any impact on tomorrow’s hearing which is now assured to be a complete kangaroo court.

FISAgate. Get ready.

• The Real ‘Bombshells’ Are About to Hit Their Targets (Kelly)

In the next several weeks, Inspector General Michael Horowitz is expected to issue his summation of the potential abuse of the Foreign Intelligence Surveillance Act by top officials in the Obama Administration and holdovers in the early Trump Administration who were overseeing the investigation of Donald Trump’s presidential campaign. And the perpetrators of the so-called FISAgate scandal now are scrambling for cover as the bad news looms. Horowitz announced last March that his office would examine the Justice Department’s conduct “in applications filed with the U.S. Foreign Intelligence Surveillance Court (FISC) relating to a certain U.S. person.” That U.S. person is Trump campaign associate Carter Page.

In October 2016, just two weeks before the presidential election, the Justice Department submitted an application to the FISC seeking authorization to wiretap Page. The court filing accused Page, a Naval Academy graduate and unpaid campaign advisor, of being an agent of Russia. The application cited the infamous Steele dossier—unsubstantiated political propaganda that had been funded by the Hillary Clinton campaign and Democratic National Committee—as its primary source of evidence. But the specific political origin of the dossier intentionally was omitted in the court filing. (Robert Mueller similarly tap danced around the role of Fusion GPS, the political consulting firm that hired Christopher Steele to create the dossier. Mueller never mentioned the name “Fusion GPS” in the 448-page document, referring to it only vaguely as “the firm that produced the Steele reporting.”)

Former FBI Director James Comey and former Deputy Attorney General Sally Yates signed the original FISA application. It was renewed three times; subsequent signers included former acting FBI Director Andrew McCabe and Deputy Attorney General Rod Rosenstein. If there’s one document that represents the malevolence, chicanery and arrogance of the original Trump-Russia collusion fraudsters, it’s the Page FISA application. But—to borrow a favorite term of the collusion truthers—the “walls are closing in” on the FISA abusers.

Senator Rand Paul: “Subpoena Clapper & Brennan! Demand they answer whether they leaked classified information to the Washington Post. Examine their call records and lock them up if evidence proves them to be the leakers.”

• Why Are Clapper and Brennan Not in Jail?

The clearest of all the laws concerning U.S. intelligence is Section 798, 18 U.S. Code—widely known in the Intelligence Community as “the Comint Statute,” or “the 10 and 10.” Unlike other laws, this is a “simple liability” law. Motivation, context, identity, matter not at all. You violate it, you are guilty and are punished accordingly.

Here it is: (a) Whoever knowingly and willfully communicates, furnishes, transmits, or otherwise makes available to an unauthorized person, . . . any classified information— (1) concerning the nature, preparation, or use of any code, cipher, or cryptographic system of the United States or any foreign government; or (2) concerning the design, construction, use, maintenance, or repair of any device, apparatus, or appliance used or prepared or planned for use by the United States …or (3) concerning the communication intelligence activities of the United States or any foreign government; or (4) obtained by the processes of communication intelligence . . . Shall be fined under this title or imprisoned not more than ten years, or both.

On December 9 and 10, 2016, the New York Times and the Washington Post independently reported that anonymous senior intelligence officials had told them that, based on intercepted communications, the intelligence agencies agreed that Russia had hacked the Democratic National Committee to help Donald Trump win the election. Their evidence was the fact of their access to U.S communications intelligence. A flood of subsequent stories also cited allegations by “senior intelligence officials” that “intercepted communications” and “intercepted calls” showed that “members of Donald J. Trump’s 2016 presidential campaign and other Trump associates had repeated contacts with senior Russian intelligence officials in the year before the election.” Incontrovertibly, the officials who gave these stories to the Times and Post violated the Comint Statute, and are subject to the “10 and 10” for each count.

$2.5 million every single day for two years. That’s $1.9 billion.

• Wall Street Puts Nearly $2 Billion in American Politics in 2016-18 Cycle

Wall Street poured at least $1.9 billion into the political process, the largest-ever amount for a non-presidential year, according to a new report by Americans for Financial Reform. This sum outstrips the total of $1.4 billion, in the 2013-14 election cycle, by 36 percent. The figure, which includes contributions to campaign committees and leadership PACs ($922 million) and lobbying expenditures ($957 million), reflects a massive rush of pro-industry nominees and legislation over the last two years, at a time when the biggest banks made $100 billion in profits for the first time. Industry subsequently spent heavily to influence what became one of the hardest-fought mid-term campaigns in decades.

“The last election cycle demonstrated yet again that Wall Street political spending produces policies that will do lasting financial damage to most Americans, including massive tax cuts for big banks, fewer consumer and investor protections, and other policies that that drive inequality and economic vulnerability,” said Lisa Donner, executive director, Americans for Financial Reform. “Year after year, big money in politics helps Wall Street rig the system in its own favor, and against the rest of us, and insulate itself from accountability, even though voters across party lines oppose so many of the policies it seeks.”

The 63-page report, “Wall Street Money in Washington,” draws on a special data set compiled by the Center for Responsive Politics for AFR in order to provide a more precise look at financial services industry spending. The set excludes spending by health insurers, who work to influence a different group of issues than, for example, banks. As the data does not include “dark money” that goes mostly unreported, the actual sums of Wall Street spending are surely much higher.

So Apple buys back another $75 billion and shares rise 5%. But of course.

• iPhone Sales Fall 17% In First Quarter (G.)

Apple’s iPhone sales fell 17% in the first three months of the year as the company’s flagship product continued to struggle. The tech company reported revenues of $31.05bn in iPhone revenues for the quarter, the majority of the $58.bn in revenues Apple brought in over the three months. The news was less gloomy than expected and Apple’s shares spiked 5% in after hours trading as Apple announced it was buying back another $75bn of its shares. The company made a profit of $11.6bn – ahead of expectations. But this quarter marked another quarterly decline in profit and revenue as the company struggled to move beyond the iPhone. In January Apple reported its first decline in revenues and profits in over a decade as slowing sales of iPhones and an economic slowdown in China took their toll.

Those results came after chief executive Tim Cook shocked investors by issuing Apple’s first profits warning since 2002 citing “the magnitude of the economic deceleration, particularly in greater China.” The company has stopped reporting unit sales of iPhones – leaving analysts searching other sources of data for their estimates. Most don’t expect a recovery in sales until the next generation of phones, using the super-fast 5G network, are launched, likely to be in 2020. In the meantime Apple is repositioning itself as a services and software company as well as the manufacturer of hardware. “Investors are slowly shifting their focus away from the iPhone cycle and valuing the company more based on the ecosystem of hardware, software, and services, but it will take several years for this to become consensus,” Gene Munster, managing partner of Loup Ventures, wrote in a blog post this week.

Why? Maybe prices are far too high. Why would you want to keep them that way?

• Australia House Prices Continue To Fall, Clearing Way For Rate Cut (SMH)

The national property market is enduring its biggest fall in values since the global financial crisis, being led down by double-digit drops in Sydney and Melbourne. New analysis by CoreLogic shows house values in Sydney dropped 0.8 per cent in April to be down by 11.8 per cent over the past 12 months. The situation is worse in Melbourne where values fell by 0.7 per cent last month to be down 12.6 per cent over the past year. Overall dwelling values in Sydney dropped by 0.7 per cent to be 10.9 per cent lower over the year. Since their peak in September 2017, Sydney dwelling values have fallen by 14.5 per cent.

In Melbourne, dwelling values dropped by 2.6 per cent to be 10 per cent down over the past 12 months. They have fallen by 10.9 per cent since their peak. National dwelling values were down by 0.5 per cent in the month to be down by 7.2 per cent on an annual basis, the largest drop since the 12 months to February 2009. Every capital city except Canberra suffered a fall in house prices last month with Hobart, which had been the nation’s strongest market, seeing a 1.2 per cent drop in April. Canberra, where values lifted last month, and Hobart are the only two capitals where prices are still growing above the inflation rate on an annual basis.

Subsidies “R” Us.

• Tesla Filing Shows Results Were Goosed By A Surge In Credits (LAT)

Tesla’s financial results released last week didn’t mention that the automaker’s revenue included $200 million collected from regulatory credits. When Chief Executive Elon Musk answered questions from analysts, he didn’t point that out, either. The number was buried in the official government filing known as Form 10-Q that Tesla filed Monday with the Securities and Exchange Commission. Without the revenue spike – which is unlikely to be repeated, analysts say – the company’s first-quarter loss would have been much deeper than the $702 million that Tesla reported. Gross margins on Tesla’s cars, a key measure of manufacturing profitability and efficiency, would have taken a significant hit. Bernstein analyst Toni Sacconaghi’s reaction? “Egad,” he said in a note to investors.

Tesla’s shares fell 1.2% to $238.69 on Tuesday. The $235.14 closing price Friday was its lowest in more than two years. The new data add to Tesla’s already bleak financial picture. The $702-million loss followed a $139-million profit in the previous quarter. Sales fell sharply. Automotive revenue plunged 41%, to $3.7 billion from $6.3 billion in the previous quarter, as vehicle deliveries dropped to 63,000 from 90,700 the previous quarter. Operating cash flow turned negative — a net $640 million going out the door over the three months compared to a positive $1.23 billion in the previous period. Cash on hand dropped from $3.69 billion at the end of last quarter to $2.2 billion, including $920 million to pay off convertible bonds.

“.. they replied to me and my lawyers that they had destroyed the emails, even though the case is still ongoing, very high-profile and controversial.”

• Julian Assange’s Confinement And Arrest Are A Scandal (Maurizi)

In the summer of 2015, when Julian Assange had already spent three years inside the embassy, I decided it was important to access the full documentation on his case to try to reconstruct it using factual information. It was at that point that I filed my comprehensive FOIA request on the Julian Assange and WikiLeaks case in four jurisdictions. I ran up against a real rubber wall, one so persistent that have been forced to sue the Swedish and British authorities. The documents I have managed to obtain after a lengthy FOIA litigation, which is still ongoing, provide indisputable evidence of the UK’s role in helping to create the legal and diplomatic quagmire which has kept Julian Assange arbitrarily detained since 2010, as established by the United Nations Working Group on Arbitrary Detention (UNWGAD.)

