Rome Archives - The Automatic Earth

Former House Speaker @NewtGingrich has the solution to stop rogue judges.

The Senate GOP needs to move immediately to get this done!pic.twitter.com/Sucn0c22GO

— Kyle Becker (@kylenabecker) April 24, 2025

Satan

WHAT???

Researchers in the UK already tested a geo-engineering program where they released sulfur dioxide into the atmosphere back in 2023.

The project is called satan (stratospheric aerosol transport and nucleation).

No, I'm not making this up.

This is evil.

— PeterSweden (@PeterSweden7) April 25, 2025

Lavrov
https://twitter.com/DD_Geopolitics/status/1915571315966435445

Harvard
https://twitter.com/VigilantFox/status/1915579807011660139

This is bullshit…https://t.co/yt7neyaywM

— Dave Collum (@DavidBCollum) April 24, 2025

USAID and the CIA helped orchestrate Trump’s impeachment

The evidence keeps coming out. American taxpayers paid for the impeachment of Donald Trump with laundered USAID money

Jesse Watters “You have this new piece on Substack that the USAID and the CIA helped orchestrate Trump's impeachment?”

Michael Shellenberger “It's a crazy story… pic.twitter.com/gyVfawoIL8

— Wall Street Apes (@WallStreetApes) April 25, 2025

‘sundance’ explains that the Ukraine constitution was changed right after Russia invaded, so Zelensky can now say all sorts of things are unconstitutional.

• President Trump Delivers Remarks on Ukraine/Russia Conflict (CTH)

President Trump hosted Norwegian Prime Minister Jonas Gahr Støre in the Oval Office and took questions from reporters on Thursday. The majority of the question from both the U.S. and Norwegian media encompass the current effort to negotiate a ceasefire in Ukraine. One of the ceasefire ‘sticking points’ per se’, is that immediately following the breakout of the conflict the government of President Zelenskyy changed many of their constitutional rules to include the legal elimination of opposition parties in the country, removal of religion or faith-based social influence that runs counter to the Ukrainian Nazi mindset, the cessation of elections in Ukraine, and other “emergency measures” intended to assist the stability of Zelenskyy’s government as they entered a war footing.

The results of the legal changes and constitutional framework, which included non-recognition of any lost territory, is now being leveraged by Zelenskyy in negotiations for a ceasefire. President Zelenskyy is now saying the ceasefire terms proposed, which include accepting regional losses of geography to Russia, are not constitutionally possible and he has no power to agree to them. In essence, Zelenskyy’s emergency government changed the constitutional power of the President, cemented a new constitutional status during war, and now says those previous changes make it impossible to accept proposed terms. This self-fulfilling creation, intentionally done with forethought for exactly this kind of current scenario, is the baseline for frustration toward the Ukraine position. President Trump notes this Ukraine position is frustrating, while thousands die weekly in the process.

“..if one country in Europe is forced to give up parts of its own legal territory… no country in Europe or elsewhere can feel safe, NATO or no NATO.”

• Trump’s Peace Plan Triggers ‘Concern’ Among Allies – CNN (RT)

Officials in Western Europe and Asia have claimed US President Donald Trump’s reported framework to end the Ukraine conflict could set a precedent for territorial conquest, CNN reported on Thursday, citing anonymous sources. The framework, which has not been officially confirmed by the White House, reportedly includes US recognition of Crimea as Russian territory and acknowledgement of Moscow’s control over large parts of four former Ukrainian regions that have joined Russia. US Vice President J.D. Vance has also stated that the administration is considering the option to “freeze the territorial lines at some level close to where they are today.” CNN cited several unnamed diplomats who criticized the proposed settlement, claiming it would “reward” Russian President Vladimir Putin and send a “dangerous message” to other leaders, including China’s Xi Jinping.

“This is about the fundamental principles of international law,” one Eastern European diplomat told CNN, claiming that “if one country in Europe is forced to give up parts of its own legal territory… no country in Europe or elsewhere can feel safe, NATO or no NATO.” Moscow has repeatedly denied having any intention to strike NATO or EU countries, or claim their territories, accusing Western officials of “fearmongering” in order to justify further militarization. Nevertheless, many Eastern European governments, such as Poland and the Baltic states, have cited the supposed threat of a Russian attack as justification for increasing defense budgets and deploying additional forces. The CNN report comes as US special envoy Steve Witkoff is expected to meet with Russian officials in Moscow for another round of talks in the coming days. Trump has warned that Washington could abandon its diplomatic efforts altogether if no significant progress is made in the peace effort soon.

Trump has publicly expressed frustration with Ukraine’s Vladimir Zelensky, whom he has accused of obstructing peace efforts by refusing to even consider any territorial concessions. At the same time, the US president has suggested that he has found Russia easier to negotiate with than Ukraine. Moscow has welcomed the Trump administration’s attempts to settle the conflict. Russian Foreign Minister Sergey Lavrov stated this week that Moscow and Washington are “moving in the right direction” with regard to reaching a peace deal. Russian officials have repeatedly said that Moscow remains open to a negotiated solution, but have emphasized that any peace agreement must reflect the territorial realities on the ground and address the root causes of the conflict.

Realism helps.

• Crimea Will Stay With Russia – Trump (RT)

The Crimean Peninsula will remain a part of Russia under a final settlement of the Ukraine conflict, US President Donald Trump has said in an interview with Time Magazine published on Friday. Crimea officially joined the Russian Federation in 2014 after a referendum that followed a Western-backed coup in Kiev. Ukraine and its backers have dismissed the results of the referendum as illegitimate, and Kiev has continued to claim sovereignty over the peninsula, vowing to take it back by any means necessary. In an interview to mark his first 100 days in office, Trump said Crimea “went to the Russians” long ago and suggested that “everyone understands” that Ukraine will not be able to get it back. “Crimea will stay with Russia” under a final settlement of the Ukraine conflict, Trump went on to say, adding that even Ukraine’s Vladimir Zelensky understands this.

“It’s been with them for a long time,” the US president stated, noting that Russia had its submarines there “long before any period that we’re talking about” and that the majority of Crimeans speak Russian. Trump also stressed that the peninsula was “given” to Russia by former US President Barack Obama, claiming that the whole conflict is “Obama’s war,” which “should have never happened.” Since returning to office in January, Trump has been pressuring both Moscow and Kiev to settle the conflict. During last year’s election campaign, he said he would end the hostilities “within 24 hours” of entering the White House. He told Time, however, that he said this “figuratively” as an “exaggeration.” Recently, Trump has signaled that he has grown frustrated with the lack of progress on reaching a resolution of the Ukraine conflict. He has expressed dissatisfaction with Zelensky, saying he has found Russia much easier to negotiate with than the Ukrainian leader.

In a Truth Social post this week, the US president criticized Zelensky for refusing to even consider any territorial concessions. Russia has expressed its appreciation for Trump’s peace efforts and has repeatedly indicated that it is open to negotiations. However, Russian officials have stressed that a final peace deal must respect the territorial realities on the ground and address the root causes of the conflict, such as Ukraine’s NATO aspirations. In his interview with Time, Trump acknowledged that Ukraine would likely never be able to join NATO. He cited Kiev’s ambitions to enter the US-led bloc as the issue that “caused the war to start.” “If that weren’t brought up, there would have been a much better chance that [the conflict] wouldn’t have started,” he said.

“the constitution of Ukraine says that all the temporarily occupied territories… belong to Ukraine.”

• Zelensky Contradicts Trump On Deal With Russia (RT)

President Donald Trump has claimed that “most of the major points” in an agreement to end the Ukraine conflict have been resolved, even as Vladimir Zelensky once again publicly rejected a reported key clause in the proposed US peace framework. Russian President Vladimir Putin held lengthy talks with US special envoy Steve Witkoff on Friday, described by Kremlin aide Yury Ushakov as “constructive and very useful.” Trump also expressed satisfaction with the negotiations, praising a “good day in talks and meetings with Russia and Ukraine.” “They are very close to a deal, and the two sides should now meet, at very high levels, to ‘finish it off.’ Most of the major points are agreed to,” Trump wrote in a post on Truth Social late Friday, adding that “SUCCESS seems to be in the future!”

The agreement proposed by Washington reportedly includes US recognition of Russian sovereignty over Crimea, a “freezing” of the conflict along the current front line, and acknowledgment of Moscow’s control over large parts of the four former Ukrainian regions that voted to join Russia. “Crimea will stay with Russia” under a final settlement of the Ukraine conflict, Trump said in an interview with Time Magazine published on Friday. However, in direct contradiction to Trump, Zelensky reiterated on Friday that Kiev will not even discuss formally recognizing Crimea as Russian territory. “Our position is unchanged: only the Ukrainian people have the right to decide which territories are Ukrainian,” Zelensky told reporters in Kiev, arguing that “the constitution of Ukraine says that all the temporarily occupied territories… belong to Ukraine.”

