Nov 072018
 


M. C. Escher Drawing hands1948

 

The Investigations Trump Will Face Now That Democrats Control the House (NY)
Paul Ryan On Midterms: ‘Tonight History Has Repeated Itself’ (Hill)
Ex-JP Morgan Trader Pleads Guilty To Manipulating US Metals Markets (CNBC)
Italy’s Battle With Brussels Is About More Than Money (Molinari)
EU Austerity Bias Is To Blame For Budget Standoff With Italy (Ind.)
Wanted: Radical Economist To Boost UK Economy (G.)
EU Stumbles In Plan To Levy 3% Digital Tax On Big Tech Firms (G.)
France Demands New Digital Tax On Tech Giants Should Come This Year (CNBC)
UK Accuses EU Of Brexit Bias As It Refuses To Endorse Aid Spending (G.)
Facial Image Matching System Risks ‘Chilling Effect’ On Freedoms (G.)
The West is Failing Julian Assange (Maurizi)
Recovery Of Endangered Whales Hampered By Humans Long After Hunting (AFP)
Children Urged To Play Outdoors To Cut Risk Of Shortsightedness (G.)

 

 

Yes, they dream of impeachment. Dozens of options. As per this New Yorker piece, even 2 years of Mueller isn’t enough, he must be replaced by a committee.

Likely to happen soon: Sessions, Mueller, maybe Rosenstein to be fired by Trump. And DNC/FBI operatives and activities investigated.

Be careful what you wish for.

The Investigations Trump Will Face Now That Democrats Control the House (NY)


CNN projection at about 3 am EST

There are a half dozen House committees that have the power to investigate Trump—Intelligence, Oversight, Ways and Means, and Judiciary, among others. The chair of any committee—always a member of the majority party—has wide latitude to pursue investigations, issue subpoenas, and compel testimony. The news for the next year or longer seems likely to be dominated by a steady stream of coverage of the people closest to Trump as they testify before Congress under duress, or under a grant of immunity, or coverage of their refusal to speak at all for fear of incriminating themselves. At the same time, there could be regular reports about what the committee staff has found in subpoenaed records—perhaps Trump’s tax returns, his company’s internal financial documents, the records of his various oligarch partners in the former Soviet Union, and e-mails and other digital messages between Trump’s team and people in Russia.

For many Democrats—and quite a few independents and even a few Republicans—this is a gleeful prospect. After two years of feeling powerless, they will see, for the first time, a sustained, powerful check on Trump’s power and a public investigation with teeth and tools. It is hard to imagine that a serious investigation into Trump’s businesses, campaign, and Administration won’t uncover a lot of damaging information. There is, however, something of a split among Democratic Party operatives. I spoke with many of them—most wouldn’t speak on the record about an intraparty battle—and learned that there are two (or maybe three) distinct and contradictory views among influential Democrats.

Many are anxious to get going on these investigations as soon as possible. There is still a real possibility that the President colluded with the Russian government to sway an American election. Furthermore, there is growing evidence that his business and personal conduct has been so questionable that he could be compromised by multiple foreign governments. This is as serious a question as Congress could face, and needs to be investigated. Perhaps Robert Mueller will reveal all the information anyone could want, but maybe he won’t, and Congress cannot leave the investigation of the Administration to a special counsel who is, for all his hard-won independence, still a member of the administrative branch of government.

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Same old same old. It’s about mitigating losses. Obama lost much more. Anywhere from 50-100 GOP Congressmen retired. That’s a huge loss. But they’re mostly moderates, and the new candidates are not.

Paul Ryan On Midterms: ‘Tonight History Has Repeated Itself’ (Hill)

Paul Ryan (R-Wisc.) in his final statement as Speaker of the House said “history has repeated itself” this midterm election cycle, adding that “a party in power always faces tough odds in its first midterm election.” The Democrats took back the House on Tuesday night, flipping more than the 23 seats needed to take back control after eight years of a Republican majority. “It is always hard to see friends and good colleagues work so hard and fall short,” Ryan said in the statement. “Yet I’m proud of the campaign that our members and candidates ran in a challenging political environment.” Ryan’s statement noted that the president’s party since 1862 has lost an average of 32 House seats during the midterm elections.

The retiring Wisconsin Republican congratulated Democrats for winning the majority and the Senate Republicans for maintaining theirs. “We don’t need an election to know that we are a divided nation, and now we have a divided Washington,” Ryan added. “As a country and a government, we must find a way to come together to find common ground and build on the successes of this Congress.” Ryan announced earlier this year that he would be retiring in November. The GOP held Ryan’s vacated seat in Wisconsin on Tuesday night, as Republican Brian Steil won a closely watched-race against Democrat Randy Bryce.

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“..he learned this practice from more senior traders and that his supervisors at the firm knew of his actions.”