It was the UK Crown Prosecution Service which advised the Swedish prosecutors against the only judicial strategy that could have brought the Swedish rape investigation to a quick closure: questioning Assange in London, rather than trying to extradite him to Stockholm. It was the Crown Prosecution Service which tried to dissuade the Swedish prosecutors from dropping the case in 2013. Why did the Crown Prosecution Service act this way? And why did the Crown Prosecution Service write to their Swedish counterpart: “Please do not think that the case is being dealt with as just another extradition request”?

When I tried to dig into these facts, I discovered crucial gaps in the Crown Prosecution Service’s documents and asked the Service to provide an explanation for them. Their answer was rather incredible: they replied to me and my lawyers that they had destroyed the emails, even though the case is still ongoing, very high-profile and controversial. The Crown Prosecution Service which destroyed the records is the very same agency in charge of handling the extradition request from the United States, as well as from Sweden, if the Swedish prosecutors reopen the case before the statute of limitations on the rape allegations expires. Will anyone demand transparency and accountability from the Crown Prosecution Service in their handling of the Assange case from the very beginning?

“It takes two to speak the truth–one to speak and one to hear.”

• Extradition of Julian Assange Threatens Us All (VIPS)

Retaliation against Julian Assange over the past decade plus replicates a pattern of ruthless political retaliationagainst whistleblowers, in particular those who reveal truths hidden by illegal secrecy. U.S. law prohibits classifying information “in order to conceal inefficiency, violations of law, or administrative error; to prevent embarrassmentto a person, organization, or agency.” Whether U.S. authorities successfully prosecute Assange, accept a desperate plea deal or keep him tied up with endless litigation, they will succeed in sending the same chilling message to all journalists that they send to potential whistleblowers: Do not embarrass us or we’ll punish you—somehow, someday, however long it takes.

In that respect, one could say damage to journalism already has been done but the battle is not over. This extension of a whistleblower reprisal regime onto a publisher of disclosures poses an existential threat to all journalists and to the right of all people to speak and hear important truths. The U.S. indictment of Julian Assange tests our ability to perceive a direct threat to free speech, and tests our will to oppose that threat.Without freedom of press and the right and willingness to publish, whistleblowers even disclosing issues of grave, life and death public safety, will be like a tree falling in the forest with no one to hear.

The great American writer Henry David Thoreau wrote, “It takes two to speak the truth–one to speak and one to hear.” Today, it takes three to speak the truth–one to speak, one to hear, and one to defend the first two in court. If the U.S. Government has its way, there will be no defense, no truth.

Real title: “Canada FURY after The Simpsons MOCKS Justin Trudeau amid scandal – ‘COMPLETE disrespect’”

I don’t know what to think of this. You decide. Onion? It’s actually the Express in the UK.

• Canadian Threat Level At America Raised From “Miffed” To “Peeved” (Exp.)

Viewers were left disgusted after the word “Newfie” was used in the episode titled ‘D’Oh Canada’. The term is decades old and is considered an offensive, derogatory term for people in Newfoundland and Labrador. According to CTV News, it is commonly used to imply someone is stupid or foolish. The country’s Prime Minister Justin Trudeau also appeared in the episode. During the episode, which aired on Sunday night, the Simpsons family travel to Niagara Falls. Somehow Lisa Simpson ends up falling over the famous waterfall, which separates the US and Canada. In the controversial scene, Lisa stands next to some Canadian youngsters and says: “I’m sure you treat all people equally.”

One says: “Except the Québécois,” before others add, “and the Newfies. “Stupid Newfies.” The scene then cuts to Springfield youngster Ralph Wiggum who says “I’m a Newfie” before clubbing the head of a stuffed baby seal. Twitter erupted with fury following the show’s airing. One said: “I can take a joke. “When, however, it is complete disrespect disguised as a joke, I take exception.” Some also criticised the show for targeting seal hunters. The Simpsons has a long and often contentious past. Most recently the show was condemned for its portrayal of Apu Nahasapeemapetilon, who many now see as racist stereotyping.

On and on we go.

• Climate Crisis Facing Australian Rainforests Likened To Coral Bleaching (SMH)

Animals in Australia’s globally renowned wet tropics are on the brink of extinction after the hottest summer on record, according to official advice that equates the scale of the crisis to coral bleaching on the Great Barrier Reef. The extraordinary warning relates to the lush green coastal fringe spanning Townsville, Cairns and Cooktown in Queensland’s north – the Earth’s oldest rainforest and a World Heritage-listed tourist drawcard. A statement from the board of the Wet Tropics Management Authority on Tuesday said more than half of animal species endemic to the area may be extinct within decades. It called for strong global action to reduce greenhouse gas emissions and protect the ancient area for future generations.

The climate change policies of the major parties are under the microscope during the federal election campaign, as Labor and the Coalition pledge starkly different action to address the crisis. The Queensland government authority says “concerning new evidence has shown an accelerating decline” in the wet tropics’ unique rainforest animals. “Following the hottest summer ever recorded, some of the key species for which the Wet Tropics World Heritage Area was listed are at imminent risk of extinction,” the statement said. [..] Modelling has previously predicted that more than half of the area’s endemic species may be extinct by the end of this century. However the latest findings by James Cook University biodiversity professor Steve Williams suggested “these extinctions are happening even sooner”, the statement said.

Debt Rattle May 22 2015

May 222015

May 22, 2015 Posted by Raúl Ilargi Meijer at 10:13 am Finance Tagged with: Greece, Growth, Italy, metablic syndrome, oil, pensions, rate cuts, stocks, Ukraine, unsold food 3 Responses »

Harris&Ewing Oil for salads 1918

• 1 in 3 Americans Have Metabolic Syndrome (LiveScience)

• France To Force Big Supermarkets To Give Away Unsold Food To Charity (AFP)

• ECB Claims Austerity “Complements” QE (Zero Hedge)

• Now The Bank Of England Needs To Deliver QE For The People (Guardian)

• 572 Rate Cuts Since 2008, One Every Three Trading Days (Zero Hedge)

• David Stockman: The Morning After Will Be Nasty (CNBC)

• There’s A Simple Way To Make Sure Bankers Don’t Rig Markets Again (Guardian)

• Hanergy-Goldin’s Wild Rides are Nothing Next to Shenzhen Stocks (Bloomberg)

• Draghi: Growth Is ‘Too Low Everywhere’ In Europe (AP)

• EU Demands Greek Banks Revise Their Restructuring Plans (Kathimerini)

• Greece Submerges as Crisis Fallout Worse Than Emerging Markets (Bloomberg)

• Fight To Save Greek Pension Takes Centre Stage In Brussels, Athens (Guardian)

• The Big Italian Pension Fight (Reuters)

• Housing Crisis Will Halve Number Of Young Homeowners In Five Years (Guardian)

• Saudi Kingdom Built On Oil Foresees Fossil Fuel Phase-Out This Century (FT)

• Bank of Japan Keeps Massive Monetary Stimulus Intact (CNBC)

• Dark Days For Western Australian Property Market (NewDaily)

• Washington Asks Athens To Back Anti-Russia Sanctions (RT)

• Ukraine Laws Ban Sympathy For Communism, Honor Nazi Collaborators (Guardian)

• Washington Throws in the Towel on Ukraine, Shifts to ‘Plan B’ (Sputnik)

Say goodbye to your health care system. And your life expectancy.

• 1 in 3 Americans Have Metabolic Syndrome (LiveScience)

More than a third of adults in the U.S. have a condition called “metabolic syndrome,” which involves a combination of risk factors such as high blood pressure, diabetes and obesity, according to a new study. In the study, researchers looked at data from 2011 and 2012 and found that about 35% of U.S. adults had metabolic syndrome (also known as Syndrome X). The health conditions that are the components of metabolic syndrome may contribute to the development of cardiovascular disease and even premature death, the researchers said. “That’s a scary %age — that a third of adults have it,” said study author Dr. Robert J. Wong, of the Alameda Health System-Highland Hospital in Oakland, California.

Although the researchers knew that obesity affects more than a third of adults in the U.S., Wong said that before the new results, he thought that the%age of people with metabolic syndrome “would be a little bit less.” To have metabolic syndrome, a person must have at least three of the five conditions that are considered to be “metabolic risk factors,” according to the National Institutes of Health. The five conditions are: a large waistline, a high level of triglycerides (a type of fat found in the blood), a low level of “good” HDL cholesterol, high blood pressure and a high level of blood sugar after fasting.

In the study, the researchers examined data from the National Health and Nutrition Examination Survey collected between 2003 and 2012. In the survey, data are collected from not only interviews with the participants, but also physical exams. The researchers also found that the prevalence of the metabolic syndrome increased with age. They found that 47% of people ages 60 and older had metabolic syndrome, compared with 18% of people ages 20 to 39. Among people ages 60 and older, more than 50% of women, and more than 50% of Hispanics, had the syndrome.

Let’s make this an international initiative.

• France To Force Big Supermarkets To Give Away Unsold Food To Charity (AFP)

In a rare show of unity France’s parliament voted unanimously Thursday to ban food waste in big supermarkets, notably by outlawing the destruction of unsold food products. “It’s scandalous to see bleach being poured into supermarket dustbins along with edible foods,” said Socialist member of parliament Guillaume Garot who sponsored the bill. Under the new legislation, supermarkets will have to take measures to prevent food waste and will be forced to donate any unsold but still edible food goods to charity or for use as animal feed or farming compost. All large-sized supermarkets will have to sign contracts with a charity group to facilitate food donations. French people throw away between 20kg to 30kg (44 to 66 pounds) of food per person per year costing an estimated €12bn to €20bn ($13-22bn) annually. The government is hoping to slice food waste in half by 2025.

In fact, it does. QE makes the rich richer, austerity makes the poor poorer.

• ECB Claims Austerity “Complements” QE (Zero Hedge)

The ECB’s move to front-load asset purchases effectively means that QE will be expanded in months when net supply is positive and tapered when negative, which underscores a feature of PSPP that sets it apart from QE in the US and Japan: Mario Draghi is buying at a time when European governments have been cornered into an austerity fixation by the troika, meaning in many cases, monthly asset purchase targets will be difficult to hit owing lackluster supply. This of course highlights something rather absurd about the ECB’s asset purchase program specifically, and about Brussels’ stance on fiscal discipline more generally.