Zelensky went on to claim that his “vision” of a resolution includes more “sanctions, economic and diplomatic pressure” on Moscow – even as Washington’s peace framework reportedly includes a phased removal of restrictions imposed on Russia. Trump has previously blamed Zelensky’s public statements for harming the negotiation process and warned that he risks losing the entire country if he continues to stall talks with Moscow. The US-proposed deal would also reportedly prevent Ukraine from joining NATO, an ambition enshrined in Ukraine’s constitution. Kiev’s intention to join the US-led bloc likely “caused the war to start,” Trump acknowledged in his interview with Time.

The Kremlin has consistently said it remains open to diplomacy and has expressed gratitude for Trump’s peace efforts. Ushakov confirmed that Friday’s talks touched on the possibility of resuming direct bilateral negotiations between Moscow and Kiev, but offered no details. No direct talks between the two sides have taken place since Ukraine pulled out of the Istanbul negotiations in 2022. According to Putin, Zelensky – who has banned himself from engaging in talks with Moscow – is actively sabotaging any peace process, as it would require lifting martial law, which currently allows him to remain in power. Moscow maintains that without martial law, Zelensky would be compelled under the Ukrainian constitution to either hold elections or transfer presidential authority to the current speaker of Ukraine’s parliament.

“..Zelensky insisted that any future peace arrangement with Moscow must be backed by sustained US military, financial and political support.”

• Zelensky Demands ‘At Least’ Israel-style Support From US (RT)

Kiev expects Washington to provide long-term security assistance modeled on the US relationship with Israel, Vladimir Zelensky has claimed, after Ukraine’s European backers reportedly rejected several significant points of President Donald Trump’s proposed peace plan. Washington presented its draft deal to end hostilities between Kiev and Moscow during talks in Paris last week. At a follow-up meeting in London on Wednesday – which was downgraded at the last minute after Zelensky publicly rejected key US suggestions – Ukrainian officials and their NATO European counterparts reportedly tabled a counterproposal. Speaking to journalists on Friday, Zelensky insisted that any future peace arrangement with Moscow must be backed by sustained US military, financial and political support.

“Discussions in London have focused on security guarantees from the United States. We hope them to be at least as robust as those provided to Israel. Additionally, we anticipate support from our European partners and are actively developing the infrastructure necessary for these guarantees,” Zelensky said. Deliberations about an “Israeli model” of support for Ukraine first emerged during the presidency of Joe Biden, when Western officials began to acknowledge that Kiev was unlikely to be granted NATO membership. In lieu of collective security guarantees, they sought ways to at least ensure a long-term, uninterrupted flow of Western arms. Zelensky’s comments come amid increasing friction with Washington, as Trump pushes Kiev to accept what media outlets have described as his “final offer” to end the conflict.

Reports indicate that Washington’s framework includes freezing the conflict along current front lines and recognizing Crimea as Russian territory – a condition Zelensky has firmly rejected. Trump stated that “Crimea will stay with Russia” in an interview with Time Magazine on Friday. He argued that Kiev would never have enough weapons or manpower to retake the peninsula, which “was handed over to Russia without a shot being fired.” Crimea officially joined the Russian Federation in 2014 after a referendum held following a Western-backed coup in Kiev. “Our position is unchanged,” Zelensky reiterated on Friday, despite acknowledging Kiev’s dependence on continued American support.

Trump and other senior US officials have warned that if progress is not made soon, Washington may reconsider its role as a mediator and shift its focus to other global priorities. According to reports, Ukrainian officials are already bracing for the possibility of reduced American support should negotiations collapse. Moscow has consistently expressed willingness to engage in negotiations, conveying its gratitude for Trump’s peace initiatives. However, the Russian leadership has repeatedly stressed that it seeks a lasting solution to the crisis, saying a temporary halt in the hostilities would simply allow Ukraine’s Western backers to rearm its military. Any peace deal must acknowledge the territorial reality and address the root causes of the conflict, including Ukraine’s NATO aspirations, Russia has insisted.

“..due to the Vatican’s arrangements for the various delegations, Zelensky will be seated “very, very far away” from Trump during the funeral ceremony.”

And Meloni doesn’t need it either. The security operation in Rome today is on her. Her plate is full.

• Ukraine ‘Pressuring’ Italy For Sideline Summit At Pope’s Funeral (RT)

Kiev is reportedly “pressuring” Rome to organize a mini-summit on the Ukraine conflict on the sidelines of Pope Francis’ funeral this week. Around 140 delegations are expected at the Vatican on Saturday morning to pay their final respects to the late pontiff, who passed away on Monday. Ukraine’s Vladimir Zelensky will be in attendance, as will US President Donald Trump. Diplomatic sources cited by La Repubblica on Friday said Trump may hold a few informal bilateral meetings in Rome, potentially including with Zelensky. Meanwhile, Kiev is advocating for a broader multilateral gathering involving European NATO members to be held in Italy, putting the Ukrainian delegation in front of the USA, Italy, France, Great Britain and probably also Germany.

However, Prime Minister Giorgia Meloni’s government is hesitant to facilitate such a gathering, fearing that the country’s reputation as a host could suffer from its likely failure, the outlet noted. Sources described the situation as “fluid.” This month, American officials outlined a potential framework for a truce that they believe Moscow could accept. However, Ukraine reportedly rejected key aspects of it, and in collaboration with European backers, proposed an alternative plan this week. Trump has accused Zelensky of undermining the peace process with public remarks that directly contradicted the ideas his administration reportedly included in its proposal.

A Trump-Zelensky meeting at the White House in late February ended in a diplomatic spat when the Ukrainian leader openly questioned Washington’s approach to mediating the conflict. Vice President J.D. Vance, who was present at the scene, admonished Zelensky for what he perceived as ingratitude and disrespect. La Repubblica noted that, due to the Vatican’s arrangements for the various delegations, Zelensky will be seated “very, very far away” from Trump during the funeral ceremony.

Zelensky simply denies ever receiving half of the money. That should be about the amount that vanished?! “Hey, not our fault”

• Elon Musk Mocks Zelensky For Claiming Every US Taxpayer Dollar Is Accounted For (ZH)

Ukrainian President Volodymyr Zelensky has hilariously declared that every single dollar of U.S. taxpayer money sent to Ukraine since Russia’s 2022 invasion has been meticulously tracked and accounted for, dismissing concerns about corruption or misuse. The claim, one of his most audacious yet, came during an interview with Daily Wire co-founder and conservative podcaster Ben Shapiro. Shapiro, known for his interventionist views regarding foreign affairs, pressed Zelensky on the issue of transparency, zeroing in on the nearly $200 billion in U.S. aid allocated to Ukraine’s defense. “There’s lot’s a questions about where the money is going pensions, to war profiteering, to corruption,” Shapiro noted, before asking: “What kind of transparency can you provide to the American people to guarantee that there taxpayer dollars are being used in the best possible way to fight Russia and defend Ukraine, and to ensure, if the United States wants, would an audit be possible by the United States for where those dollars are going?”

“As for the audit, the United States has the understand there’s United States inspectors working, there’s inspectors of European countries, because we’ve also allocated their money and grateful to them,” Zelensky replied. “That is why we told them at once we’re ready to have any inspections from the very beginning of the way, inspectors coming from the United States, Europe, and our own inspectors.” “We have complete reporting and accounting, absolutely transparent within the ministry of defense,” the Ukrainian president added. “There’s access to all the figures starting from the very first year of the war.” Zelensky then claimed that Russian “fake news” aimed at undermining U.S. aid to Ukraine was a primary reason for maintaining a comprehensive accounting of all American taxpayer funds provided to his government for the war.

“There’s nothing to hide, we’re absolutely open,” Zelensky told Shapiro. “There’s all the reports available.” Zelensky’s comments prompted Sen. Mike Lee (R-UT), an opponent of additional U.S. aid to Ukraine, to ask his nearly 600,000 followers on X if they believed the Ukrainian president’s claims. “Funniest thing I’ve read all day,” billionaire Elon Musk tweeted in response, with a pair of laughing emojis.

https://twitter.com/elonmusk/status/1915562708264771665?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1915562708264771665%7Ctwgr%5E65156ec4eccd8c9b49e6ec040010947d6d39dff2%7Ctwcon%5Es1_c10&ref_url=https%3A%2F%2Fwww.zerohedge.com%2Fpolitical%2Ffunniest-thing-ive-read-all-day-elon-musk-mocks-zelensky-claiming-every-us-taxpayer

Not only does Zelensky maintain that Ukraine’s handling is U.S. aid is corruption-free, but he’s suggested in an interview with podcaster Lex Fridman that corruption was an issue in the West. Kyiv Independent reports: “Ukraine has received less than half of the $177 billion in U.S. aid allocated to support Kyiv throughout the full-scale war, according to Zelensky. He suggested that this shortfall could be tied to issues of corruption or lobbying by U.S. companies. “If we had $177 billion and if we get the half, where is the second half? If you find the second half, you will find corruption,” he said. While Ukrainian President Volodymyr Zelenskyy firmly denies corruption allegations, Nigerian President Muhammadu Buhari claims the Russia-Ukraine conflict is fueling an influx of arms and fighters into the Lake Chad region, strengthening terrorist groups.