Ex-JP Morgan Trader Pleads Guilty To Manipulating US Metals Markets (CNBC)

An ex-J.P. Morgan Chase trader has admitted to manipulating the U.S. markets of an array of precious metals for about seven years — and he has implicated his supervisors at the bank. John Edmonds, 36, pleaded guilty to one count of commodities fraud and one count each of conspiracy to commit wire fraud, price manipulation and spoofing, according to a Tuesday release from the U.S. Department of Justice. Edmonds spent 13 years at New York-based J.P. Morgan until leaving last year, according to his LinkedIn account. As part of his plea, Edmonds said that from 2009 through 2015 he conspired with other J.P. Morgan traders to manipulate the prices of gold, silver, platinum and palladium futures contracts on exchanges run by the CME Group.

He and others routinely placed orders that were quickly cancelled before the trades were executed, a price-distorting practice known as spoofing. “For years, John Edmonds engaged in a sophisticated scheme to manipulate the market for precious metals futures contracts for his own gain by placing orders that were never intended to be executed,” Assistant Attorney General Brian Benczkowski said in the release. Of note for J.P. Morgan, the world’s biggest investment bank by revenue: Edmonds, a relatively junior employee with the title of vice president, said that he learned this practice from more senior traders and that his supervisors at the firm knew of his actions.

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It’s about overeignty.

Italy’s Battle With Brussels Is About More Than Money (Molinari)

The traditional parties – beginning with the biggest ones, the Democratic party and Forza Italia – failed to grasp the magnitude of the discontent, so the political prize went to those politicians who could. In the south it was Luigi Di Maio’s Five Star Movement that prevailed – thanks to its “citizenship income” proposal – a benefit of €780 (£680) a month for the unemployed. In the north it was Matteo Salvini’s League, which backed two horses at the same time: the so-called “flat tax” to help out businesses in difficulty; and a tough approach to migrants. Five Star and the League have clear dividing lines – their geographic base, their economic ideas and their social makeup. But they have one thing in common: hostility to the European Union.

Five Star accuses the EU of being the root cause of Italy’s economic woes, and the League blames it for having abandoned Italy to the migrant crisis. Which explains why, for Di Maio’s supporters as much as for Salvini’s, the current battle with the European commission over the government’s proposed budget, judged by Brussels to violate agreed eurozone spending restraint, is essentially about identity. The standoff is not just about the deficit, the outlook for growth, the failure to bring down Italy’s debt and the absence of reform: its root cause is the coalition’s belief that by revolutionising its relationship with the EU, Italy will be able to win back trust, optimism and a better future.

Hence the current short-circuit between Rome and Brussels. While the commission is trying to negotiate with Giovanni Tria, the minister for the economy, to modify the Italian budget, Salvini’s and Di Maio’s interests lie in a full-frontal confrontation with Europe.

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But it’s still about money…

EU Austerity Bias Is To Blame For Budget Standoff With Italy (Ind.)

[..] How is it that a far-right politician like Salvini, himself no enemy of big finance, can claim that he speaks for those opposing austerity, corporations and inequality? In short, because Europe’s traditional left has failed to do so. Salvini’s primary concern, of course, is not the majority of Italy’s poor. The claim that this is a budget to “abolish poverty” is pure hyperbole. In fact, the disputed budget is a mish-mash of policies aimed at pleasing both parts of the Italian coalition’s social base. For the League, this mean tax cuts on small businesses and the middle class and protection of better-off pensioners. Five Star meanwhile, the gradual introduction of universal basic income is an important, and progressive, element. There’s also some investment – though not enough.

Why does the EU care? The crux of the problem is that Italy wants to spend more than Eurozone rules allow. It’s planning to run a budget deficit equal to 2.4 per cent of GDP, too high, say EU rules, for a government with a debt as big as Italy’s (currently over 131 per cent of GDP). These are the rules of the Eurozone laid down in treaties (but always open to interpretation when it’s convenient). Any monetary union requires rules. On entering such a union, governments accept that they are giving something up – monetary policy – but gaining something else – in this case monetary stability, low interest rates, less exposure to the law of the markets. The problem in the EU is that the rules don’t work for the majority of European citizens, and they are particularly punishing to weaker economies.

After five years of 10 per cent unemployment and low or negative growth, Italy’s government says you have to spend and invest to repair a damaged economy. They compare their programme to that of the New Deal measures of President Roosevelt. This shouldn’t be controversial. But the Eurozone’s rules go in precisely the opposite direction – forcing austerity on stagnant and depressed countries in exactly the way the International Monetary Fund pushed austerity of dozens of developing countries in the 1980s and 90s. This result has been catastrophic in terms of human welfare.

Greece experienced the worst effects. It has experienced an economic collapse longer-lasting than the US’s Great Depression in the 1930s. GDP is still lower than it was in 2007. While unemployment has fallen from 30 per cent, it’s still at nearly 20 per cent, far higher in terms of young people. Wages and pensions have been slashed. Vast swathes of the economy have been sold (to the very financial sector which created the global financial crash), and debt is higher than ever, at 180 per cent of GDP, with payments due for decades into the future.