Namely, there’s something quite contradictory about telling governments to tighten their belts while promising to buy any and every piece of paper their treasury departments care to issue. In fact, it’s probably fair to say that a €1.1 trillion QE program simply cannot peacefully coexist with a strict, currency bloc-wide austerity policy. [..] In other words, the ECB’s announcement in January has made it easier for EMU governments to borrow (the opposite of fiscal discipline), recent bond market turmoil notwithstanding. But the ECB is willfully ignorant (at least we hope it’s willful, although with central bankers, it’s hard to say what they might or might not understand) of the fact that its policies run counter to notions of fiscal restraint:

At the same time, a strong signal needed to be sent to euro area governments urging them to press ahead with structural reforms and to take measures to improve the business environment. Only with such complementary action could the full benefits of the monetary policy measures be reaped. Swift and effective implementation of appropriate reforms in the euro area would not only lead to higher sustainable growth in the medium to long term but also raise expectations of permanently higher incomes and encourage households to expand consumption …

It doesn’t get much more ridiculous than that. Coeure has just called fiscal reform “complementary” to a €1.1 trillion government bond buying program. But these two things aren’t complimentary at all, a fact which is on full display in Germany where the government does not need to borrow money, meaning that unless Bunds can be purchased in the secondary market, QE simply can’t be implemented in full under the capital key.

“..to increase consumption by 1% of GDP, you would need a transfer of 3% of GDP. UK QE currently stands at about 20% of annual GDP.”

• Now The Bank Of England Needs To Deliver QE For The People (Guardian)

Government policy is based upon a belief that now the crisis is over, the animal spirits of the private sector will awaken and interest rates gradually normalise. But this is policy-making based on hope. A genuinely responsible government needs a contingency plan in case hope fails us. And if the Bank is to be the leader, as well as the lender of last resort, we should at least give them the tools to do the job. With fiscal policy off the table, and existing monetary tools exhausted, we propose that the government legislates to empower the Bank of England with the ability to make payments directly to the household sector – QE for the people.

With this tool the Bank would be equipped to mitigate any sharp slowdown in the economy, caused by domestic or external factors, such as a deflationary shock from a Chinese or US recession, or a continued slump in the eurozone. The empirical evidence from analogous policies – such as tax rebates in the US – suggests that transfers to the household sector would have a far greater impact on demand at a fraction of the size of QE. Consumers appear to quickly spend between a third and a half of any cash windfalls. So to increase consumption by 1% of GDP, you would need a transfer of 3% of GDP. UK QE currently stands at about 20% of annual GDP. The Bank of England estimates this raised GDP by 3%. Further QE would likely have less effect.

So cash transfers to consumers are a far more effective stimulus than that provided by more QE for a lower spend. Consistent with operational independence of the Bank of England, the size of payments and their timing should be solely under its control, and subject to the inflation target. Parliament needs to equip the Bank with the infrastructure to administer payments, and determine in advance the recipients. An equal payment to all households is likely to be the least controversial rule. It would have an immediate impact on spending and it is transparent and fair – favouring neither borrowers nor savers, rich nor poor, nor one demographic over another.

One more way to spell ‘insane’.

• 572 Rate Cuts Since 2008, One Every Three Trading Days (Zero Hedge)

If sometimes it feels like central banks have “have your back” when trading stocks every single day since the collapse of Lehman, you are wrong. They only have your back every third day, because according to Bank of America there have been a ridiculous 572 rate cuts around the globe since the fall of Lehman, one every three trading days!

Perhaps this explains why with 572 rate cuts in the rear view mirror, which have succeeded in pushing global stock markets to record highs and yet have failed to either unleash the “wealth effect” for the rest of us, to stimulate inflation, or send US GDP into a stable, 3%+ growth trend, in fact culminating with the most recent GDP contraction during the so-called recovery (at least until all negative data is revised positively), one can see why the Fed is just a little worried about breaking a trend that has been working… if only to create the illusion of paper wealth for a select few.

P.S. the number above of course does not account for the $13 trillion in direct liquidity injections central banks have conducted since 2008, which have flowed through directly into both the bond and the stock market, leading to unprecedented bubble in both asset classes.

No doubt about it.

• David Stockman: The Morning After Will Be Nasty (CNBC)

“..the surest way to change incentives is to ensure crooked employees, rather than the banks, face criminal charges”

• There’s A Simple Way To Make Sure Bankers Don’t Rig Markets Again (Guardian)

Life is looking up at Barclays, eh? The share price stands at a 15-month high, the new chairman promises more action, and one of these days the dividend might be lifted. What’s that? There’s a $2.4bn (£1.5bn) fine for rigging currency markets? Pah. It’s ancient history. Besides, it could have been worse. That, roughly speaking, was the market’s reaction to the forex fines and, strange to report, it was logical. Barclays had set aside £2bn and came away with a less bloody nose. The “spare” £500m might yet be absorbed in a related inquiry but Barclays shares rose 3%. Royal Bank of Scotland’s improved 2%. There is a sense that the high watermark for fines has passed. Naturally, the bank’s management treated us to another chorus of regret.

“This demonstrates again the importance of our continuing work to build a values-based culture and strengthen our control environment,” said Barclays chief executive Antony Jenkins. Yes, but the events also demonstrate the inadequacies of past stabs at reform. Remember, the forex fiasco was continuing while banks were being investigated for rigging Libor, a different market. Compliance departments should have been on red alert and traders in a state of fear. Instead, as the New York State Department of Financial Services notes, Barclays was alerted to potential misconduct in forex in mid-2012 but did not begin a full investigation “until the publication of a Bloomberg article in June 2013”.

Barclays and the others, no doubt, will succeed in ensuring there is no repeat in the forex and Libor markets. Indeed, devious traders would be dumb to try their luck in the same spot. But financial markets are deep and wide and those on the front line will continue to have better, and faster, information than their back office policeman. They will also be paid more. Meanwhile, a ban on multi-bank electronic chatrooms removes one venue for collusion and ripping off clients, but wine bars and corridors cannot be abolished. As with all these rigging scandals, there’s a simple conclusion: the surest way to change incentives is to ensure crooked employees, rather than the banks, face criminal charges. The authorities keep saying that’s the plan; it never seems to work out that way.

A surefire way to go broke.

• Hanergy-Goldin’s Wild Rides are Nothing Next to Shenzhen Stocks (Bloomberg)

In Shenzhen, home of China’s hottest stock market, rallies of more than 500% aren’t unusual. What’s become rare are the type of corrections that rocked Hong Kong this week. Hanergy Thin Film Power Group Ltd. and Goldin Financial Holdings Ltd. plunged more than 45% in Hong Kong after surging more than sixfold in the past 12 months. Across the border in Shenzhen, there are 103 stocks that rallied that much in a year, compared with only four in the former British colony. Among the 1,721 stocks on the Shenzhen Composite Index, four have declined this year. The Shenzhen benchmark jumped 12% this week, the most since 2008, as turnover topped trading in both Shanghai and Hong Kong.

Investors have piled into the non-state companies that dominate the Shenzhen bourse after the government pledged to support developing industries, including technology and health care, to shift the economy away from manufacturing and property development. “Hanergy and Goldin are a good reminder for investors in China,” Ronald Wan, chief executive at Partners Capital, said in Hong Kong. “They have a close similarity with many stocks in Shenzhen which have rallied based on speculation rather than fundamentals.” The 103 stocks in the Shenzhen 500% club trade at an average 375 times reported earnings, while their average market capitalization has risen to $3.5 billion, according to data compiled by Bloomberg. Many of them recently sold shares for the first time.

The best performer is Beijing Baofeng, a provider of online movie players, which has jumped 3,822% since its initial public offering two months ago and made its chairman Feng Xin a billionaire. Zhejiang Longsheng Auto Parts, which makes car-seat parts, has climbed about 1,600% in the past year to trade at almost 600 times profits. Wanda Cinema’s 1,047% rally since its January IPO turned it into a $22.1 billion company.

Compared to what?

• Draghi: Growth Is ‘Too Low Everywhere’ In Europe (AP)

ECB head Mario Draghi said that “growth is too low everywhere” in the 19-country eurozone despite a modest recovery. Draghi made the blunt remark as he opened a conference on the unemployment problem plaguing several of the EU member countries that share the euro currency. “Recently, economic conditions have improved somewhat in Europe,” he said at the ECB’s conference on inflation and unemployment in Sintra, Portugal. “But growth is too low everywhere.” He said that inflation was too low — a sign of economic weakness — and that “people in Europe are frustrated by the lack of growth they have witnessed in recent years.” Draghi’s remarks come as the eurozone shows increasing signs of recovery.

The economy grew 0.4% in the first quarter, and growth this year may be strong enough to start whittling down an unemployment rate of 11.3%, economists say. Still, it could take years to achieve a significant reduction in the jobless rate, which remains painfully high in the weaker member countries. Youth unemployment is 50% in both Greece and Spain. The eurozone also faces a challenge in Greece, where the government is struggling to pay its debts despite two rounds of bailout loans from other eurozone countries and the IMF. A default could lead Greece to leave, raising questions about the currency union’s permanence. Draghi’s growth call was echoed by a top U.S. Federal Reserve official at the conference.

Fed Vice Chair Stanley Fischer said the euro’s crisis has led to new institutions such as EU-level banking supervision and procedures to wind up bad banks to spare taxpayers the costs of bailouts. Fischer said the euro appeared to have weathered the current crisis but warned that “in the longer run,” the monetary union “will not survive unless it also brings prosperity to its members.” U.S. officials have pressed Europe to tackle its growth problem. The eurozone remains a key market for many U.S. firms and its health is an important factor for the global economy. The eurozone has struggled with a crisis over too much government and bank debt since Greece reported its deficit was out of control in 2009.

More pressure.