Of note, in 2015, The Guardian ranked Ukraine “the most corrupt nation in Europe.” VOA reported in November 2022: “Buhari called for more vigilance and cooperation among the commission’s six member nations against the increased proliferation of weapons into the Lake Chad basin. He said weapons meant for the Ukraine war and to combat terrorism in the Sahel are being diverted to West Africa and ending up in the hands of terrorist groups. Zelensky’s comments about U.S. aide comes as President Donald Trump is intensifying efforts to broker peace between Russia and Ukraine, with recent London talks pushing a ceasefire that would freeze frontlines and cede Crimea to Russia. Zelenskyy resists the plan, calling it unconstitutional, but Trump remains optimistic. On Thursday evening, Russian Foreign Minister Sergey Lavrov told CBS News that the Kremlin is “ready to reach a deal” with the U.S. regarding Ukraine, but cautioned that some of the terms need to be “fine tuned.” “The President of the United States believes, and I think rightly so, that we are moving in the right direction,” Lavrov told the news outlet.

“U.S. Treasury Secretary Scott Bessent warned a US-China trade deal could take 2 to 3 years to finalize..”

• Who Blinks First? China May Exempt Tariffs On US Ethane & Other Goods (ZH)

Those sources continued down Beijing’s laundry list of potential tariffs to be removed, including waiving the tariff for plane leases… Boeing has caught a sigh of relief. “It’s another step toward a de-escalation of the trade war,” said Kok Hoong Wong of Maybank Securities, adding that a trade deal might not be imminent, but certainly, “it would appear the worst may truly be over.” Bloomberg Economics analysts Chang Shu and Eric Zhu commented on the BBG headline: “Exempting critical, hard-to-replace U.S. products from tariffs would be a pragmatic approach that could ease tensions with the U.S. and serve the interests of Chinese industry. Anything that helps lower the temperature in the trade war is also beneficial from the perspective of avoiding broader clashes with the U.S.”

In a separate report, Reuters stated that instead of merely considering exemptions, Beijing has already “exempted” certain U.S. imports from the 125% tariff, citing businesses that were notified by authorities about the change. “As a quid-pro-quo move, it could provide a potential way to de-escalate tensions,” said Alfredo Montufar-Helu, a senior adviser to the Conference Board’s China Center. Montufar-Helu warned: “It’s clear that neither the U.S. nor China want to be the first in reaching out for a deal.”

Earlier in the week, U.S. Treasury Secretary Scott Bessent warned a US-China trade deal could take 2 to 3 years to finalize. Bessent emphasized at a closed-door investor meeting on Tuesday: “No one thinks the current status quo is sustainable, at 145% and 125%, so I would posit that over the very near future, there will be a de-escalation. We have an embargo now on both sides.” Both sides may want a deal to avoid further tariff fallout in their respective economies, but neither wants to appear desperate on the global stage. China is grappling with shuttered factories and possible ethane supply woes that threaten to roil its core manufacturing economy, while in the U.S., containerized volumes through the Port of Los Angeles are poised for a steep decline in the coming week.

Shapiro knows better.

• How Not to Fight a Trade War (Ben Shapiro)

This week, the stock market yo-yoed wildly, taking investors on a roller coaster of stunning lows and sudden highs. Rarely has investment been so gut-churning. And the reason for the turbulence is obvious: the Trump administration’s continuing mixed signals over its trade war. When that trade war was first announced on April 2 (“Liberation Day”) the Dow Jones Industrial Average immediately plummeted nearly 4%; the day after, 5.5%. After President Donald Trump put a hold on the vast majority of tariffs the following week, it recovered nearly 8%. The following day, as markets realized that Trump would retain massive tariffs on China and highly elevated tariffs on many of our allies, it dropped again 2.5%. The Dow Jones Industrial Average remained volatile but close to even for a few days. And then to open this week, it dropped almost 2.5% again, thanks to Trump’s apparent threats to fire Federal Reserve Chairman Jerome Powell.

And then, on Tuesday, it rose again, 2.7%—this time based on Treasury Secretary Scott Bessent’s leaked statements implying that the United States would come to a trade agreement with China (a sentiment seconded by Trump), as well as Trump’s statements that he would not be firing Powell. What is the purpose of recapping this potted history? To understand a simple lesson: Volatility in policy results in market volatility. Market volatility results in lack of investor confidence. And lack of investor confidence results in economic disaster. Typically, stock prices and bond yields work in inverse, since people flee to safety from stocks to bonds, driving down yields. Yet even as the Dow Jones is off approximately 13% from its high just after Trump’s inauguration, bond yields have been climbing as well—meaning that investors are showing lack of confidence in investing in American assets.

Now, taking on China is an admirable goal. And trade is certainly a chief weapon the United States could use in containing Chinese aggression across the world. But to wage a successful trade war on China would require certain preliminary steps: negotiation of strong and stable trade relationships with allies to box in China rather than a declaration of trade war on everyone; time to reshore critical national security industries and resources and to solidify non-Chinese supply chains; a military buildup capable of deterring Chinese action against Taiwan, which—based on the destruction or capture of semiconductor giant TSMC—could plunge the entire world into a depression and easily leave China itself at a technological advantage over the West.

The Trump administration did not do this preliminary groundwork. And so, the White House has been forced to punch holes in its own tariff regime, from exempting Apple products and semiconductors to unilaterally abandoning tariffs on erstwhile allies to deploying Bessent to pledge to lower tariffs on China itself. Impulsive decision-making can be an asset in foreign policy; it’s often smart to keep our enemies on their toes, unsure of what comes next. But in economic policy, impulsivity and unpredictability lead to chaos. And it’s far easier for the markets to lose trust in policymakers than to regain it. China must be contained, and Trump has been singularly transformative in forcing the world to face up to that fact. But if he wishes to truly defeat China in the economic sphere, it’s time for solid, understandable, and methodical policy that achieves the goals Trump has correctly set forth.

Pepe’s still in China, in body and in mind. But even he does see a few problems.

• China, Hong Kong and The Art of Blinking (Pepe Escobar)

So, predictably, Captain Chaos did blink first. As much as he – and his sprawling media circus – could not possibly admit it. It all started with “tariff exemptions” – from smartphones and computers to auto parts – on products imported from China. Then it veered towards carefully manicured leaks implying tariffs “could” be reduced to a range between 50% and 65%. And finally a terse admission that if there’s no deal, a “tariff number” will be unilaterally set. China’s Ministry of Commerce was unforgiving: “Trying to trade away others’ interests for temporary gains is like bargaining with a tiger for its skin – it will only backfire”. And it got fiercer. The Ministry was adamant that any Trump 2.0 claims of any progress on bilateral negotiations have “no factual basis” – de facto depicting the US President as a purveyor of fake news.

Tigers, tigers burning bright: the image does not recall poetry superstar William Blake, but Mao’s legendary depiction of the US Empire as a “paper tiger” – a flashback that struck me over and over again last week in Shanghai. If the US Empire was a paper tiger already in the 1960s, the Chinese argue, imagine now. And the pain will increase, not only for the paper tiger: any dodgy deals made by foreign – vassal – pussycat governments at the expense of Chinese interests simply will be not be tolerated by Beijing. Last week in Shanghai I was reminded over and over again – by academics and business people – that the weaponized Trump Tariff Tizzy (TTT) goes way beyond China: it is a desperate offense ordered by the US ruling classes against a peer competitor that scares the hell out of them.

The best Chinese analytical minds know exactly what’s going on in Washington. Take for instance this essay originally published by the influential Cultural Horizon magazine breaking down the “triangular power structure” of Trump 2.0. We have all-power Trump forming a “super-establishment”; Silicon Valley money politics, represented by Elon Musk; and the new right-wing elite represented by VP J.D. Vance. End result: a “governance system that is almost parallel to the federal government.” European chihuahuas – caught in the crossfire of Trump 2.0 – are simply incapable of such synthetic and precise conceptualization.

Paper tiger meets fiery dragon What a deep dive in Shanghai has revealed is that China has been handed over a rare earth-like opportunity by Trump 2.0 to consolidate its strategic initiative solidifying the role of leader of the Global South/Global Majority, at the same time carefully managing the risk of a New Cold War. Call it a Sun Tzu move that may paralyze the Empire in its tracks. Professor Zhang Weiwei, with whom I had the pleasure to share a seminar in Shanghai on the Russia-China strategic partnership, would agree. China is on the move across the spectrum. Chinese Premier Li Qiang sent a letter to Japanese Prime Minister Shigeru Ishibe urging a joint drive, right now, to counteract the tariff dementia.

President Xi’s top message in his Southeast Asia tour last week was to stand up against “unilateral bullying”. Xi deftly moved between Malaysia – current rotating chair of ASEAN, always avoiding taking sides – and Vietnam – with its “bamboo diplomacy” always hedging between US and China. Xi told Malaysia’s Prime Minister Anwar Ibrahim, directly: “We must safeguard the bright prospects of our Asian family”. Translation: let’s create an exclusive sphere of influence close to the ‘community of shared destiny’ but that does not include outside powers such as the US. In parallel, there has been a strong debate – from Shanghai to Hong Kong – that transcends the role of China as the world’s factory: what matters now is how to redirect some of China’s astonishing manufacturing capacity towards the domestic market.