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A radical who fits the existing mold. Oxymoronic.

Wanted: Radical Economist To Boost UK Economy (G.)

One of the biggest cash prizes in world economics has been launched to find “radical ideas” to reinvigorate the British economy. Launched against a backdrop of deep public distrust in politicians to revitalise the UK economy, the Institute for Public Policy Research (IPPR) thinktank has lined up an £150,000 prize fund to uncover fresh ideas. It comes after growth figures revealed at the budget show economic growth in Britain has dropped to among the lowest levels in the G7, while inequality has risen and there are growing pressures on the environment. Believed to be the third-biggest prize in international economics, the new IPPR prize will reward policy solutions to tackle these problems, while forcing a “step change in the quality and quantity of the UK’s economic growth.”

It will include a single main prize of £100,000, placing it among the most lucrative prizes in the economics profession after the 9m Swedish krona (£760,455) Nobel award from the Swedish central bank and the £250,000 Wolfson prize, which was launched in 2011 by the Tory peer and Next chief executive Simon Wolfson. The IPPR economics prize – supported by the prominent Labour donor and Brexit campaigner John Mills – will also have a dedicated under-25s prize worth £25,000, and a runners-up prize pot of £25,000. Mills, who is the founder of the JML electronics company, said that Britain faced a “toxic cocktail of issues that need fresh solutions,” adding that growth has recently been 60% lower than the G20 average. “We are falling further behind every year. Our productivity is poor, levels of investment are meagre, and we cannot pay our way in the world,” he added.

[..] With a deadline of 6 January 2019, entrants for the economics prize will be asked to answer the question: “What would be your radical plan to force a step change in the quality and quantity of the UK’s economic growth?”

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Taxes should not be a priority. Legal issues should be. Monopolies.

EU Stumbles In Plan To Levy 3% Digital Tax On Big Tech Firms (G.)

A European Union plan to tax Google, Facebook and other internet firms risks failure after a handful of member states announced their opposition. EU countries are studying proposals to levy a 3% tax on big internet companies that make money from user data or digital advertising, in a bid to level the playing field with bricks-and-mortar companies that pay more tax. But the idea, which must be agreed unanimously by all 28 member states, is running into serious opposition, as Ireland, Sweden and Denmark made their criticism public on Tuesday.

Germany had initially supported the idea in a joint agreement with France, but is now seeking to water down and delay the proposals, moves that are causing deep frustration in Paris. A dozen countries are moving ahead with their own national digital taxes, with Spain and the UK among the recent converts. The chancellor, Philip Hammond, announced last week that the UK was prepared to go it alone, with a “narrowly-targeted” digital services tax that is expected to come into force in April 2020 and raise £400m for the exchequer. Opponents to the digital tax fear the wrath of Donald Trump’s White House, which regards the EU’s efforts to ensure “fair taxation” of internet giants as an attack on American companies, a charge the EU rejects.

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This year has less than two months left.

France Demands New Digital Tax On Tech Giants Should Come This Year (CNBC)

The French government has pushed for a new levy on internet giants, such as Google, Apple, Facebook and Amazon, in order to make these firms pay what they see as a fairer tax rate in the region. This measure is likely to get some sympathy among voters ahead of next spring’s European elections. However, some technical differences among European countries have not allowed substantial progress on this front. Critics of the new tax also say that it could stifle innovation. “We want the adoption of the directive on digital taxation by the end of this year. This is a clear red line for the French government,” Bruno Le Maire, France’s finance minister told reporters in Brussels as he prepared to discuss the issue with his European counterparts.

“We are aware there are some technical issues and technical concerns, but these are technical concerns not political problems, so we still have three or four weeks before the next Ecofin (a regular meeting between EU finance ministers) to fix those technical issues,” Le Maire said. “And I will spend day and night with my German friends to find a compromise and to find a solution on those technical issues. But nobody could take advantage of those technical difficulties to avoid its political responsibility,” the French lawmaker added. There are different concerns across Europe regarding a new tax on the digital giants. Some member states believe that such a tax would be harmful for smaller countries, or potentially hurt some traditional industries. Both Ireland and the Netherlands believe the EU should wait for an international approach to avoid looking “anti-business.”

According to data from the European Commission, digital companies pay on average an effective tax rate of 9.5 percent — compared to 23.2 percent for traditional businesses. The EU proposals include a “common EU solution” which would allow member states to tax profits that are generated in their territory, even if these companies do not have a physical presence there.

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Yeah, NGOs are a big priority for May.

UK Accuses EU Of Brexit Bias As It Refuses To Endorse Aid Spending (G.)