• EU Demands Greek Banks Revise Their Restructuring Plans (Kathimerini)

The European Commission’s Directorate-General for Competition is to ask Greek banks to revise their restructuring plans in light of the rapid deterioration of financial conditions in the country. Kathimerini understands that Brussels technocrats have already expressed to local banking officials their concerns regarding the existing restructuring plans, citing the need for an adjustment to the new macroeconomic data, the deterioration of liquidity conditions, the sharp increase in nonperforming loans (NPLs) and the general delays observed in the implementation of the plans owing to the political and economic uncertainty of the last few months. The forecasts on the course of the Greek economy, on which the stress tests of last year had been based, provided for 2.9% growth this year, rising to 3.7% in 2016. These estimates are now seen as unrealistic and the Commission has already revised its estimate for 2015 to 0.5%.

Banks have also received two more big blows: The dramatic deterioration of liquidity conditions and the spike in bad loans. Since the start of the year, the flight of deposits has exceeded €30 billion and the sole access lenders have to funding is emergency liquidity assistance (ELA). Greek banks have drawn over €120 billion from the Eurosystem, fully reversing the commitments they had made in their restructuring plans to reduce their dependence on ECB liquidity, as lenders have now slumped back to 2012 in dependence terms. On the bad loans’ front, the uncertainty of recent months, the inability of the government to reach an agreement with Greece’s creditors and the cultivation of expectations about more favorable repayment terms have led to an increase in NPLs. From an estimated 34.4% in end-December, the rate of bad loans is estimated to have reached 35% in end-March and has kept growing since.

And that’s supposed to have happened because Greeks all lived beyond their means?

• Greece Submerges as Crisis Fallout Worse Than Emerging Markets (Bloomberg)

The Greek economy risks being more a submerging market than an emerging market. As another round of aid talks between the Mediterranean nation and its creditors ends without a deal, its economy is faring even worse than a string of developing countries which suffered traumas in the last two decades. That leaves Commerzbank AG declaring the country is in little position to pare its debt and that default or a restructuring may loom. “Just as with emerging markets in the past there is a point in time where you need to move on to the next stage rather than being paralyzed,” Simon Quijano-Evans at Commerzbank in London said. “In Greece, we need to think of next steps and be innovative.”

To illustrate Greece’s pain, he published a report this month comparing how the economic fallout from its five-year-old crisis compared with the bouts of turmoil suffered in the last two decades by Turkey, Argentina, Latvia and Thailand. The result illustrates why Commerzbank sees a 50% chance of Greece ultimately leaving the euro area. While Athens has imposed the tightest fiscal squeeze of the five and pushed its budget balance excluding interest payments into surplus from a deficit of about 10% of gross domestic product in 2009, Turkey and Argentina were doing better at the same stage. Even worse, debt of around 175% of GDP is bigger than the 110% at the outset and surpasses those of all the other crisis-hit economies five years on. Turkey managed to cut its debt to 35% from 100% without defaulting.

The amount of lost output is also bigger in Greece than the other economies, all of which had begun to recover by now, and its 25% unemployment is higher. The IMF estimates the Greek economy will be 20% smaller this year than in 2009. To Quijano-Evans, such data reflect how Greece’s economy failed to improve with assistance and austerity. It also demonstrates the challenge of trying to revive an economy without a currency of its own. “Under normal circumstances, if a country adjusts its fiscal backdrop in a meaningful way and allows its exchange rate to float freely, one eventually sees that passing through into a stronger economic picture, coupled with a drop in debt/GDP,” said Quijano-Evans.

“Only a fraction of the 1.4 million people out of work receive unemployment benefits.”

• Fight To Save Greek Pension Takes Centre Stage In Brussels, Athens (Guardian)

Manolis Rallakis likes to take to the streets to fight for his rights. Battles have come and gone – but always been won. “The lost battle is the battle never fought,” says the retired metal worker, his eyes fixed in a steely glare – “and now we are fighting the battle of our lives.” Seated in his lounge adorned with prints on orange walls, the 75-year-old embodies the Greek trade unionist par excellence: Rallakis is general secretary of the federation of the country’s pensioners. His own pension has been cut by a third to €1,100 (£780) since Greece’s debt crisis began. But while some may view that as poor remuneration for 37 years of welding carriages in an Athenian factory, Rallakis counts himself lucky.

“It is enough just to cover the absolute essentials and is more than most,” he says on the day he led a protest march through Athens. “What we want is not only to retain the pensions we now have, but win back everything they stole from us.” Rallakis’s fighting spirit might have gone unnoticed if the row over pensions and the need for reform were not also at the heart of the prolonged standoff between Greece and the international lenders keeping the country afloat. In the five years that debt-stricken Athens has struggled to remain solvent – surviving on rescue loans issued by the EU, the ECB and the IMF – pensioners have disproportionately endured the austerity meted out in return for the bailouts.

Nearly 45% of Greece’s 2.5 million retirees now live on incomes of less than €665 a month – below the poverty line defined by the EU. Over half that number fell below the threshold at the start of the crisis in late 2009. Only a fraction of the 1.4 million people out of work receive unemployment benefits. A statement released by the office of Greece’s deputy prime minister, Yannis Dragasakis, recently declared: “After five years of recession and a ‘war-time’ cumulative loss of 25% of GDP, pensions have become the last social safety net preventing Greek society from completely falling apart. The elderly population is literally feeding the rest of the family.”

In both Italy and Greece, pensions are a safety net for the entire society. Cutting pensions means either having to increase spending elsewhere or condemning your people to misery.

• The Big Italian Pension Fight (Reuters)

Matteo Renzi seems to have won a tricky pension battle. But Italy’s prime minister has only skirmished with the real enemy. Italy has a toxic mix of a generous government-funded pension system, an ageing population and slow GDP growth. The distant future looks all right, thanks to the 2011 Fornero reform, which pushed up the retirement age for most current workers. However, that reform mostly spared existing pensioners, who are a burden on state finances and current workers. The European Commission estimates pension costs at 15.5% of Italian GDP in 2020, the second highest in the euro zone after Greece. In his first 14 months in office, Renzi had stayed away from proposing further reforms.

He was pulled in on April 30, when the constitutional court overturned one part of the Fornero package which did have immediate effect. The restoration of original payments for some high earners could have cost the state €18 billion. That number could have disrupted Rome’s relations with Brussels. It would bring the Italian fiscal deficit to 3.6% of GDP, too high for Italy to qualify for the fiscal leeway the Commission gives to firm reformers. However, Renzi has come back with a €2.2 billion “bonus” to some of the likely claimants. The move is sure to invite litigation, but the government has shrewdly pitched it as progressive and equitable, and so in keeping with the court’s demand. Besides, the court’s verdict was barely passed so a small settlement may be enough to appease the majority.

As for current costs, Renzi is in danger of moving in the wrong direction. He has suggested allowing more early retirements, to open up jobs for the country’s small army of unemployed young people. That shift could push up the state pension obligations even further. Universal pension cuts are always unpopular. But high pension expense drains government spending away from more productive areas, like education, while high worker and employer contributions discourage job creation and encourage black-market activity. Renzi presents himself as a fighter of vested interests and Italy’s gerontocracy. Pension reform is an opportunity to show he means what he says.

Curious to blame it all on shortage, and none on speculation and foreign investors. So more houses are supposed to bring down prices. But is that what Cameron wants? Is it what the banks want?

• Housing Crisis Will Halve Number Of Young Homeowners In Five Years (Guardian)

The number of young adults able to buy homes could fall nearly 50% within five years unless the government addresses the housing shortage, a report has claimed. Over the past decade, home ownership among 25-34-year-olds has dropped by a third, from 1.8m to 1.2m, and analysis by the housing charity Shelter published on Friday suggests that if current trends continue, the number of young homeowners will drop to about 616,600 by the end of this parliament. This would mean that less than 20% in that age group would have made it on to the property ladder, compared with nearly 60% a decade ago. In recent years, soaring house prices and problems with getting mortgages have pushed more young households into the private rented sector.

In 2004, just over 675,000 people aged 25-34 were tenants. However, by 2014, the number was 1.6m. As home ownership becomes increasingly difficult, Shelter said the number of renters could rise to 2.3m by 2020. In addition, it said, a “clipped-wing generation” of young adults living with their parents had emerged. The report followed government figures showing that the number of new homes built last year remained well below the level needed to meet demand. A total of 125,110 homes were built in England in 2014-15, up from 112,400 the previous year, but this is half the rate some experts say is needed. Those stuck in rented accommodation have seen rents rise by 4.6% over the past year, according to figures from letting agents Your Move and Reeds Rains.

The increase, the fastest recorded by the index since November 2010, pushed the average rent in England and Wales to a new high of £774 a month. In London, the average was up 7.8% year-on-year at £1,204. For homeowners and buyers, however, the mortgage price war is continuing to push rates down to record lows, with one leading lender unveiling the UK’s cheapest two-year fixed-rate home loan, priced at 1.07%. The new loan, from Yorkshire building society, trumps a 1.09% deal launched by Co-operative Bank earlier this month. However, the Yorkshire’s mortgage has a £1,369 product fee and is available only to customers able to stump up a hefty 35% deposit. Rachel Springall, at Moneyfacts.co.uk, said the new home loan was “the lowest ever fixed mortgage on record”, adding: “With the rate war ongoing, this is the perfect time for borrowers to secure a low fixed rate.”

Funny. I see a whole different future for Saudi Arabia. Note the Export Land Model: “more than 25% of its total crude production — more than 10m barrels a day — is used domestically”

• Saudi Kingdom Built On Oil Foresees Fossil Fuel Phase-Out This Century (FT)

Saudi Arabia, the world’s largest crude exporter, could phase out the use of fossil fuels by the middle of this century, Ali al-Naimi, the kingdom’s oil minister, said on Thursday. The statement represents a stunning admission by a nation whose wealth, power and outsize influence in the world are predicated on its vast reserves of crude oil. Mr Naimi, whose comments on oil supply routinely move markets, told a conference in Paris on business and climate change: “In Saudi Arabia, we recognise that eventually, one of these days, we are not going to need fossil fuels. I don’t know when, in 2040, 2050 or thereafter.” For that reason, he said, the kingdom planned to become a “global power in solar and wind energy” and could start exporting electricity instead of fossil fuels in coming years.