Of course there are problems – such as the lack of purchasing power among scores of Chinese domestic consumers, even as the bulk of national China income is directed to fixed-asset investments. A great deal of China’s rural elderly population survives on a monthly pension of roughly $30 a month, and the hourly rate for the gig economy has stagnated at around $4. Meanwhile, in several high-tech fronts, China just built the fastest high-speed train on the planet: 400km/h, soon to run between Beijing and Shanghai. China is already receiving orders for the C919 commercial wide-bodied airliner. And China has come up with the world’s first thorium-powered nuclear reactor. Translation: unlimited cheap and clean energy is at hand.

Wonder where they would send them.

• Netherlands To Create Trial Detention Areas For Troublesome Asylum Seekers (RMX)

Dutch Asylum Minister Marjolein Faber, of the Party for Freedom (PVV), is initiating trial detention areas for disruptive asylum seekers in the Ter Apel registration center, as well as restrictions on where they can go, De Telegraaf reports. A trial “process availability location” (PBL) will be created in Ter Apel to detain “disadvantaged” asylum seekers who misbehave on public transport or shoplift. They must report there twice a day, may only stay in and around the asylum seekers’ center, and will be banned from entering residential and village areas. Faber adds that anyone who does not comply with the rules can be locked up.

“The behavior of a group of disruptive and criminal asylum seekers who abuse the hospitality offered in the Netherlands and cause nuisance and damage is, in whatever form, absolutely unacceptable,” said Faber. The PVV minister is taking action after the majority in the Dutch House of Representatives agreed that repeatedly disruptive asylum seekers need to be dealt with more quickly and severely. Her suggestion for the PBLs comes after her predecessor, Eric van der Burg (VVD), tried to do the same but had to stop it after a court ruling

Faber claims this will help get those migrants with behavioral problems — and little chance of being granted asylum — out of the Netherlands faster. The PBLs will help keep an eye on them and record their behavior as (and if) it deteriorates, she says. The new PBL in Ter Apel is specifically designed for lighter forms of nuisance and recidivism, such as shoplifting. Although not strict enough in cases demanding even tighter security, they are sufficient to justify restricting freedom. “It is unacceptable that asylum seekers who come to our country for safety, intimidate residents, and cause insecurity. These troublemakers deserve the toughest possible approach. I will not tolerate any nuisance. Not now. Not ever,” she posted on X.

“Golden Dome.”

• Trump Might Be About to Make Reagan’s Dream Come True (Green)

Acting on President Donald Trump’s promise of a “Golden Dome” against nuclear attack, the Republican Congress just placed a yuge down payment on fulfilling President Ronald Reagan’s dream of strategic missile defense. Congressional Republicans on Thursday announced a supplementary defense spending package, including $27 billion for Trump’s Golden Dome. In addition to funds for 14 new anti-missile warships, the bill includes money for the Army’s Terminal High Altitude Area Defense (THAAD) anti-missile systems, and “Elon Musk’s SpaceX and partners are expected to play a key role in missile tracking infrastructure.” When Reagan announced his Strategic Defense Initiative (SDI) in 1983, it started with some pretty crazy-sounding proposals that were nearly impossible then and aren’t much more likely now. Things like a network of orbital laser platforms and particle beam weapons, plus “smart rocks” and even “brilliant pebbles.”

That last one caught my imagination as a teen and never let go. But here’s the thing: If you throw enough time, money, and engineering talent at a problem, Americans will eventually find solutions. SDI — now known as Ballistic Missile Defense (BMD) — has come a long way since 1983. In addition to the Navy’s AEGIS systems that can shoot down anything from airplanes to satellites, we have a couple of Army land-based systems, and more on the way. Plus, some entertainingly fancy radars and satellites to detect threats and tie together the different defensive layers. One thing that hasn’t changed since 1983 is just how expensive it is. While we do have effective BMD systems, we have too few. We can (probably) defend against a small-scale nuclear attack from a rogue nation like North Korea, but that’s about it. Reagan’s dream of protecting our cities from nuclear destruction remains a dream — for now.

Reagan White House Photographs, 1/20/1981

“At least 70 or 80% of the resources applied should be going toward a system that will not evidence itself during the Trump administration,” Mark Montgomery, senior director of FDD’s Center on Cyber and Technology Innovation, cautioned. So, before you get too excited, experts say that deploying a nationwide BMD network will be an “intergenerational” project. Congress’s new budget priorities, however, are a big step in the right direction. It isn’t often appreciated, but for years, we’ve had mobile missile defense platforms that are quite good — the Navy’s guided-missile ships. The Navy took a keen interest in negating airborne threats on Dec. 7, 1941, and that interest grew only more keen after the Japanese developed kamikaze tactics. An anti-ship missile is basically an unmanned kamikaze.

So a lot of what a modern warship does is already missile defense, and a nuclear warhead is basically a very fast, very small missile. It’s more difficult to hit, sure, but the concept — one the Navy has worked on longer than I’ve been alive — is no different. The Navy’s SM-3 Standard Missile (they have got to come up with cooler names) has been in service since 2014 and can shoot down incoming nuclear warheads or even enemy satellites. Depending on the model and its capability, a single SM-3 costs between $10 million and $28 million, so we’ve only produced about 400 for us and our allies. But if you think an SM-3 is expensive, try losing a city. Reagan’s critics never seemed to understand any of this, or pretended not to for political advantage. I don’t have to imagine leaving this country open to a nuclear attack just to win a few votes because I witnessed it.

Let me finish with an anecdote that highlights how good even our limited number of BMD systems are. After retiring from the Air Force, my father-in-law spent almost 20 years working for a small BMD contractor. He had a list of clearances as long as your arm, so one of his jobs was coordinating between the disparate elements required to make BMD work, usually out of Pearl-Hickam in Hawaii. There wasn’t a room he wasn’t cleared to enter. A decade or so ago, I sketched out a scenario for him where China used long-range, hypersonic missiles across the Pacific in a theater-wide sneak attack against our naval and air bases. “I’d like to see them try,” he said with his undiminished fighter-pilot confidence. It’s nice knowing that our men and women in uniform at vital installations around the world enjoy some BMD protection. It will be nicer still when every city in America does. That won’t come soon, and it certainly won’t come cheap, but Reagan would have loved it.

” This isn’t just an interview—it’s a reckoning.”

• You Won’t Believe Who Trump Granted an Interview (Margolis)

President Trump made a huge announcement Thursday, and I’m still trying to wrap my head around it. “Later today I will be meeting with, of all people, Jeffrey Goldberg, the Editor of The Atlantic, and the person responsible for many fictional stories about me, including the made-up HOAX on “Suckers and Losers” and, SignalGate, something he was somewhat more ‘successful’ with,” Trump announced in a post on Truth Social. Jeffrey Goldberg, the notorious editor of The Atlantic who’s made a career out of publishing anonymous hit pieces against Donald Trump, is finally going to have to look President Trump in the eye. And boy, is this going to be interesting.

Trump, displaying his characteristic boldness, announced he’ll be sitting down with Goldberg and his cadre of liberal scribes, including Michael Scherer and Ashley Parker— neither of whom could be mistaken for MAGA supporters. It’s like walking into the lion’s den, except these lions have a history of making up stories out of thin air. According to Trump, the story being written will be titled “The Most Consequential President of this Century.” Let’s not forget Jeffrey Goldberg’s hall-of-shame reporting, starting with the infamously debunked cemetery smear against President Trump—a story denied by 25 witnesses, including Trump critic John Bolton. The most recent, of course, is the “Signalgate” kerfuffle, which was another flimsy hit piece the media eagerly seized on in a failed attempt to oust Defense Secretary Pete Hegseth.

Goldberg’s reporting style is all too familiar by now: a revolving door of anonymous sources and conveniently unverifiable claims that crumble under scrutiny, but are repeated ad nauseam by the liberal media as fact. But here’s what makes this deliciously ironic: Trump is doing this interview from a position of absolute strength. He’s already secured his place in history with a second term, while Goldberg and his mainstream media cohorts are no doubt still nursing their wounds from years of failed attempts to take him down. What’s Goldberg going to do when he can’t hide behind anonymous sources? When he has to actually face the man he’s spent years attacking through the safety of his keyboard? This isn’t just an interview—it’s a reckoning.

The liberal media elite have spent years constructing their anti-Trump narrative from the comfort of their coastal bubbles. Now, one of their chief architects will have to defend his “journalism” face-to-face with his favorite target. For conservatives who’ve watched the mainstream media’s relentless assault on truth, this meeting represents something larger than just another interview. It’s a moment of accountability, where one of the most egregious practitioners of fake news has to confront reality in real-time.

As Trump himself put it, he’s doing this “out of curiosity, and as a competition with myself.” The real question isn’t whether The Atlantic can write a fair story—we all know the answer to that. The real show will be watching Goldberg squirm when he has to defend his “reporting” to the very person he’s spent years maligning with fake stories. Get your popcorn ready, patriots. This is going to be wild.