The British government has taken the unprecedented step of refusing to endorse billions of pounds of EU spending on aid projects, as it accused the European commission of discriminating against UK-based organisations over Brexit. In a vote among the 28 member states on the latest allocation of the bloc’s £26.5bn development budget, the UK government declined to give its support for aid spending for the first time. It instead issued a statement accusing the commission of failing to offer the best value for money for European taxpayers by discriminating against British-based organisations that were seeking funding. The criticism was made in response to a commission decision to include clauses in its contracts with aid providers stating all funding will be terminated should there be a no-deal Brexit.

British NGOs have been further warned that unless they can commit to making good the loss of funding should the UK crash out of the EU, they should not compete for funds. A UK government statement explaining its abstention on plans for the European development fund (EDF) expressed particular frustration over the failure of the commission to respond to a letter of complaint from the international development secretary, Penny Mordaunt. The statement, obtained by the Guardian, said the UK was “still waiting for a response to the concerns raised at a political level in August, including via secretary of state for international development’s letter to the commission of 23 August 2018, on the treatment of UK entities in the tendering process of EU programmes”.

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From Australia. These things can no longer be stopped. But yes, privacy is gone.

Facial Image Matching System Risks ‘Chilling Effect’ On Freedoms (G.)

Civil rights groups have warned a vast, powerful system allowing the near real-time matching of citizens’ facial images risks a “profound chilling effect” on protest and dissent. The technology – known in shorthand as “the capability” – collects and pools facial imagery from various state and federal government sources, including driver’s licences, passports and visas. The biometric information can then rapidly – almost in real time – be compared with other sources, such as CCTV footage, to match identities. The system, chiefly controlled by the federal Department of Home Affairs, is designed to give intelligence and security agencies a powerful tool to deter identity crime, and quickly identify terror and crime suspects.

But it has prompted serious concern among academics, human rights groups and privacy experts. The system sweeps up and processes citizens’ sensitive biometric information regardless of whether they have committed or are suspected of an offence. Critics have warned of a “very substantial erosion of privacy”, function creep and the system’s potential use for mass general surveillance. There are also fears about the level of access given to private corporations and the legislation’s loose wording, which could allow it to be used for purposes other than related to terrorism or serious crime. States agreed to the concept at a Council of Australian Governments meeting last year, though it is yet to be legislated by federal parliament.

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Stefania Maurizi is an Italian journalist. She has worked on all WikiLeaks releases of secret documents, and partnered with Glenn Greenwald to reveal the Snowden files about Italy.

The West is Failing Julian Assange (Maurizi)

Documents reveal that the UK authorities referred to the Assange case as not an ordinary one from the very beginning. “Please do not think that the case is being dealt with as just another extradition request,” they wrote on January 13, 2011 to the Swedish prosecutors. A few months later, a UK official added: “I do not believe anything like this has ever happened, either in terms of speed or in the informal nature of the procedures. I suppose this case never ceases to amaze.” What is special about this case? And why did the UK authorities keep insisting on extradition at all costs?

At some point even the Swedish prosecutors seemed to express doubts about the legal strategy advocated by their UK counterpart. Emails between UK and Swedish authorities I have obtained under FOIA show that in 2013 Sweden was ready to withdraw the European Arrest Warrant in light of the judicial and diplomatic paralysis the request for extradition had created. But the UK did not agree with lifting the arrest warrant: the legal case dragged on for another four years, when finally on the May 19, 2017, Sweden dropped its investigation after Swedish prosecutors had questioned Assange in London, as he had always asked.

Although the Swedish probe was ultimately terminated, Assange remains confined. No matter that the UN Working Group on Arbitrary Detention established that the WikiLeaks founder has been arbitrarily detained since 2010, and that he should be freed and compensated. The UK, which encourages other states to respect international law, doesn’t care about the decision by this UN body whose opinions are respected by the European Court of Human Rights. After trying to appeal the UN decision and losing the appeal, Britain is simply ignoring it. There is no end in sight to Assange’s arbitrary detention.

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We’ll kill ’em off yet.

Recovery Of Endangered Whales Hampered By Humans Long After Hunting (AFP)

When an endangered female North Atlantic right whale spends months, even years, disentangling itself from cast-off fishing nets, there’s not much energy left over for mating and nursing calves. Coping with such debris, along with ship collisions and other forms of human encroachment, have severely stymied recovery of the majestic sea mammals long after explosive harpoons and factory ships nearly wiped them out, according to a study published Wednesday. Once numbering in the tens of thousands, the northern whale’s population — hovering around 450 today — climbed slowly from 1990, but began to drop again around 2010.

Had the Canadian and US waters they plied during that quarter of a century been pristine and uncluttered by human traffic, “the species’ numbers would be almost double what they are now, and their current emergency wouldn’t be so dire,” scientists led by Peter Corkeron of the NOAA Northeastern Fisheries Science Center in Massachusetts reported. More to the point, there would be twice as many female whales: “The general slope of the recovery trajectory is driven by female mortality,” they added. From 1970 to 2009, 80 percent of 122 known North Atlantic right whale deaths were caused by human objects or activity. The species has not been hunted for more than half a century.