Many in the energy industry would find his target of a 2040 phase-out too ambitious. Saudi Arabia is the largest consumer of petroleum in the Middle East, and more than 25% of its total crude production — more than 10m barrels a day — is used domestically. A 2012 Citigroup report said that if Saudi oil demand continued to grow at current rates, the country could be a net oil importer by 2030. But while acknowledging that Saudi Arabia would one day stop using oil, gas and coal, Mr Naimi said calls to leave the bulk of the world’s known fossil fuels in the ground to avoid risky levels of climate change needed to be put “in the back of our heads for a while”. “Can you afford that today?” he asked other conference speakers, including British economist, Nick Stern, author of a 2006 UK government report on the economics of climate change. “It may be a great objective but it is going to take a long time.”

Barely breathing.

• Bank of Japan Keeps Massive Monetary Stimulus Intact (CNBC)

The Bank of Japan on Friday kept its massive monetary stimulus program intact, as widely expected, and revised up its assessment of the economy, but analysts remain unconvinced the central bank is done with its easing campaign. In an 8-1 vote, the central bank pledged to increase base money at an annual pace of 80 trillion yen ($660 billion) through purchases of government bonds and risky assets. In a statement, the BOJ maintained that the world’s third-largest economy has continued to recover moderately.

“The (BOJ) economic assessment was more upbeat than at previous meetings. Policymakers no longer see a sluggish recovery in some areas of private consumption, but now judge consumer spending as ‘resilient’ without qualification,” Marcel Thieliant, Japan economist with Capital Economics, wrote in a note. The decision followed the latest growth data from Japan on Wednesday that showed the economy expanding an annualized 2.4% in the first quarter, better than expected and following the 1.5% annualized growth in the fourth quarter. “It came as no surprise that the Bank of Japan left policy settings unchanged today, and the apparent strength in Q1 GDP suggests that additional easing in July is off the table,” said Thieliant.

Still, market watchers say further easing is inevitable down the line with the consumer inflation rate far from the BOJ’s target of 2%. Nationwide consumer inflation rate stood at 0.2% in March. Since embarking on the quantitative easing program in April 2013, the BOJ expanded the program just once, in October last year. “We continue to think that the BoJ will be forced to opt for additional easing into October as the board’s inflation rate forecast is turning out too optimistic. Triggers for additional easing moves will be downshifts in expected inflation rates and material softening of ex-energy CPI,” Hiromichi Shirakawa, managing director of Japan economics at Credit Suisse, wrote in a note.

Crash of all crashes.

• Dark Days For Western Australian Property Market (NewDaily)

Western Australia is facing serious problems. Plunging commodity prices are forcing iron ore mines to shut, mining companies to cut jobs, and tax revenue for the state coffers to plummet. But one of the big casualties in this painful process that hasn’t received a lot of attention is the WA property market. Many investors have been left high and dry by the drop in property values, which is having a flow-on effect in the capital. While property prices march forward in Sydney and Melbourne, it is a very different story on the ground in both Perth and the mining towns where many investment properties now lie empty.

Rental returns in mining towns have dropped by as much as 50%, according to the president of the Real Estate Institute of Western Australia, David Airey, with Karratha and Port Hedland among the biggest losers. Where they once commanded high rents and high sale prices, the towns are now struggling to attract either. “If you borrowed $1 million for a property in Karratha that used to be worth $1.2 million then you might be under water,” Mr Airey says. According to Richard Young, CEO of Perth-based Caporn Young Estate Agents, the situation is dire in some pockets. He recently heard of a house in Port Hedland that was bought a few years ago for $1.2 million and attracted a bid of $320,000 at auction recently. “That was the highest offer they could secure,” Mr Young says.

What’s it worth to you?

• Washington Asks Athens To Back Anti-Russia Sanctions (RT)

Greece has revealed it’s been asked by the US to prolong anti-Russia sanctions. However, Athens stressed Russia is a strategic ally and the ‘sanction war’ is causing it an estimated loss of €4 billion a year. “I was asked to support the prolongation of the sanctions, particularly in connection with Crimea. I explained the Ukrainian issue was very sensitive for Greece as some 300,000 Greeks live in Mariupol and its neighborhood, and they feel safe next to the Orthodox Church, ” Defense Minister Panos Kammenos is cited as saying on the Ministry of National Defense website on Wednesday. Russia is Greece’s ally and a friendly country, our countries have “unbreakable ties” of common religion, and we have economic ties as well, the Minister told Deputy US Defense Secretary Christine Wormuth in Washington.

Greece has lost more than €4 billion ($4.5 billion) as a result of the anti-Russia sanctions, he added. “Annually about 1.5 million Russian tourists visit Greece. We export agricultural products to Russia. I explained that the European Union does not reimburse losses to Greek farmers on these issues,” Kammenos said. Russia and Greece have been improving economic cooperation lately; last month Moscow invited Athens to become the sixth member of the BRICS New Development Bank. Greece said it was interested in the offer. The Greek government agreed a number of strategic deals with Russia during Prime Minister Alexis Tsipras’ visit to Moscow in April, including participation in the Turkish Stream gas pipeline project that will deliver Russian gas to Europe via Greece.

Desperate measures.

• Ukraine Laws Ban Sympathy For Communism, Honor Nazi Collaborators (Guardian)

Two new laws that ban communist symbols while honouring nationalist groups that collaborated with the Nazis have come into effect in Ukraine, raising concerns that Kiev could be stifling free speech and further fragmenting the war-torn country in the rush to break ties with its Soviet past. The first law “on the condemnation of the communist and Nazi totalitarian regimes” forbids both Soviet and Nazi symbols, making something as trivial as selling a USSR souvenir, or singing the Soviet national hymn or the Internationale, punishable by up to five years in prison for an individual and up to 10 years in prison for members of an organisation. It also makes it a criminal offence to deny the “criminal character of the communist totalitarian regime of 1917-1991 in Ukraine” in the media or elsewhere.

The second law recognises controversial nationalist groups – including the Organisation of Ukrainian Nationalists (OUN) and Ukrainian Insurgent Army (UPA) – as “independence fighters” and makes it a criminal offence to question the legitimacy of their actions. While these two groups at different times fought both Soviet and German forces, they also collaborated with the Nazis and took part in ethnic cleansing. One of the authors of the law is the son of UPA leader Roman Shukhevych. Supporters of the laws say they are a way to build a national identity and condemn totalitarianism, but the legislation has been roundly condemned by academics and human rights organisations, as well as Ukrainian activists. While other eastern European countries have also banned communist symbols, Ukraine’s law is more wide-reaching than previous measures.

“..the mess that Obama’s people have created in Ukraine by their coup and subsequent ethnic-cleansing to eliminate the residents of Donbass, will take decades, if ever, to repair..”

• Washington Throws in the Towel on Ukraine, Shifts to ‘Plan B’ (Sputnik)

International media have failed to highlight the ultimate failure of Washington’s policy in Ukraine, investigative historian Eric Zuesse emphasized, referring to remarks by US Secretary of State John Kerry in response to Petro Poroshenko’s oath to retake Crimea and the Donetsk Airport. “I have not had a chance – I have not read the speech. I haven’t seen any context. I have simply heard about it in the course of today [which would be shocking if true]. But if indeed President Poroshenko is advocating an engagement in a forceful effort at this time, we would strongly urge him to think twice not to engage in that kind of activity, that that would put Minsk in serious jeopardy. And we would be very, very concerned about what the consequences of that kind of action at this time may be,” John Kerry said during a press conference in Sochi, as cited by the historian.

Eric Zuesse stressed that the remark has clearly demonstrated that the Obama administration has thrown in the towel on Washington’s original plan for Ukraine, which was purportedly aimed at an all-out military invasion of the eastern regions. Victoria Nuland, who was responsible for the plan since the very beginning, is now sidelined, the expert underscored. According to Eric Zuesse, Obama has sent a clear message through Kerry to Ukrainian President Poroshenko, and indirectly to Nuland’s protégé Prime Minister Yatsenyuk as well as to outright Nazi Dmytro Yarosh, stating: “we’ll back you only as long as you accept that you have failed our military expectations and that we will be stricter with you in the future regarding how you spend our military money.”

So far, the Obama administration has shifted the goalposts and jumped at the opportunity to join the Normandy talks on Ukraine, the expert noted. “Merkel and Hollande thus won. Putin had decidedly won. Obama and the Nazis he had empowered in Ukraine have now, clearly, been defeated,” Eric Zuesse stressed. “But the mess that Obama’s people have created in Ukraine by their coup and subsequent ethnic-cleansing to eliminate the residents of Donbass, will take decades, if ever, to repair,” the expert added bitterly.

Debt Rattle March 13 2015

Mar 132015

March 13, 2015 Posted by Raúl Ilargi Meijer at 11:03 am Finance Tagged with: arctic, currency war, Draghi, ECB, Greece, rate cuts, Shale, wealth 7 Responses »

NPC Hendrick Motor Co., Carroll Avenue, Takoma Park, Maryland 1928

• Rising Stocks, Homes Boost US Household Wealth To Record $83 Trillion (AP)

• Rate Cuts: 24 Countries So Far And There’s More To Come (CNBC)

• Watch Out: China Could Join The Currency War

• The U.S. Has Too Much Oil and Nowhere to Put It (Bloomberg)

• Get Ready for Oil Deals: Shale Is Going on Sale (Bloomberg)

• Daniel Hannan Explains How Democracy Died In Europe (Zero Hedge)

• Draghi Makes Greenspan Look Like A Rank Amateur (Albert Edwards via ZH)

• Tsipras Promises Greece Will Keep Its Word Amid German Spat (Reuters)

• Greece Complains About Schaeuble in Deepening Conflict (Bloomberg)

• ECB Increases Greek ELA Ceiling by €600 Million (Bloomberg)

• Central Bank Stimulus Is Ancient Recipe for Trouble (Bloomberg)

• Tsipras Says Greece Doing Its Part In Eurozone Deal (Reuters)

• Why The Fed Failed Two Of Europe’s Biggest Banks (CNBC)

• How Putin Blocked the US Pivot to Asia (Whitney)

• ‘Claims SU-25 Shot Down MH17 Unsupportable’ (RT)

• Knights Templar Win Heresy Reprieve After 700 Years (Reuters)

• Arctic Melt Brings More Persistent Heat Waves to US, Europe (Bloomberg)

70% minimum (90%?!) of which is entirely virtual.