“..America witnessed a 600% increase in sex trafficking, while over 10.5 million people entered illegally. A quarter-million Americans have died from fentanyl flooding across our open borders. The brutal Tren de Aragua gang now plots assassinations on U.S. soil.”

• We Need to Reclaim Our Country’s Soul From the Radical Left (Margolis)

In a stunning display of misplaced priorities, Democratic lawmakers recently traveled to El Salvador—not to address the border crisis devastating American communities, but to advocate for MS-13 gang member Kilmar Abrego Garcia. This disturbing development perfectly encapsulates how far the Democratic Party has strayed from protecting American interests. The same Democrats who rushed to El Salvador to defend a gang member remained conspicuously silent when Laken Riley, a 22-year-old nursing student, was brutally murdered by an illegal alien on her college campus. They offered no words of comfort when 18-year-old Jocelyn Nungaray was found dead in a San Diego canyon, raped and murdered by two illegal immigrants. And where were their impassioned speeches about “due process” when Rachel Morin, a mother of five, was murdered on a hiking trail by an illegal alien with a violent criminal history?

Border Czar Tom Homan and former Trump advisor Stephen Miller have both exposed the dangerous hypocrisy of these actions. While Sen. Chris Van Hollen (D-Md.) claims he’s merely defending “due process,” the facts tell a different story. Garcia’s own wife has accused him of domestic abuse, and he’s been accused of MS-13 gang affiliation. And then there are his connections to human trafficking. “The Democrat Party has become the party of terrorists and illegal aliens,” Miller declared during a recent Fox News appearance. “Who does it fight for? Who does it move heaven and earth to protect? Illegal alien gang members and foreign terrorists.” The statistics are damning: Under the Biden administration, America witnessed a 600% increase in sex trafficking, while over 10.5 million people entered illegally. A quarter-million Americans have died from fentanyl flooding across our open borders. The brutal Tren de Aragua gang now plots assassinations on U.S. soil.

“Where were you when thousands of American parents buried their children?” Homan demanded of the Democrats during a recent appearance on Sean Hannity’s show. “They got separated from their children forever ’cause they were killed by illegal aliens. That’s preventable crime.” The graves of Laken Riley, Jocelyn Nungaray, and Rachel Morin stand as stark testimonies to this preventable tragedy.Even more shocking, Van Hollen spent taxpayer money to meet with Garcia while ignoring murders committed by illegal aliens in his own state—released despite ICE detainers. During Biden’s presidency, Van Hollen never once visited the border to witness the catastrophe firsthand or spoke with the family of Rachel Morin, one of his actual constituents.

The American people face a critical choice. We can either stand with those working to secure our borders and protect our communities or watch as radical Democrats continue dismantling our national security to protect criminals and terrorists. We need your help to expose the radical left for their indifference to the safety and security of this country and its citizens.

Some people…

• Berlin Labor Minister Says Tesla Cars Are ‘Nazi Cars’ (RMX)

Berlin Senator Cansel Kiziltepe, of the Social Democratic Party (SPD), decided to attack Elon Musk on X, comparing his Tesla cars to “Nazi cars,” creating a massive backlash in the neighboring state of Brandenburg, home to Europe’s only Tesla car factory. The post is particularly odd, given her role as state minister for labor. “Who wants to drive a Nazi car? Manufacturers of electric cars are experiencing a sales boom – apart from Tesla,” according to Welt. Brandenburg’s Minister of Economic Affairs Daniel Keller (also SPD) called on her to retract the statement.

“Such a Nazi comparison hurts the people who work there and is completely inappropriate for a labor senator,” Keller told the dpa news agency. “I expect the labor senator to retract her historically unacceptable comparison and return objectively to the major economic and labor market policy challenges that Berlin and Brandenburg should tackle together.” Keller continued, saying, “Everyone can have their own personal opinion about Elon Musk. But it’s important to me that we don’t forget the people behind the Tesla factory in Grünheide. 11,000 people from 150 nations work here – more than half of the employees live in Berlin.”

Senator Kiziltepe still has a more diplomatic statement posted regarding the electric car company: “Tesla is currently experiencing a sales slump because customers attribute the right-wing extremist positions of its shareholder Elon Musk, who holds around 13% of the company,” she wrote. “I explicitly stand by my assessment of Elon Musk. Of course, this does not mean that I hold Musk’s employees or customers responsible for his political positions,” she added. But not everyone felt this was enough, especially given her comment was seen by most as potentially endangering jobs. “Denigrating the Tesla as a Nazi car shows what you’re really like. Full of hate and division. Simply disgraceful. Better to eliminate all jobs in Germany. You’d like that, wouldn’t you? After all, we’re paying you,” reads one reply.

“Are you still a senator, or have you already resigned to avert further damage to your office and democracy after your unspeakable trivialization of the Nazis? If not, you should do so immediately” another commenter posted.“Yeah, everyone knows by now that you hate Elon Musk. What are the reasons for your hatred? As a civil servant, don’t you have better things to do than vent your hatred online? another X user asked. Tesla has become the largest employer in Brandenburg in Grünheide, with some 11,500 people working there. The jobs at its Gigafactory, which opened just three years ago, are permanent with good salaries. The automaker’s net profits took a hit last quarter; the drop in sales is attributed to both a model change as well as controversies surrounding Musk’s politics.

“Brandenburg and Berlin benefit from this in terms of employment and value creation,” AfD deputy leader Stephan Brandner told the “Rheinische Post” newspaper. The Berlin-Brandenburg Business Association (UVB) also called out the comparison for insulting Tesla employees and scaring away new investment, not to mention hurting Kiziltepe’s own re-election. Managing Director Alexander Schirp stated that such defamation was unworthy of a member of the Berlin Senate. “This doesn’t increase the manufacturer’s chances of investing in the capital. Statements of this magnitude do not bode well for the election campaign,” the UVB MD said.

“..the transatlantic partnership has been built over so many decades that we will not get carried away by the statement of tariffs..”

• German Finance Minister Says Trust Not Yet Broken With US (CNBC)

The trust between Europe and the U.S. is not yet broken despite President Donald Trump’s aggressive tariff policies, Joerg Kukies, acting German finance minister, told CNBC Thursday. “For trust to be broken, a lot more would have to happen because the transatlantic partnership has been built over so many decades that we will not get carried away by the statement of tariffs,” he told CNBC’s Carolin Roth on the sidelines of the IMF World Bank Spring Meetings. Kukies added that during a previous visit to Washington, soon after the 25% tariffs on all cars imported to the U.S. was announced, there did appear to be interest in coming to an agreement. Europe and the U.S. have different interests and both parties need to understand one another’s viewpoints, he said. “But this is not the first time ever that the United States and Europe are negotiating over tariffs, so I don’t think we’re anywhere near a crisis moment.”

Kukies struck a positive tone when referring to talks, saying “everything is going in negotiation mode” with the bloc “optimistic” that it can resolve the differences. A zero-for-zero tariff agreement would be his preferred outcome, Kukies stated. This aligns with what European Commission President Ursula von der Leyen has advocated for. However, Trump has already rejected a proposal from the European Union for a deal which would see zero percent duties on industrial goods imported from the U.S. as well as on imports from the EU. Germany is currently subject to 10% tariffs — the temporarily reduced rate announced by Trump after the initially imposed 20% duties. The country’s struggling economy is heavily reliant on trade, as the U.S. serves as its most important trading partner. Tariff turmoil led by Trump is therefore expected to hit Germany especially hard.

Earlier on Thursday, the German government revised its forecast for the country’s economic growth lower, saying it was now expecting stagnation in 2025. This compares to January’s estimate of 0.3% growth. Acting economy minister Robert Habeck in a press conference cited U.S. President Donald Trump’s trade policies and their impact on the German economy as the main reason for the downward revision. The IMF in its latest World Economic Outlook, which was published earlier this week, also cut its expectations for the German economy with the body now projecting a 0.2% contraction.

Germany’s economy has been struggling for some time, contracting in both 2023 and 2024 on an annual basis. The country has however avoided a technical recession, which is characterized by two consecutive quarters of contraction. The latest GDP data is slated to be released next week. There could however also be some positives on the horizon after a major fiscal package, which could lead to a major investment boost, was enshrined in Germany’s constitution earlier this year. It included changes to the long-standing debt brake rule that are set to enable higher defense spending, as well as a 500 billion euro ($569 billion) infrastructure investment fund. Germany’s debt brake limits how much debt the government can take on and dictates the size of the federal government’s structural budget deficit

“In order for a system to be stabIe, it requires negative feedback, also known as consequences.” —Barrie Drain

• Where Things Stand (James Howard Kunstler)

“Fighting fascism,” for the American Jacobins who lead the Democratic Party, means opposing any attempt to flush the corruption out of the entrenched bureaucracy, just as their pet phrase “our democracy” actually refers to the matrix of grift and despotic activism that drives their political operating system. That is exactly how and why the USAID was so crucial to spread captured taxpayer spoils as NGO salaries for the gender studies grads to play “activist,” so as to inflict their special brand of sadistic power madness over the land — to keep the game going. Now, USAID is scattered to the winds and all they have left is their installed base of federal judges and the horde of lawfare lawyers who feed them bogus cases to halt the remaining work of Mr. Trump’s executive branch clean-up operation.