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Modern man is fat, depressed and blind.

Children Urged To Play Outdoors To Cut Risk Of Shortsightedness (G.)

Children should be encouraged to spend time outdoors to reduce their risk of becoming shortsighted, experts have said. Shortsightedness is rising around the world, with the condition said to have reached epidemic proportions in east Asia: estimates suggest about 90% of teenagers and young adults in China have the condition. While genetics are thought to play a large role in who ends up shortsighted – a condition that is down to having an overly long eyeball – research also suggests environmental factors are important. Several studies have found children who spend more time outdoors have a lower risk of myopia.

While some report that looking into the distance could be important, others say exposure to outdoor light is key. Experts say they have found new factors, and confirmed others, which could affect a child’s risk of becoming shortsighted. These include playing computer games, being born in the summer and having a more highly educated mother. “There is not much you can do about when your child is born … but periods indoors doing indoor activities does increase your risk of myopia,” said Katie Williams, an author of the study by King’s College London. “A healthy balance of time outdoors and a balance during early education is important.”

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May 062018
 
 May 6, 2018  Posted by at 9:46 am Finance Tagged with: , , , , , , , , , , ,  


Paul Klee In the Houses of Saint Germain 1932

 

The Rising Dollar Will Trigger Next “Systemic Banking Crisis” – Napier (ZH)
Warren Buffett Compares Bitcoin To ‘Rat Poison Squared’ (Ind.)
UK Rates Will Stay Low For A Very Long Time (G.)
Trump White House Accuses China Of ‘Orwellian Nonsense’ (G.)
US Prosecutors Allege Ex-CEO of VW Knew All About Diesel Cheating (BBC)
US Freezes Funding For Syria’s “White Helmets” (CBS)
The U.S Government Can Still Confiscate Gold (GT)
Shock Figures From Top Thinktank Reveal Extent Of NHS Crisis (G.)
Earthquakes, Lava Fissures Could Last For Months On Hawaii (R.)
CO2 Levels In Earth’s Atmosphere ‘Highest In 800,000 Years’ (Ind.)
Facing Extinction, The North Atlantic Right Whale Cannot Adapt. Can We? (G.)

 

 

Emerging markets are already hurting. Watch Turkey.

The Rising Dollar Will Trigger Next “Systemic Banking Crisis” – Napier (ZH)

Fresh off his successful call earlier this year that the US dollar would strengthen in the coming months, macroeconomic strategist and market historian Russell Napier joined MacroVoices host Erik Townsend to discuss why he favors deflation and why he has such a bullish view on the US dollar. Echoing David Tepper’s concerns that the equity highs for the year might already be in, and that a 10-year yield above 3.25% could lead to market chaos, Napier said he sees interest rates rising sharply in the coming months as the dollar strengthens – a phenomenon that will push the US back into deflation.

Napier’s thesis relies on one simple fact: With the Fed and foreign buyers pulling back, who will step into the breach and buy Treasurys? The answer is – unfortunately for anybody who borrows in dollars – nobody. In fact, the Fed is expected to allow $228 billion in Treasury debt to roll off its balance sheet this year. This “net sell” will inevitably lead to higher interest rates in the US, as well as a stronger dollar. And once the 10-year yield reaches the 4% area, signs of stress that could be a lead up to a global “credit crisis” could start to appear.

“We know what the Federal Reserve plans to sell this calendar year, $228 billion. We know what the rise in global foreign reserves is, and about 64% of that will flow into the United States’ assets. Slightly less of that will flow into Treasuries. $228 billion, at the current rate at which foreign reserves are accumulating, we are not going to see foreign central bankers offsetting the sales from the Fed. So that’s a net sell. We don’t know what that net sale will be, but it’s a net sale from central bankers at a time when the Congressional Budget Office forecasts a roughly $1 trillion fiscal deficit. This is the first time in my investment career that savers will have to fund the whole lot. And it’s perfectly normal that real rates of interest have to go higher to attract those savings.

$1 trillion is still a large amount of money. It can come from anywhere in the world. It can come from outside the United States. It can come from inside the United States. But it’s a liquidation of other assets or a rise in the savings rate, which is necessary to fund this. Either of these things is positive for the dollar.”

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“It essentially will not deliver anything other than supposed scarcity..”

Warren Buffett Compares Bitcoin To ‘Rat Poison Squared’ (Ind.)

Mega-investor Warren Buffett still is not buying into the crypto-currency craze, likening Bitcoin to “rat poison squared”. “Cryptocurrencies will come to a bad ending”, Mr Buffett told shareholders at a retreat in Omaha, Nebraska, according to the Associated Press, adding that crypto currencies have no intrinsic value. “It essentially will not deliver anything other than supposed scarcity”, added Mr Buffett, who has earned the nickname the “Oracle of Omaha” for his prescient investment decisions. The Berkshire Hathaway CEO maintained his sceptical stance even as the alternate currency’s soaring value set off a scramble last year.