• Rising Stocks, Homes Boost US Household Wealth To Record $83 Trillion (AP)

Fueled by higher stock and home values, Americans’ net worth reached a record high in the final three months of 2014. Household wealth rose 1.9% during the October-December quarter to nearly $83 trillion, the Federal Reserve said Thursday. Stock and mutual fund portfolios gained $742 billion, while the value of Americans’ homes rose $356 billion. The typical household didn’t benefit much, though. Most of the wealth remains concentrated among richer families. The wealthiest 10% of U.S. households own about 80% of stocks. Still, greater wealth could help lift spending and economic growth. Higher stock and home values can make people feel more financially secure and more willing to spend, and consumer spending fuels about 70% of the economy.

The Fed’s figures aren’t adjusted for population growth or inflation. Household wealth, or net worth, reflects the value of homes, stocks and other assets minus mortgages, credit cards and other debts U.S. corporations are also seeing sharp improvements in their finances, the Fed report showed. Businesses amassed $2 trillion in cash by the end of last year— a record high — up from less than $1.9 trillion three months earlier. Cash-rich corporations could spend more on investments in machinery, computers and other equipment. That would make workers more productive and accelerate economic growth. They could also use some of their cash to raise pay at a time when many employees have been stuck with stagnant wages.

Some economists have criticized publicly traded companies for spending heavily on repurchasing their own shares, which boosts profits and serves shareholders rather than employees. Businesses are also taking advantage of low interest rates by taking on more debt, which typically signals confidence in the economy and future growth. Business debt rose 7.2% in the fourth quarter, the sharpest quarterly increase in more than six years. During the Great Recession, which officially ended in June 2009, Americans’ net worth plummeted as stock and home values sank. Household wealth tumbled to $55 trillion in the first quarter of 2009 from a pre-recession peak of $67.9 trillion. Wealth didn’t surpass that peak until the third quarter of 2012.

Once you get to 124, may be some will wake up.

• Rate Cuts: 24 Countries So Far And There’s More To Come (CNBC)

An interest rate cut from South Korea Thursday takes the number of central banks that have stepped up their monetary easing this year to 24 and that number is likely to rise, analysts say. South Korea’s decision to cut its key rate by 25 basis points to a record low of 1.75% follows a rate cut by Thailand’s central bank on Wednesday and easing by central banks in China, India and Poland since March began. Russia and Malaysia are among the countries that economists say could join the growing list of central banks that have slashed borrowing costs since the start of the year. The main reason for such a flurry of action, they add, is a backdrop of falling or low inflation which is highlighting the need to boost lackluster economic growth.

“I find it interesting that people say that these [rate cuts] are surprises and we heard that when it happened in Australia, when it happened in India, Indonesia and today in Korea,” Joshua Crabb, head of Asian Equities at Old Mutual Global Investors, told CNBC Asia’s “Squawk Box.” “But if we look at inflation, it is coming down dramatically, real rates are high and the economy is weak so it makes a lot of sense that we see these cuts and we will see that continue to happen,” he said. Thanks in part to the sharp fall in oil prices since last June, many economies are facing falling or low inflation rates.

Data on Thursday for instance, showed Spain’s consumer price index rose to 0.2% in February from -1.6% the month before. In Indonesia, annual inflation stood at 6.29% last month, down from 6.96 in January. “Fundamentally, the easing around the world is driven by inflation turning out lower across the board,” Anatoli Annenkov, senior European economist at Societe General, told CNBC. “There is a debate about currency wars, monetary easing to push currencies lower, but fundamentally this is a story about growth and inflation,” he added.

More rate cuts.

• Watch Out: China Could Join The Currency War

Central banks may be spreading deflation by easing monetary policy and weakening their currencies, but the biggest threat is that China will wade into the battlefield, analysts say. “The three trillion dollar question is whether the People’s Bank of China (PBoC) will allow the yuan to depreciate and export their own disinflation to the rest of the world, setting off a series of competitive devaluations in the region,” Nicholas Ferres, investment director at Eastspring Investment said in a note on Friday. Twenty-four central banks have eased monetary policy this year amid slowing economic growth and deflationary pressure as oil prices hover near six-year lows. In February, the PBoC cut the one-year deposit rate by 25 basis points to 5.35%.

For now Chinese authorities continue to keep the yuan in a tight daily trading band against the U.S. dollar; the yuan has lost just 0.9% against the dollar year to date. By contrast, the dollar is up 3.3% again the Korean won and 4.2% against the Singapore dollar. But the euro’s around 12% decline against the greenback so far this year “will likely put more pressure on China to devalue the yuan… [which would] signal that China is joining the currency war,” Bank of America Merrill Lynch and Rates strategist David Woo said in a note published on Monday. “[This is] the biggest tail risk of 2015,” he said.

“Morse and his team of analysts at Citigroup have predicted that sometime this spring, as tanks reach their limits, oil prices will again nosedive, potentially all the way to $20 a barrel.”

• The U.S. Has Too Much Oil and Nowhere to Put It (Bloomberg)

Seven months ago the giant tanks in Cushing, Okla., the largest crude oil storage hub in North America, were three-quarters empty. After spending the last few years brimming with light, sweet crude unlocked by the shale drilling revolution, the tanks held just less than 18 million barrels by late July, down from a high of 52 million in early 2013. New pipelines to refineries along the Gulf Coast had drained Cushing of more than 30 million barrels in less than a year. As quickly as it emptied out, Cushing has filled back up again. Since October, the amount of oil stored there has almost tripled, to more than 51 million barrels. As oil prices have crashed, from more than $100 a barrel last summer to below $50 now, big trading companies are storing their crude in hopes of selling it for higher prices down the road.

With U.S. production continuing to expand, that’s led to the fastest increase in U.S. oil inventories on record. For most of this year, the U.S. has added almost 1 million barrels a day to its stash of crude supplies. As of March 11, nationwide stocks were at 449 million barrels, by far the most ever. Not only are the tanks at Cushing filling up, so are those across much of the U.S. Facilities in the Midwest are about 70% full, while the East Coast is at about 85% capacity. This has some analysts beginning to wonder if the U.S. has enough room to store all its oil. Ed Morse, the global head of commodities research at Citigroup, raised that concern on Feb. 23 at an oil symposium hosted by the Council on Foreign Relations in New York. “The fact of the matter is, we’re running out of storage capacity in the U.S.,” he said.

If oil supplies do overwhelm the ability to store them, the U.S. will likely cut back on imports and finally slow down the pace of its own production, since there won’t be anywhere to put excess supply. Prices could also fall, perhaps by a lot. Morse and his team of analysts at Citigroup have predicted that sometime this spring, as tanks reach their limits, oil prices will again nosedive, potentially all the way to $20 a barrel. With no place to store crude, producers and trading companies would likely have to sell their oil to refineries at discounted prices, which could finally persuade producers to stop pumping. If oil supplies do overwhelm the ability to store them, the U.S. will likely cut back on imports and finally slow down the pace of its own production, since there won’t be anywhere to put excess supply. Prices could also fall, perhaps by a lot. Morse and his team of analysts at Citigroup have predicted that sometime this spring, as tanks reach their limits, oil prices will again nosedive, potentially all the way to $20 a barrel.

“.. the largest producer in North Dakota’s Bakken shale basin put itself up for sale..”

• Get Ready for Oil Deals: Shale Is Going on Sale (Bloomberg)

A decision by Whiting Petroleum, the largest producer in North Dakota’s Bakken shale basin, to put itself up for sale looks to be the first tremor in a potential wave of consolidation as $50-a-barrel prices undercut companies with heavy debt and high costs. For the first time since wildcatters such as Harold Hamm of Continental began extracting significant amounts of oil from shale formations, acquisition prospects from Texas to the Great Plains are looking less expensive. Buyers are ultimately after reserves, the amount of oil a company has in the ground based on its drilling acreage. The value of about 75 shale-focused U.S. producers based on their reserves fell by a median of 25% by the end of 2014 compared to 2013, according to data compiled by Bloomberg.

That’s opening up new opportunities for bigger companies with a better handle on their debt, said William Arnold, a former executive at Shell. “In this market, there are whales and there are fishes, and the whales are well armed,” said Arnold, who also worked as an energy-industry banker and now teaches at Rice University in Houston. “There are some very vulnerable little fishes out there trying to survive any way they can.” Smaller producers with significant debt that depend on higher prices to make money are the most likely early targets for buyers such as Exxon Mobil or Chevron, companies that have bided their time for years as the value of some shale fields soared to $38,000 an acre from $450 just a few years earlier.

The market crash is creating “a consolidation game,” Concho CEO Timothy Leach said on a Feb. 26 call with investors. “It’s harder to be a small company today than it has been in the past.” In the pre-plunge days, acquisitions were dominated by foreign buyers overpaying to get a seat at the shale boom table. That buying frenzy was followed by an explosion in asset sales as companies pieced together their ideal drilling portfolios. Joint ventures were a popular way of funding what seemed like an unstoppable drilling machine.

Europe now exists to protect us from democracy…

• Daniel Hannan Explains How Democracy Died In Europe (Zero Hedge)

With Greece on the edge of being kicked out of the Eurozone , either voluntarily or otherwise, with an anti-austerity party on the verge of taking over the reins of power in Spain, with Beppe Grillo waiting in the corridors for his chance to pounce in Italy and with Marine le Pen and her nationalist party on the verge of becoming the biggest shocker of Europe over the coming years, here, according to Daniel Hannan, is what killed democracy in Europe. Europe itself. Here are the punchlines, which are all based documented fact:

We were told the Euro would be an antidote to extremism, that it would make countries get on better, and make moderate politics more mainstream. Well, how’s that working out for you. Look at the elections in Greece – a Trotskyist party came first, a Nazi party came third. And as for the national animosities read the way the German newspaper now refer to the Greeks and vice versa. Would you say this is soothing or stoking national rivalries in Europe?

But worst of all is the impact on democratic accountability. After the Greek election results came in, the German finance minister said “elections change nothing.” He was talking specifically about Greece but this could be a watchword describing the entire Brussels racket. As Jean Claude Juncker put it the next day, “there can be no democratic choice against the European treaties.” This is the same European Commission that in late 2011 in Italy and Greece engaged in practice in civilian coups, toppling elected prime ministers and replacing them with former technocrats.