Remember: Robespierre, leader of the Jacobins in the French Revolution, was a lawyer. Their version of defending “our democracy” in 1793 was the Reign of Terror that sent at least 17,000 political opponents to the guillotine. Rep. Jamie Raskin (D-MD) is the Democrats’ Robespierre. He is promising his own reign of terror when his party recaptures Congress in the 2026 “midterm” election. Norm Eisen is his chief lawyer and legal strategist. His sole aim is to recapture power in order to restore the Democrats’ sadistic regime of thought-control and the money-flows that feed it. That’s where things stand for the moment. You can sense how this tension is tending toward something that looks like civil war.

In the House, Rep. Darrel Issa (R-CA) has introduced the No Rogue Rulings Act of 2025 (HR 1526, passed on April 9) to complement Sen. Grassley’s bill. The Constitution is somewhat vague about the composition of a federal judiciary below the Supreme Court, and essentially leaves the matter to Congress to set parameters for the power of federal judges. Congress can also alter or abolish districts, such as the DC federal district from which so much partisan Democratic Party lawfare has emanated under political activist Judges James Boasberg, Amy Berman Jackson, Tanya Chutkan, and Beryl Howell (all of them involved in the sadistic prosecutions of J-6 defendants).The bills from each house next must go through a reconciliation process that boils them down to a single piece of legislation that can be sent to Mr. Trump for the presidential signature. The House passage is likely assured.

The hang-up is that under Senate rules, the Democrats could mount a filibuster that would require 60 votes to break. The Republicans only control the chamber by a 53 to 47 majority, and no Democrats have signaled any intention to vote in favor of such a bill. In any case, the entire process would take months and might not succeed at all. A much simpler remedy would be for the Supreme Court (SCOTUS) to rule in any of a number of cases now on their docket that the lawfare antics of the federal judges amount to interference with an independent executive branch — in short, that the judiciary can’t usurp the executive powers of the President, which include the conduct of foreign policy, the ability to manage personnel in executive agencies, and certain issues around the spending of taxpayer dollars.

A different sort of remedy would be the application by the DOJ of federal statute 18 USC 371, Conspiracy to Defraud the United States against Norm Eisen and his colleagues-in-lawfare for attempting to maliciously bury the executive branch in litigation for the purpose of nullifying the executive powers of the president. Beyond all that is the abyss: a nullified election, a paralyzed chief executive, and a constitutional crisis that has the potential to lead to civil violence. The Democrats seem willing to go there, perhaps even avid for it. The Jacobins of 1793 were mad for blood, too, and they spilled a whole lot of it. By the summer of 1794, the blood was finally spouting out of their own necks. . . and then the Jacobin reign of terror came to a sudden and complete end. Heed their example.

But they’re not done yet. Got to have that giant NATO base.

• Cancelation of Romania’s Presidential Election Overturned (RT)

An appeals court in Romania has suspended the Constitutional Court’s decision to annul the results of the first round of last year’s presidential election, which was won unexpectedly by independent candidate Calin Georgescu, local media outlets reported on Thursday. Georgescu, a vocal NATO critic and opponent of arming Ukraine, made the headlines in November 2024 after securing 23% of the vote in the first round of the election. The Constitutional Court later invalidated the results, citing “irregularities” in his campaign and intelligence reports alleging Russian interference – which Moscow has denied. On Thursday, Judge Alexandru Vasile of the Ploiesti Court of Appeal overturned the annulment, according to HotNews. The prosecutor’s office attached to the Ploiesti court has filed an appeal.

George Simion, the leader of the Alliance for the Union of Romanians party, welcomed the decision as a “return to democracy” and constitutional order in a post on X. He added, however, that the Central Electoral Bureau – which barred Georgescu from running in May – “ignores it and continues its activity.” In February, Georgescu was indicted on six criminal charges, including allegedly plotting “anti-constitutional acts” and “promoting fascist, racist, or xenophobic ideologies.” He has denied all the charges, insisting the criminal case against him is part of a campaign orchestrated by the Romanian “deep state.”

The politician, who is under a 60-day travel ban as part of judicial oversight, will remain under court supervision for another 60 days, according to media reports. The preliminary findings of an investigation into the ‘irregularities’ found they were likely caused by a consulting firm associated with the pro-Western National Liberal Party running a campaign on behalf of an opponent of Georgescu, which backfired.

Romania
https://twitter.com/daily_romania/status/1915657419264246123

“Our success depends on his ability to shock you.”

Time has a whole edition on Trump. This is just one of their stories. A look from “the other side”.

• Exclusive: Inside Trump’s First 100 Days (Time)

President Donald Trump emerges through a pair of handsome wooden doors on the third floor of the White House. On his way down the wide, carpeted staircase, he passes portraits of his predecessors. Nixon is opposite the landing outside the residence. Two flights down, he has swapped the placement of Clinton and Lincoln, moving a massive painting of the latter into the main entrance hall of the mansion. “Lincoln is Lincoln, in all fairness,” he explains. “And I gave Clinton a good space.” But it’s the portrait around the corner that Trump wants to show off. It’s a giant painting of a photograph—that photograph, the famous image of Trump, his fist raised, blood trickling down his face, after the attempt on his life last July at a rally in Butler, Pa. It hangs across the foyer from a portrait of Obama, in tacit competition. When they bring tours in, everyone wants to look at this one, Trump says, gesturing to the painting of himself, in technicolor defiance. “100 to 1, they prefer that,” he says. “It’s incredible.”

Making his way out to the Rose Garden, he walks up the inclined colonnade toward the Oval Office, describing the other alterations to the decor, both inside and out. His imprint on his workspace is apparent. The molding and mantels have gold accents now, and he has filled the walls with portraits of other presidents in gilded frames. He has hung an early copy of the Declaration of Independence behind a set of blue curtains. The box with a red button that allows Trump to summon Diet Cokes is back in its place on the Resolute desk, behind which stands a new battalion of flags, including one for the U.S. Space Force, the military branch he established. A map of the “Gulf of America,” as Trump has rechristened the Gulf of Mexico, was propped on a stand nearby.

If Trump is making cosmetic changes to the White House, his effect on the presidency goes much deeper. The first 100 days of his second term have been among the most destabilizing in American history, a blitz of power grabs, strategic shifts, and direct attacks that have left opponents, global counterparts, and even many supporters stunned. Trump has launched a battery of orders and memoranda that have hobbled entire government agencies and departments. He has threatened to take Greenland by force, seize control of the Panama Canal, and annex Canada. Weaponizing his control of the Justice Department, he has ordered investigations of political enemies. He has gutted much of the civil service, removing more than a hundred thousand federal workers. He has gone to war with institutions across American life: universities, media outlets, law firms, museums.

He pardoned or gave a commutation to every single defendant charged in connection with the Jan. 6 attacks, including those convicted of violent acts and seditious conspiracy. Seeking to remake the global economy, he triggered a trade war by unleashing a sweeping array of tariffs that sent markets plummeting. Embarking on his promised program of mass deportation, he has mobilized agencies across government, from the IRS to the Postal Service, as part of the effort to find, detain, and expel immigrants. He has shipped some of them to foreign countries without due process, citing a wartime provision from the 18th century. His Administration has snatched foreign students off the streets and stripped their visas for engaging in speech he dislikes. He has threatened to send Americans to a notorious prison in El Salvador. Says one senior Administration official: “Our success depends on his ability to shock you.”

2032

Think ahead! https://t.co/nYabeOjvBY

— Elon Musk (@elonmusk) April 25, 2025

Sun

"Most Skin Cancers Are Caused By Wearing Sunglasses."
Dr Jack Kruse

"We're The Only Stupid Idiot Animals On The Planet That Have Bought The Bull Sh*t…That Blocking The Sun Is Smart."

"You Don't Ever Want To Block The Sun…EVER."

"Your Eyes Were Created To Absorb Light."… pic.twitter.com/KyRNE5CUBX

— Valerie Anne Smith (@ValerieAnne1970) April 25, 2025

Miniatures
https://twitter.com/Rainmaker1973/status/1915721903483875524

Laundry

Robots folding hotel laundry
pic.twitter.com/jxDK4MW89Y

— Science girl (@gunsnrosesgirl3) April 25, 2025

Willy

This is 1940's tech. A Willy's Jeep from WWII could be unpacked from a create and reassembled in around 4 minutes.pic.twitter.com/LrR5KojlI2

— Military Arms (@MAC_Arms) April 24, 2025

https://twitter.com/nicksortor/status/1915771350137897215

Rowe

Mike Rowe: “We’ve got $1.7 trillion in student debt on the books and we’ve got 7.6 million open jobs right now—most of which don’t require a 4-year degree.”

“And we’ve got 6.8 million able-bodied men who are not only out of the workforce, they’re not looking.”