In an interview with CNBC last year, he said his company did not own any cryptocurrency and was avoiding taking a position in them. “What’s going on definitely will come to a bad ending,” Mr Buffett said at the time. Other prominent economists and investors have echoed those warnings, cautioning that the frenzied speculation around crypto-currencies had the makings of a bubble. Turning to politics, Mr Buffett downplayed the risks of a trade war breaking out as a result of Donald Trump imposing tariffs on steel and aluminum, which sparked Chinese retaliation. He said it was unlikely that the two countries would “dig themselves into” a “real trade war”, suggesting the broad appeal of trade would prevent conflict.

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If the Fed raises rates, can BoE remain behind?

UK Rates Will Stay Low For A Very Long Time (G.)

Bank of England governor Mark Carney has already faced accusations of behaving like the Grand old Duke of York and he will probably do so again should Britain’s central bank opt to keep interest rates on hold. Since he joined the Bank in 2013, he has marched borrowers and savers up the hill with heavy hints about the imminent prospect of a rate rise, only to march them back down again. Last November’s restoration of 2016’s emergency rate cut hardly qualified as a major move, whatever the Bank said about its significance. Until an interview with the BBC during the IMF spring meetings a fortnight ago, it seemed to be a racing cert that the Bank was finally ready to begin the long journey back to 3% and push the base rate from 0.5% to 0.75%.

The markets were guided to expect action at a meeting of the monetary policy committee on Thursday. And it wasn’t just Carney dropping hints. Almost every member of the committee who had previously blocked a rise had gone on the record arguing that the time for a rate increase was near at hand. Speeches by external member Jan Vlieghe constituted the most startling intervention. During 2016 and much of 2017, the former hedge fund economist turned interest-rate setter was one of the most vociferous opponents of a rise. His former brethren in the Square Mile considered him an arch dove who might never vote to increase rates, such was his downbeat view of the economy’s growth potential.

Yet, towards the end of last year, he was one of the most optimistic proponents of the economy’s resilience and the likelihood of a rate rise. Just as before, a moment of central bank exuberance looks like becoming a non-event – which is strange given Vlieghe’s reasoning for backing an increase last year. Then, he said that ultra-low unemployment, steady growth and the probable end to a long period of declining real wages was enough to justify tighter monetary policy.

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Ha!

Trump White House Accuses China Of ‘Orwellian Nonsense’ (G.)

The White House on Saturday condemned Chinese efforts to control how US airlines refer to Taiwan, Hong Kong and Macao as “Orwellian nonsense”. The harshly worded statement came as a high-level trade delegation led by the Treasury secretary Steven Mnuchin returned from negotiations in China. The carriers were told to remove references on their websites or in other material that suggests Taiwan, Hong Kong and Macau are part of countries independent from China, US and airline officials said. Taiwan is China’s most sensitive territorial issue. Beijing considers the self-ruled, democratic island a wayward province. Hong Kong and Macau are former European colonies that are now part of China but run largely autonomously.

A spokesman for Airlines for America, a trade group representing United Airlines, American Airlines and other major carriers, said the group was “continuing to work with US government officials as we determine next steps”. In January, Delta Air Lines, following a demand from China over listing Taiwan and Tibet as countries on its website, apologized for making “an inadvertent error with no business or political intention” and said it had taken steps to resolve the issue. Also in January, China suspended Marriott International’s Chinese website for a week, punishing the world’s biggest hotel chain for listing Tibet, Taiwan, Hong Kong and Macau as separate countries in a customer questionnaire.

On Saturday, White House press secretary Sarah Sanders said in a statement that Donald Trump “ran against political correctness in the United States” and as president would “stand up for Americans resisting efforts by the Chinese Communist Party to impose Chinese political correctness on American companies and citizens”.

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What will Germany do?

US Prosecutors Allege Ex-CEO of VW Knew All About Diesel Cheating (BBC)

It was an “appalling” fraud that went to the very top of the company. That is the striking allegation made by US prosecutors looking into the emissions-cheating scandal at the Volkswagen Group. The indictment unsealed on Thursday claims that former CEO Martin Winterkorn was not only fully briefed about what his engineers were up to, he also authorised a continuing cover-up. These allegations have yet to be tested in a court of law. But if true, they paint a picture of extraordinary executive wrongdoing at one of the titans of German industry. Dr Winterkorn himself is unlikely ever to face trial in the US. But he remains under investigation in Germany on suspicion of deceiving investors.

The Volkswagen scandal erupted in September 2015, when the company admitted that nearly 600,000 cars sold in the US were fitted with “defeat devices” designed to circumvent emissions tests. Shortly afterwards the then head of its US operations, Michael Horn, told a congressional committee that the deception was the work of “a couple of software engineers”. We know that was far from the truth. Volkswagen has already admitted as much in an agreed “statement of facts” published last year as part of a settlement with the US Department of Justice. That document set out how Volkswagen engineers struggled to make a diesel engine which would both perform well and be capable of meeting stringent US emissions standards.