As the former president of the European Commission Barroso puts it, “democratic governments are often wrong. If you trust them too much they make bad decisions.” And so we have this syste,min Europe where power is deliberately vested in the hands of people who are invulnerable to public opinion. Being against that shouldn’t make you anti-Europe, it doesn’t make you Euroskeptic, it makes you pro-democracy. What a tragedy that in the country where democracy was born, in the part of the world that evolved this sublime idea, that our rulers should be accountable to the rest of us, in that same country that wonderful idea that laws should not be passed nor taxes raised except by our own representatives, has been abandoned.” Tragedy indeed, and while nobody else is willing to admit it, only a violent overthrow of this unelected group of self-serving oligarchs is the only probably outcome.

Ha!

• Draghi Makes Greenspan Look Like A Rank Amateur (Albert Edwards via ZH)

We have long fulminated against strategists who are unwilling to predict sharp market moves. The violent downmove in the euro over the last few weeks is a case in point. Mario Draghi and the ECB’s manipulation of asset prices makes Greenspan’s Fed look like a rank amateur. More shocking though than the plunge in the euro, and more shocking even that 25% of sovereign eurozone bonds now trade in negative territory, is what has happened to eurozone equity valuations. For, as we approach the sixth anniversary of the US cyclical bull market (a post-war record), the PE expansion of eurozone equities is simply off the scale. History suggests this will end very badly indeed. Ask Alan!

I promise to keep insulting you…

• Tsipras Promises Greece Will Keep Its Word Amid German Spat (Reuters)

Prime Minister Alexis Tsipras tried to reassure euro zone partners on Thursday that Greece would stick to an extended bailout agreement with its international creditors even as a war of words rumbled on between Athens and Berlin. Tsipras used a visit to the Paris-based Organization for Economic Cooperation and Development, an inter-governmental think-tank, to make his case for a long-term restructuring of Greece’s debt while promising to implement agreed reforms. “There is no reason for concern… even if there is no timely disbursement of a (loan) tranche, Greece will meet its obligations,” he told reporters.

“We are here in order for the OECD to put its stamp on the reforms that the Greek government wants to push on with and I believe that this stamp in our passport will be very significant to build mutual trust with our lenders.” His soothing words contrasted to the tone of recrimination between Greece and Germany over austerity, relations between their finance ministers and demands for reparations over the World War Two Nazi occupation of Greece. Greece submitted a formal protest to the German Foreign Ministry, accusing Finance Minister Wolfgang Schaeuble of having insulted his Greek counterpart, Yanis Varoufakis, further eroding a relationship that has been strained by Berlin’s tough stance on the Greek debt crisis.

Schaeuble denied having called Varoufakis “foolishly naive”, as reported by some Greek media, telling Reuters it was “nonsense” to say he had insulted the Greek minister. Greek Foreign Ministry spokesman Constantinos Koutras told Reuters the complaint was about the general tone of Schaeuble’s remarks, questioning data presented by Greece and doubting its willingness to meet its commitments. Recounting a private meeting with Varoufakis this week, Schaeuble told reporters on Tuesday in Brussels: “He said to me ‘The media are dreadful’. So I said: ‘Yes but the first impression you made on us was that you were stronger at communication that on substance. That may have been a mistake’.”

One for the bleachers.

• Greece Complains About Schaeuble in Deepening Conflict (Bloomberg)

Greece’s war of words with Germany deepened as Greece renewed demands for war reparations and formally complained about Finance Minister Wolfgang Schaeuble. Germany and Greece confirmed Thursday that the Greek ambassador in Berlin made an official protest late Tuesday to the German Foreign Ministry over comments made by Schaeuble. Schaeuble and his Greek counterpart Yanis Varoufakis have traded barbs in recent weeks, with Schaeuble suggesting on Tuesday that Varoufakis needed to look more closely at an agreement Greece signed in February and commenting on his fellow minister’s communication strategy. Schaeuble said Thursday that any suggestion he had insulted Varoufakis was “absurd.”

Tensions have risen between Greece and Germany since the election of Prime Minister Alexis Tsipras on Jan. 25 on a platform on ending the austerity his Syriza party blames Chancellor Angela Merkel for pushing. Germany is the biggest country contributor to Greece’s €240 billion twin bailouts and the chief proponent of budget cuts and reforms measures in return. The latest spat centers on Tuesday’s press conference in Brussels, when Schaeuble referred to a Feb. 20 declaration that Varoufakis had signed, saying that “he just has to read it. I’m willing to lend him my copy if need be.” He also said he talked with Varoufakis about the latter’s treatment at the hands of the media, saying that he had told his Greek counterpart: “In terms of communication, you made a stronger impression on us than in substance. But that may well have been a false impression. That he should suddenly be naive in terms of communication, I told him, that is quite new to me. But you live and learn.”

According to Deutsche Presse-Agentur, Schaeuble was cited in some Greek media as calling Varoufakis “foolishly naive” in his handling of the press. Greek Foreign Ministry spokesman Konstantinos Koutras rejected suggestions that the government’s complaint had been based on a “wrong translation” of Schaeuble’s remarks. “On the contrary, the reason for this complaint to the government of a friend, counterpart and ally country was based on the essence of what Mr. Schaeuble said,” Koutras said in an e-mail.

Hand out.

• ECB Increases Greek ELA Ceiling by €600 Million (Bloomberg)

The European Central Bank increased the maximum Emergency Liquidity Assistance that Greek banks can get from their national central bank by €600 million, according to two people familiar with the decision. The amount matches the request by the Greek central bank, said the people, who asked not to be named because the talks are private. The ECB’s Governing Council held a phone conference on Thursday to set the limit, which policy makers had increased by €500 million to €68.8 billion on March 5. The council is scheduled to review the level again on March 18.

“The ECB is saying you better reach an agreement and you better do as you’re told, or else,” said Gabriel Sterne, head of global macro research at Oxford Economics. “This is an extraordinarily small extension. It seems to say: we’re just going to drip feed you liquidity, no more, no less, just exactly what you need and no breathing space.” Greek banks didn’t absorb all ELA funds available under the previous ceiling and have about €3.5 billion in liquidity left, said a Bank of Greece official, who asked not to be named because the matter is private.

The ECB is reviewing ELA weekly, reflecting concern that banks will use it to finance the Greek government and so violate European Union law. The newly elected administration in Athens is struggling to gain access to aid payments as a cash crunch looms before the end of the month. “Where the government is unable to tap the market and where banks are unable to tap the market, in my view there are concerns about monetary financing if ELA is used to purchase treasury bills or to roll over treasury bills,” Bundesbank President Jens Weidmann said in a Bloomberg Television interview in Frankfurt after the decision.

Funny.

• Central Bank Stimulus Is Ancient Recipe for Trouble (Bloomberg)

Central bankers would do well to learn lessons about monetary stimulus from history – ancient history. The practice of governments boosting the amount of money in circulation to spur economic growth isn’t as unconventional as one might think, according to Kabir Sehgal’s new book, “Coined: The Rich Life of Money and How Its History Has Shaped Us.” In it, the 32-year-old former equities salesman at JPMorgan looks at the economics, history and psychology of currencies and the role they play in life. “You need paper money to engender short-term riches to get us out of a crisis, but what ends up happening is it’s hard to keep that in check,” Sehgal said in an interview.

“Currencies devalue, there’s inflation. Then there’s a monetary crisis which leads to an economic crisis.” After carrying out unprecedented stimulus in the wake of the financial crisis, the U.S. Federal Reserve now stands out among major central banks in accepting a higher exchange rate as a sign of economic strength. Peers from Tokyo to Frankfurt, Zurich and Sydney are cutting rates and buying government bonds to stimulate growth and, in the process, sometimes weakening their currencies Rulers have used the supply of hard and paper money to pursue economic and political goals as early as the Roman Empire and in Kublai Khan’s 13th-century Mongol Empire, according to Sehgal.

In the U.S., Benjamin Franklin and Abraham Lincoln advocated printing more paper currency to spur trade and commerce. “The lesson that keeps coming up is really a Faustian bargain,” he said. “It seems great, but eventually it leads to economic trouble.” Sehgal, also a Grammy-award winning jazz producer, left his position as a vice president for emerging-market equities at JPMorgan this week.

“Now is the time to give a message of hope to the Greek people, not only implement, implement, implement and obligations, obligations, obligations..”

• Tsipras Says Greece Doing Its Part In Eurozone Deal (Reuters)

Greece’s problems are euro zone’s problems and the single currency area should send Greece a message of solidarity as Athens stands ready to deliver on promises to reform in exchange for more loans, Greek Prime Minister Alexis Tsipras said. “Greece has already started fulfilling its commitments mentioned in the Eurogroup decision of 20 Feb so we are doing our part and we expect our partners to do their own,” Tsipras told reporters after meeting the speaker of the European Parliament Martin Schulz. “And I’m very optimistic … that we will find a solution because I strongly believe that this is our common interest. I believe that there is no Greek problem, there is a European problem,” he said. Eurozone finance ministers agreed on Feb 20 to extend Greece’s financial rescue by four months, averting a potential cash crunch in March that could have forced the country out of the currency area.

But the extension was granted to give Athens time to negotiate a list of reforms by the end of April that would unblock further aid to the country, whose leftist-led government pledged to reverse austerity. Tsipras, who was also meeting European Commission President Jean-Claude Juncker on Friday, called for a change in the message the euro zone was sending Greece. “Now is the time to give a message of hope to the Greek people, not only implement, implement, implement and obligations, obligations, obligations,” he said. “The message that the European institutions will give help and solidarity with particular rates, in order to over come this very bad situation at the social level,” he said referring to the unemployment rate at 26%.

Primary dealers, you can tickle them but….

• Why The Fed Failed Two Of Europe’s Biggest Banks (CNBC)

The U.S. operations of Germany’s and Spain’s largest banks had their knuckles rapped by the U.S. Federal Reserve late Wednesday. The Fed failed Deutsche Bank and Santander in key tests of their ability to withstand a future financial crisis. But what exactly have they done wrong? After all, they are two of Europe’s most prestigious and largest banks which passed the European Central Bank’s October stress tests comfortably. To start with, the Fed is anxious about having to support the U.S. operations of non-U.S. banks in the event of a future economic crisis, so it is subjecting them to tough scrutiny. While both banks were judged to have enough capital to pass the Fed’s minimum capital requirements, “widespread and substantial weaknesses across their capital planning processes” were identified by the central bank.