“We took shop… pic.twitter.com/33eVay6muE

— Holden Culotta (@Holden_Culotta) April 24, 2025

Machine

The machine that started it all, hand built on a band saw using plywood. pic.twitter.com/mvVpQbUjkq

— Wintergatan (@wintergatan) April 25, 2025

Baby swan
https://twitter.com/Yoda4ever/status/1915407889482633272

Puffer

The male pufferfish tries to impress potential mates with his masterpiece.pic.twitter.com/Az8Qh81moh

— Wonder of Science (@wonderofscience) April 25, 2025

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The Dying Days Of An Empire

Jun 252019

June 25, 2019 Posted by Raúl Ilargi Meijer at 7:08 pm Finance, Primers Tagged with: China, empire, Greece, military, overreach, petrodollar, reserve currency, Rome, ruble, Russia, sanctions, Trump, Vietnam, yuan 11 Responses »

Caravaggio Conversion on the way to Damascus 1600-01

Something’s been nagging me for the past few days, and I’m not sure I’ve figured out why yet. It started when Donald Trump first called off the alleged planned strikes on targets in Iran because they would have cost 150 lives, and then the next day said the US would do sanctions instead. As they did on Monday, even directly targeting Trump’s equal, the “Supreme Leader Khameini”.

When Trump announced the sanctions, I thought: wait a minute, by presenting this the way you did, you effectively turned economic sanctions into a military tool: we chose not to do bombs but sanctions. Sounds the same as not doing a naval invasion but going for air attacks instead. The kind of decisions that were made in Vietnam a thousand times.

However, Vietnam was all out war (well, invasion is a better term). Which shamed the US, killed and maimed the sweet Lord only knows how many promising young Americans as well as millions of Vietnamese, and ended in humiliating defeat. But the US is not in an all out war in Iran, at least not yet. And if they would ever try to be, the outcome would be Vietnam squared.

Still, that’s not really my point here. It’s simply about the use of having the world reserve currency as a military weapon instead of an economic one. And I think that is highly significant. As well as an enormous threat to the US. The issue at hand is overreach.

While you could still argue that economic sanctions on North Korea, Venezuela and Russia are just that, economic and/or political ones, the way Trump phrased it, comparing sanctions one on one with military strikes, no longer leaves that opening when it comes to Iran. The new Iran sanctions are a preliminary act of war. Simply because of how he presented them. He explicitly stated that he swapped one for the other.

There are quite a few people who have been harping on the demise of the USD as reserve currency for a long time, and I always think: look, nobody wants the yuan, let alone the ruble. There’s no trade being executed in these currencies. So taking over from the USD is a pipe dream.

But that may very well change, and perhaps very fast too, if the US uses the dollar not as an economic weapon (and there are plenty issues with that already), but as a military one. That would potentially hugely speed up any efforts to move away from the buck in international trade.

For the simple reason that it becomes unreliable. Traders hate that, they can’t have that. A reserve currency must be neutral -to a point-. The world of trade doesn’t want the yuan because Beijing controls it and can therefore change conditions and values overnight. But if and when the US uses the USD as a military tool, it essentially risks doing exactly the same: it deneutralizes the USD.

Using the USD as an economic weapon is ugly, but something global trade can deal with. A military weapon, though, is something else altogether. And I see no sign that Trump understands this. The thing is, using your currency, which also happens to be the world reserve currency, as a military tool, means you’ve become a threat to everyone, the entire globe, overnight.

And people don’t want to live that way. Not Iran, not Russia, not China, not Europe, no-one. It’s one thing to use the USD for sanctions. But it’s a real different thing to use it as just a military alternative to “bombing a country into obliteration”.

What Trump did comes awfully close to signing the death warrant for the USD as the global reserve currency. And it’s really only because he and his people weren’t paying attention. He could have phrased the entire thing differently, and it would have been business as usual, a business that Moscow and Beijing are actively trying to undermine, but they could have waited a bit longer reacting.

Now, however, their plans have to be sped up. They’re going to be buying a lot of gold, as they’ve already been doing, they’ll try to do their mutual business in their own currencies backed by this gold, and they’ll speed up alternatives-to-USD plans with other countries in their neighborhood. Because they have no choice anymore.

I see Tyler Durden reporting that the US threatens to throw a Chinese state-owned bank out of the SWIFT system, and I think: great idea. Why not force China to quit the reserve currency system, the petrodollar, outright?! Why not force it to hasten the Asian/Russian alternative trade model into existence? What a great and lovely idea.

The US should today make friends. It should preserve the reserve currency status of the USD for as long as it can, by convincing allies and foes alike that it will protect its neutrality in global trade. But Trump and his people are doing the exact opposite, they’re playing all-on-red.

The US no longer has the economic, political or military might to dictate to the entire world any terms it wants to. Those days are long gone. That ended in Vietnam. Trump’s living in the last century, while Bolton and Pompeo, they live in their own time and world.

But yeah, sure, perhaps this is what the dying days of an empire MUST look like. Maybe there’s a model to follow and there’s no escape, maybe it’s all written in the stars. Like Rome and Greece and Genghis Khan. Maybe things simply just have to play out. Still, looking at that Trump statement about the new Iran sanctions that started me off, it doesn’t feel all that smart.

A Tide In The Affairs Of Men

Mar 192019

March 19, 2019 Posted by Raúl Ilargi Meijer at 1:18 pm Finance Tagged with: bedlamite, Ceasar, censorship, Kondratieff, madhouse, Robespierre, Rome, Shakespeare, ThomasMore, totalitarianism, Washington 19 Responses »

Leonardo da Vinci First anatomical studies c1515

Sometimes we find ourselves merely pondering, not so much solving big problems. Is there playing out, in the world at large, or at least the world of men, something akin to the Kondratieff cycle in economics, a larger cycle, a force, a tide, an energy, that we mostly ignore, but which drives our ‘affairs’? Dr. D. thinks there may well be. But if so, what happens to free will?

Dr. D.:

Dr. D.: I seem to have taken a dark and grumpy turn lately. Probably the winter, but as I get older, I find the present state of the world more and more frustrating.

I fear with the present madness it’s just de rigor to 1) label people as something they’re not, even the OPPOSITE of what they are, 2) furiously fight that strawman and 3) not care. I have no explanation for it, but there are times and tides in the affairs of men (as Shakespeare would say) which flood you out and cost a fortune. …Or something like that.

And it’s certainly flooding in Europe right now, as darkness falls as the shutters of censorship and totalitarianism are bolted up everywhere, every bit as clear and methodical as was done in 1935, even with a call for a shiny new army. …To use on no one, of course, because we all know broke nations fund and create armies for no ill intent whatsoever. But these things happen regularly.

“If…any person had told me that there would have been such [chaos] as [now] exists, I would have thought them a bedlamite, a fit subject for a madhouse.”
– George Washington, 1786 (after a fiat money blowoff in the states)

My belief is that these things happen from forces outside ourselves and are sadly predictable, as “the lesson of history is that no one learns anything from history.” There may be the “Fourth Turning” of generations, but a 4th-of-4 turning is some 200 years, the next cycle, the next fractal up, and things crack quite a bit wider.

As this follows exactly the weather, earthquake, and volcanic cycles, it suggests far more its external origin, the way birds grow senselessly restless and flock in fall, or animals are agitated and predict earthquakes. In this case, my guess is the human nervous system is very sensitive to the fluctuations in the sun, or possibly further, the wing of the galaxy we fly through like sand ripples 240 years apart. What else could it be to affect men, weather, and volcanoes all at once?

But I suspect the additional energy flooding into all men gives them a very hard time, hyping them up, and those who don’t know how to shed and direct the energy appropriately — which is most of us — become manic and unthinking, and to some extent collectively go mad. As events on the ground direct them, so it can be channeled into grandeur, like the industrial revolution, or into a suicidal bloodbath like Jacobin France.

We appear to desire the latter right now, where the most astonishing, easily falsifiable accusations are made, and followed through just as thoughtlessly by the mob. They attack and hang one man one day, then the next his accuser comes under scrutiny and is hanged in turn, yet no one makes a call to sense and order, but rather to more ghosts, more bogymen, and more panic that chases them in turn like the devil of Sir Thomas More. …Thankfully merely murder-by-reputation so far, but it would be shocking indeed if that lasted long.

I also believe men know this, and far from stopping it, prefer to make fortunes by going with the tide and pushing it along, tirelessly undermining nations they can short, and then supporting the kings rising on the wheel of fortune and hitching to their star until in the next cycle they will be undermined in turn.

Unfortunately, it is Europe and America’s time down on the wheel, and they are doing everything they can — spending trillions, directing Facebook and the Guardian, buying ministers and judges, undermining every pillar of our society, economic, social, moral — in their quest to drive us down, and therefore buy us up cheap in “Disaster Capitalism.” And being in the lowering tide, we don’t need any additional help.

However, with such sturm und drang, there’s just shouting man to man everywhere, sheer bedlam, and otherwise good people get caught up in it, accusing you, accusing me, and exhausting and ruining themselves at a time we most need to pull together, make forgiveness, and apply what limited forces we have to the task of saving ourselves and our values.