It explained how instead they designed a system to switch on emissions controls when the cars were being tested, and turn them off during normal driving. It also described how managers repeatedly sanctioned the use of this system despite objections from some employees, and encouraged engineers to hide what they were up to. The indictment against Dr Winterkorn goes considerably further – suggesting that the CEO himself was made well aware of what the engineers were doing and authorised a continued cover-up. It claims that in early 2014, engineers heard about a study commissioned by the International Council on Clean Transport, which showed that VW diesels were producing far higher emissions on the road than in official lab tests.

It says that senior managers were informed, and warned that the study might result in VW’s deception being uncovered. A memorandum was written for Dr Winterkorn explaining that the company would be unable to explain the test results to the authorities.

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No, CBS, you can’t sing the praises of these people without looking behind them.

US Freezes Funding For Syria’s “White Helmets” (CBS)

Less than two months ago the State Department hosted members of the White Helmets at Foggy Bottom. At the time, the humanitarian group was showered with praise for saving lives in Syria. “Our meetings in March were very positive. There were even remarks from senior officials about long-term commitments even into 2020. There were no suggestions whatsoever about stopping support,” Raed Saleh, the group’s leader, told CBS News. Now they are not getting any U.S funding as the State Department says the support is “under active review.” The U.S had accounted for about a third of the group’s overall funding. “This is a very worrisome development,” said an official from the White Helmets. “Ultimately, this will negatively impact the humanitarian workers ability to save lives.”

The White Helmets, formally known as the Syrian Civil Defense, are a group of 3,000 volunteer rescuers that have saved thousands of lives since the Syrian civil war began in 2011. A makeshift 911, they have run into the collapsing buildings to pull children, men and women out of danger’s way. They say they have saved more than 70,000 lives. Having not received U.S. funding in recent weeks, White Helmets are questioning what this means for the future. They have received no formal declaration from the U.S. government that the monetary assistance has come to a full halt, but the group’s people on the ground in Syria report that their funds have been cut off.

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“..gold is actually what kept the Federal Reserve solvent in 2008.”

The U.S Government Can Still Confiscate Gold (GT)

By the 1930s, the US government was facing its most severe financial crisis, and it needed gold (something of value), to stimulate the economy that was running on the fumes of fiat currency. So, it took people’s gold. It was as simple as that. Non-compliance was threatened with severe punishment. We may be facing another financial crisis, and it might be best to avoid the role of fugitive “gold hoarder.” At this point, it doesn’t make sense for the government to confiscate private gold, as a cashless society will indirectly control peoples finances. Why would the government seize gold? In 1933, under the 1913 Federal Reserve Act, the dollar had to be backed by 40 percent gold.

This would give the Federal Reserve room to print new money when needed. What’s a government to do when it needs to print money, but doesn’t have the gold reserves needed to back it up? It passes an Executive Order making gold ownership illegal but buys up the illegal gold itself. That’s what Roosevelt did. When the government continued to print more money, it declared ownership of silver illegal a year later. Soon after the government confiscated all gold, the price rose by 40 percent. As if by magic, the US government had a lot more funds than it had before. What happens is that the government buys your gold with cash, then devalues the cash and raises the value of the gold. It wins, you lose.

While the government attributes artificial value to money, it can do and does the same to the value of gold. The government currently holds 261 million ounces of gold in reserve at marked on its book at $42.22 per ounce. That’s a total value of $11 billion. Or is it? The fair market value of gold today is around $1,300 per ounce. As Jim Rickards pointed out in the New Case For Gold, gold is actually what kept the Federal Reserve solvent in 2008.

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Third world.

Shock Figures From Top Thinktank Reveal Extent Of NHS Crisis (G.)

The NHS has among the lowest per capita numbers of doctors, nurses and hospital beds in the western world, a new study of international health spending has revealed. The stark findings come from a new King’s Fund analysis of health data from 21 countries, collected by the Organisation for Economic Cooperation and Development. They reveal that only Poland has fewer doctors and nurses than the UK, while only Canada, Denmark and Sweden have fewer hospital beds, and that Britain also falls short when it comes to scanners. “If the 21 countries were a football league then the UK would be in the relegation zone in terms of the resources we put into our healthcare system, as measured by staff, equipment and beds in which to care for patients,” said Siva Anandaciva, the King’s Fund’s chief analyst.

“If you look across all these indicators – beds, staffing, scanners – the UK is consistently below the average in the resources we give the NHS relative to countries such as France and Germany. Overall, the NHS does not have the level of resources it needs to do the job we all expect it to do, given our ageing and growing population, and the OECD data confirms that,” he added. The report concludes that, given the dramatic differences between Britain and other countries: “A general picture emerges that suggests the NHS is under-resourced.”