Essentially, the banks have not failed in terms of their capital position, but in the quality of their analysis of risk. Some investors argue that this is not much to worry about. This is the second year in a row Santander has failed the tests, while Deutsche’s U.S. unit failed them the first year it took them. However, It was the first time all of the U.S. domestic banks passed the stress tests since they began in 2009. “The European banks have only failed at the margins,” Dennis Gartman, the influential investor and author of the “Gartman Letter”, who dismissed the tests as “borderline silly”, told CNBC Thursday. “I’m not that concerned, nor do I think anyone else should be.

In the case of the stress tests, we know when they will be administered and what questions they have to answer – the fact that anyone will have failed is beyond belief.” Until the U.S. divisions of Deutsche Bank and Santander come up with new capital plans, the Fed has barred them from raising dividends or making stock buybacks. This is not likely to derail any plans for shareholder rewards this year – Deutsche Bank said it didn’t request any dividend payments anyway, and Santander has permission to keep a dividend payout announced earlier this year.

Not a great Whitney fan necessarily, but he’s got this one quote right.

• How Putin Blocked the US Pivot to Asia (Whitney)

On February 10, 2007, Vladimir Putin delivered a speech at the 43rd Munich Security Conference that created a rift between Washington and Moscow that has only deepened over time. The Russian President’s blistering hour-long critique of US foreign policy provided a rational, point-by-point indictment of US interventions around the world and their devastating effect on global security. Putin probably didn’t realize the impact his candid observations would have on the assembly in Munich or the reaction of powerbrokers in the US who saw the presentation as a turning point in US-Russian relations. But, the fact is, Washington’s hostility towards Russia can be traced back to this particular incident, a speech in which Putin publicly committed himself to a multipolar global system, thus, repudiating the NWO pretensions of US elites. Here’s what he said:

“I am convinced that we have reached that decisive moment when we must seriously think about the architecture of global security. And we must proceed by searching for a reasonable balance between the interests of all participants in the international dialogue.”

With that one formulation, Putin rejected the United States assumed role as the world’s only superpower and steward of global security, a privileged position which Washington feels it earned by prevailing in the Cold War and which entitles the US to unilaterally intervene whenever it sees fit. Putin’s announcement ended years of bickering and deliberation among think tank analysts as to whether Russia could be integrated into the US-led system or not. Now they knew that Putin would never dance to Washington’s tune. In the early years of his presidency, it was believed that Putin would learn to comply with western demands and accept a subordinate role in the Washington-centric system. But it hasn’t worked out that way. The speech in Munich merely underscored what many US hawks and Cold Warriors had been saying from the beginning, that Putin would not relinquish Russian sovereignty without a fight.

The declaration challenging US aspirations to rule the world, left no doubt that Putin was going to be a problem that had to be dealt with by any means necessary including harsh economic sanctions, a State Department-led coup in neighboring Ukraine, a conspiracy to crash oil prices, a speculative attack of the ruble, a proxy war in the Donbass using neo-Nazis as the empire’s shock troops, and myriad false flag operations used to discredit Putin personally while driving a wedge between Moscow and its primary business partners in Europe. Now the Pentagon is planning to send 600 paratroopers to Ukraine ostensibly to “train the Ukrainian National Guard”, a serious escalation that violates the spirit of Minsk 2 and which calls for a proportionate response from the Kremlin. Bottom line: The US is using all the weapons in its arsenal to prosecute its war on Putin.

By all means, let’s keep talking, but please not on the basis of baseless accusations..

• ‘Claims SU-25 Shot Down MH17 Unsupportable’ (RT)

Electronic countermeasure pods are no longer reliable source of information, so anyone who says the radar has identified a SU-25 aircraft in the MH17 tragedy is trying to mislead people, Gordon Duff, senior editor of Veterans Today newspaper, told RT.

RT: Though the preliminary results of the investigation into the crash of Malaysian Airlines flight MH17 over Ukraine won’t be known until July new theories of what happened appear every day. One claim is that the Boeing was brought down by an SU-25 fighter jet. But its chief designer has now told German media that’s impossible, because it can’t fly high enough. What do you make of that?

Gordon Duff: The claim that it was an SU-25 is unsupportable. Since 2010, NATO has begun using electronic countermeasure pods. They are designed by Raytheon and BAE Systems. When attached to an aircraft, an SU-27, an SU-29 maybe even an F-15, these allow the backscattering – that is when you use radar, and this is what was said the radar identified as two SU-25 aircraft. Well these pods that attach to any plane can make a plane look like an SU-25 when it’s not an SU-25 or a flock of birds or anything else. It’s a new version of poor man’s stealth…It’s called radar spoofing, so with radar spoofing anyone who says they have identified an aircraft by radar is trying to mislead people because that’s no longer a reliable way of dealing with things.

If I could go on with the SU-25, the claimed service ceiling is based on the oxygen’s supply in the aircraft. Now there is a claim that this plane will only work to 22,000 feet. At the end of the WWII a German ME-262 would fly at 40,000 feet. A P-51 Mustang propeller plane flew at 44,000 feet. The SU-25 was developed as an analogue of the A-10 Thunderbolt, an American attack plane. The planes have almost identical performance except that the SU-25 is faster and more powerful. The A-10 Thunderbolt has a service ceiling of 45,000 feet. The US estimates the absolute ceiling, which is a different term, of the SU-25. And we don’t know whether the SU-25 was involved at all, we are only taking people’s word and people we don’t trust. But the absolute ceiling for the plane is 52,000 feet.

RT: Do you agree with the statement that “many more factors indicate that the Boeing 777 was hit by a ground-to-air missile that was launched from a Buk missile system”? How much technical expertise would it take to fire a Buk launcher?

GD: We’ve looked at this. I had an investigating team, examiners, which included aircraft investigation experts from the US including from the FAA, the FBI and from the Air Line Pilots Association. I also had one of our air traffic and air operational officers…with the Central Intelligence Agency look at this. And one of the things we settled is that in the middle of the day if this were a Buk missile the contrail would have been seen for 50 miles. The contrail itself would have been photographed by thousands of people; it would have been on Instagram, Twitter, all over YouTube. And no one saw it.

You can’t fire a missile and on a flat area in a middle of the day leaving a smoke trail into the air and having everyone not see it. There is no reliable information supporting that it was a Buk missile fired by anyone. And then additionally we have a limited amount of information that NATO and the Dutch investigators have released, forensic information, and that is contradicted by other experts that have looked at things. We don’t have reliable information to deal with but the least possible thing, the one thing we can write off immediately – it wasn’t a ground-to-air missile because you simply can’t fire a missile in the middle of the day without thousands and thousands of people seeing it and filming it with camera phones.

“Poor Fellow-Soldiers of Christ and of the Temple of Solomon”.

• Knights Templar Win Heresy Reprieve After 700 Years (Reuters)

The Knights Templar, the medieval Christian military order accused of heresy and sexual misconduct, will soon be partly rehabilitated when the Vatican publishes trial documents it had closely guarded for 700 years. A reproduction of the minutes of trials against the Templars, “‘Processus Contra Templarios — Papal Inquiry into the Trial of the Templars'” is a massive work and much more than a book – with a €5,900 euros price tag. “This is a milestone because it is the first time that these documents are being released by the Vatican, which gives a stamp of authority to the entire project,” said Professor Barbara Frale, a medievalist at the Vatican’s Secret Archives. “Nothing before this offered scholars original documents of the trials of the Templars,” she told Reuters in a telephone interview ahead of the official presentation of the work on October 25.

The epic comes in a soft leather case that includes a large-format book including scholarly commentary, reproductions of original parchments in Latin, and — to tantalize Templar buffs — replicas of the wax seals used by 14th-century inquisitors. Reuters was given an advance preview of the work, of which only 799 numbered copies have been made. One parchment measuring about half a meter wide by some two meters long is so detailed that it includes reproductions of stains and imperfections seen on the originals. Pope Benedict will be given the first set of the work, published by the Vatican Secret Archives in collaboration with Italy’s Scrinium cultural foundation, which acted as curator and will have exclusive world distribution rights. The Templars, whose full name was “Poor Fellow-Soldiers of Christ and of the Temple of Solomon”, were founded in 1119 by knights sworn to protecting Christian pilgrims visiting the Holy Land after the Crusaders captured Jerusalem in 1099.

Human kindness overflowing.

• Arctic Melt Brings More Persistent Heat Waves to US, Europe (Bloomberg)

The U.S., Europe and Russia face longer heat waves because summer winds that used to bring in cool ocean air have been weakened by climate change, German researchers said. Rapid Arctic warming disturbs air streams in ways that have “significantly” reduced summer storms, raising the likelihood of heat waves, the Potsdam Institute for Climate Impact Research said in a report Thursday in the journal Science. Hot weather in Russia in 2010 devastated crop harvests and caused wildfires. “Unabated climate change will probably further weaken summer circulation patterns which could thus aggravate the risk of heat waves,” co-author Jascha Lehmann said in a statement e-mailed by the institute.

“The warm temperature extremes we’ve experienced in recent years might be just a beginning.” With heat-trapping gases from burning oil, coal and natural gas at record levels, global temperatures are set to warm by 3.6 degrees Celsius (6.5 Fahrenheit) by the end of the century, according to the International Energy Agency. That’s the quickest climate shift in 10,000 years. Temperature gains can disrupt air flows that govern storm activity, the Potsdam report showed. “When the great air streams in the sky above us get disturbed by climate change, this can have severe effects on the ground,” lead author Dim Coumou said. The study used data on atmospheric circulation in the Northern Hemisphere from 1979 to 2013.

Warming in the Arctic, where temperatures rise faster than elsewhere as ice caps melt, is believed to narrow temperature differences and thus weaken the jet stream — air motion that’s important for shaping our weather, according to the scientists. “The reduced day-to-day variability that we observed makes weather more persistent, resulting in heat extremes on monthly timescales,” Coumou said. “The risk of high-impact heat waves is likely to increase.”