The thinktank’s research found that the UK has the third-lowest number of doctors among the 21 nations, with just 2.8 per 1,000 people, barely half the number in Austria, which has 5.1 doctors per 1,000 of population. Similarly, the UK has the sixth-smallest number of nurses for its population: just 7.9 per 1,000 people – way behind Switzerland, which has the most: 18 nurses, more than twice as many. With hospital beds, the UK has just 2.6 for every 1,000 people, just over a third of the number in Germany, which has the most – 8.1 beds – and which places the UK 18th overall out of the 21 countries which the OECD gathered figures for. The number of hospital beds in England has halved over the last 30 years and now stands at about 100,000 ..

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How wrong can this go?

Earthquakes, Lava Fissures Could Last For Months On Hawaii (R.)

More homes on Hawaii’s Big Island were destroyed on Saturday as eruptions linked to the Kilauea volcano increased, spewing lava into residential areas and forcing nearly 2,000 people to evacuate, officials said. Scientists forecast more eruptions and more earthquakes, perhaps for months to come, after the southeast corner of the island was rocked by a 6.9 tremor on Friday, the strongest on the island since 1975. The U.S. Geological Survey (USGS) said on Saturday that several new lava fissures had opened in the Leilani Estates subdivision of Puna District, about a dozen miles (19 km) from the volcano. Not all the fissures were still active, it added.

The Hawaiian Volcano Observatory said at midday local time on Saturday that “eruptive activity is increasing and is expected to continue.” Janet Babb, a spokeswoman for the observatory, said by telephone that the eruptions could carry on “for weeks or months.” Babb said the activity since Thursday is beginning to show similarities to another event in the area in 1955 that lasted for 88 days, when far fewer people lived near the volcano.

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Rebalancing carbon: there’s too much inside the planet.

CO2 Levels In Earth’s Atmosphere ‘Highest In 800,000 Years’ (Ind.)

The concentration of carbon dioxide in the atmosphere has reached its highest level in at least 800,000 years, according to scientists. In April, CO2 concentration in the atmosphere exceeded an average of 410 parts per million (ppm) across the entire month, according to readings from the Mauna Loa Observatory in Hawaii. This is the first time in the history of the observatory’s readings that a monthly average has exceeded that level. The Scripps Institution of Oceanography said that before the Industrial Revolution, carbon dioxide levels did not exceed 300ppm in the last 800,000 years.

The Keeling Curve, which plots the concentration of carbon dioxide in the atmosphere, shows a steady rise in CO2 levels in the atmosphere for decades. Scientists have warned levels of carbon dioxide are crossing a threshold which could lead to global warming beyond the “safe” level identified by the international community, fuelling a rise in sea levels. The latest reading shows a 30 per cent increase in carbon dioxide concentration in the global atmosphere since recording began in 1958. The first measurement was recorded as 315ppm. Carbon dioxide concentration exceeded 400ppm for the first time in 2013. Prior to 1800, atmospheric CO2 averaged about 280ppm, which demonstrates the effect of manmade emissions since the industrial revolution.

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“By 1935, with as few as 60 breeding individuals left, the situation was so dire that the right whale became the first cetacean to be protected by law.”

Facing Extinction, The North Atlantic Right Whale Cannot Adapt. Can We? (G.)

As if to confound everyone, this past week Dr Charles “Stormy” Mayo and his team from the Provincetown Center for Coastal Studies reported seeing up to 150 right whales in Cape Cod Bay. Dr Mayo – who has been studying these animals for 40 years and has a scientist’s aversion to exaggeration – is stunned. “It is amazing for such a rare and utterly odd creature,” he tells me. All the more amazing since he knows this great gathering could be a final flourish. By 2040, the North Atlantic right whale may be gone. He hesitates, then uses the e-word: extinction. How can such a huge mammal simply disappear within reach of the richest and most powerful nation on earth?

Shifting food sources – due to climate change – are leading whales to areas where maritime industries are unused to them. In the past 12 months, 18 rights have died after ship strikes or entanglement in fishing gear. With as few as 430 animals left, 100 of them breeding females in a reduced gene pool, the species is unsustainable. The right whale may be the strangest beast in the ocean. Vast and rotund, its gigantic mouth is fringed with two-metre strips of baleen, once “harvested” by humans to furnish Venetian blinds and corset stays but used by the whale to strain its diet of rice-sized zooplankton from the sea.

These bizarre animals are not easily known or imagined. They live far longer than us – like its Arctic cousin, the bowhead, the right whale may reach 200, perhaps more. Individuals could be older than constitutional America. They exist beyond us in time, dimension and experience. If we lose the right whale, we lose part of our planet’s biological history. [..] By 1935, with as few as 60 breeding individuals left, the situation was so dire that the right whale became the first cetacean to be protected by law. But by the start of this century, the numbers seemed to recover. Shipping lanes were shifted and fishing industries took on board the whale’s protected status. It even got its own air exclusion zone. “Like a Hollywood star,” as John Waters quipped to me.


Eubalaena glacialis with calf

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