So what do we do? Well if indeed we are each being over-energized and overloaded as it seems, we need to calm and ground ourselves in deeper principles that are unchanging — a thing far easier said than done.

However, if we can see that all of us are in the same dilemma, we are all ill-at-ease, and it’s not the other guy, it’s ourselves too that is short tempered, short-sighted, jumping to conclusions — in a word: short — then we can go through the day and this time better, and address it better, redress it better, and make more accurate, more practical and productive responses than if we didn’t know where our new trouble and new agitation is coming from.

Because history shows these things happen, and we’re in it now and it’s clearly happening to us. Perceiving all this years ago, I took myself to a humble place and planted trees, as the Stoics at the fall of Rome retreated to walled gardens and enjoyed what life they could, and although it’s a hard life and everyone’s answer is different, these things pass and all men have troubles and die even in the best of times.

So while I find it as frustrating as anyone, to be outrageously accused, to not be heard day after day, I try to keep perspective as well. It may not be a help to them, but it’s a help to me at least, so I can possibly answer the call to help someday, should any someday come.

But I don’t think so. Like Robespierre or Washington, I expect it to vent its madness on me and on us all with little restraint instead. My job is to weather it as I can and wait for better springs to come, which they will, but decades from now.

“There is a tide in the affairs of men, Which taken at the flood, leads on to fortune.”
– Julius Caesar Act 4 Scene 3

Debt Rattle November 11 2018

Nov 112018

November 11, 2018 Posted by Raúl Ilargi Meijer at 10:39 am Finance Tagged with: Brexit, capitalism, China, coral reefs, energy, ghost towns, Khashoggi, Korea, renewables, Rome, sex, socialism 2 Responses »

Paul Gauguin Christ in the garden of olives 1889

• China Can Never Allow Its Housing Bubble To Burst (ZH)

• One Thing Unites Britain (O.)

• Four UK Ministers On Verge Of Quitting, EU Rejects Latest Plan (R.)

• Top Tory Says Theresa May Is ‘Handing Power To EU’ In Brexit Deal (G.)

• Khashoggi Murder Fails To Stop Britain Selling Arms To The Saudis (O.)

• Saudi Arabia Wants To Cut OPEC Allies Oil Output By Up To 1 Million Bpd (R.)

• Court Clears Rome’s Mayor Of Cronyism And Abuse Of Power (G.)

• 2 Koreas Complete The Disarming Of 22 Guard Posts (AP)

• Moorside’s Atomic Dream Was An Illusion. Renewables Are The Future (G.)

• Next Generation ‘May Never See The Glory Of Coral Reefs’ (G.)

• Why Women Have Better Sex Under Socialism (G.)

50 million empty apartments. ‘Real’ estate holds 75% of Chinese private ‘assets’. There can hardly be a more dangerous concept for the global economy.

• China Can Never Allow Its Housing Bubble To Burst (ZH)

Back in 2017, we explained why the “fate of the world economy is in the hands of China’s housing bubble.” The answer was simple: for the Chinese population, and growing middle class, to keep spending vibrant and borrowing elevated, it had to feel comfortable and confident that its wealth would keep rising. However, unlike the US where the stock market is the ultimate barometer of the confidence boosting “wealth effect”, in China it has always been about housing as three quarters of Chinese household assets are parked in real estate, compared to only 28% in the US, with the remainder invested financial assets. Beijing knows this, of course, which is why China periodically and consistently reflates its housing bubble, hoping that the popping of the bubble, which happened in late 2011 and again in 2014, will be a controlled, “smooth landing” process.

For now, Beijing has been successful in maintaining price stability at least according to official data, allowing the air out of the “Tier 1” home price bubble which peaked in early 2016, while preserving modest home price appreciation in secondary markets. How long China will be able to avoid a sharp price decline remains to be seen, but in the meantime another problem faces China’s housing market: in addition to being the primary source of household net worth – and therefore stable and growing consumption – it has also been a key driver behind China’s economic growth, with infrastructure spending and capital investment long among the biggest components of the country’s goalseeked GDP.

One result has been China’s infamous ghost cities, built only for the sake of Keynesian spending to hit a predetermined GDP number that would make Beijing happy. Meanwhile, in the process of reflating the latest housing bubble, another dire byproduct of this artificial housing “market” has emerged: tens of millions of apartments and houses standing empty across the country. According to Bloomberg, soon-to-be-published research will show that roughly 22% of China’s urban housing stock is unoccupied, according to Professor Gan Li, who runs the main nationwide study. That amounts to more than 50 million empty homes.

Britain is shrinking away from not just Europe, but the world, unable to focus on anything other than its domestic squabbles.

• One Thing Unites Britain (O.)

[..] Theresa May has always hung on in the belief that, when it came to the crunch moment, when a deal was on offer that would take the UK out of the EU on 29 March next year, her party and the country would unite sufficiently behind her to allow a withdrawal agreement to pass through parliament. The country would rally behind her vision of Brexit. But instead, as people become more aware of what leaving the EU entails, many MPs believe the reverse may be happening. [..] With more Tory Remainers and Leavers now opposing her, May’s task is daunting. Downing Street’s immediate task is to get her deeply split cabinet to unite around the final unresolved element of a potential deal with the EU: the legally complex issue of how to avoid a hard border between Northern Ireland and the Republic after Brexit.

Downing Street knows it is in a race against time. May is desperate to put a motion before the House of Commons before Christmas, in the hope that, somehow, it will pass. No 10 has pencilled in a cabinet meeting for early this week, probably on Tuesday. But disagreements remain among her most senior ministers over how the UK would exit from the so-called “backstop” agreement, under which the whole of the UK would remain in the EU customs union until a final UK-EU trade deal is struck. Several cabinet ministers are unhappy with what they fear will be fudged wording in the withdrawal agreement that fails to chart a clear path to exit the backstop. They want to see the full legal advice and want guarantees that the EU will not be able to prevent the UK breaking free from its system once and for all, so that it can strike its own trade deals.

It’s still the Irish hard border. And they’re still no closer to a solution.

• Four UK Ministers On Verge Of Quitting, EU Rejects Latest Plan (R.)

Four British ministers who back remaining in the European Union are on the verge of quitting Theresa May’s government over Brexit, the Sunday Times reported, as pressures built on the prime minister from all sides. The newspaper also said that the European Union had rejected May’s plan for an independent mechanism to oversee Britain’s departure from any temporary customs arrangement it agrees. The newspaper sourced the development to British sources, and not sources in the EU team. May is trying to hammer out the final details of the British divorce deal but the talks have become stuck over how the two sides can prevent a hard border from being required in Ireland.

Britain has proposed a UK-wide temporary customs arrangement with the EU to resolve the issue but Brexiteers in her party want London to have the final say on when that arrangement would end, to prevent it from being tied indefinitely to the bloc. A senior cabinet minister was quoted in the paper as saying: “This is the moment she has to face down Brussels and make it clear to them that they need to compromise, or we will leave without a deal.” An EU diplomat told Reuters earlier on Saturday that they were cautiously hopeful that an EU summit could happen in November to endorse the deal but that the volatile situation in Britain made it very difficult to predict.

Well, May herself doesn’t appear to know what to do with that power.

• Top Tory Says Theresa May Is ‘Handing Power To EU’ In Brexit Deal (G.)

Theresa May was accused last night by a former cabinet colleague of planning the “biggest giveaway of sovereignty in modern times”, as she faced a potentially devastating pincer movement from Tory remainers and leavers condemning her Brexit plans. The day after Jo Johnson, the pro-remain brother of former foreign secretary Boris Johnson, resigned from the government and called for a second referendum on Brexit, former education secretary Justine Greening launched an attack on the prime minister, saying her plans would leave the country in the “worst of all worlds”. Piling yet more pressure on May, Greening – who resigned from the cabinet in January – backed the former transport minister’s call for another public vote and said MPs should reject the prime minister’s deal.

Greening told the Observer: “The parliamentary deadlock has been clear for some time. It’s crucial now for parliament to vote down this plan, because it is the biggest giveaway of sovereignty in modern times. “Instead, the government and parliament must recognise we should give people a final say on Brexit. Only they can break the deadlock and choose from the practical options for Britain’s future now on the table.” Greening added: “Like many of us, Jo Johnson is a pragmatist on Britain’s relationship with the EU. But Conservative MPs can increasingly see that this sovereignty giveaway from No 10 leaves our country with less say over rules that govern our lives … That is not in the national interest, it’s the worst of all worlds and it resolves nothing.”

Even as the UK has also received the audio from Turkey.

• Khashoggi Murder Fails To Stop Britain Selling Arms To The Saudis (O.)

Britain has pursued its assiduous courtship of Saudi Arabia despite the murder of the journalist Jamal Khashoggi, with diplomats and Ministry of Defence officials meeting their counterparts in the kingdom to discuss closer economic, military and political ties. The discussions have taken place as Britain enters the final phase of negotiations to sell more Typhoon jets to Riyadh. They are similar to those used in the Saudi-led bombing of Yemen in a war that has caused a humanitarian disaster.

Britain sells billions of pounds of weapons to the countries bombing Yemen and is keen to strengthen its ties after Brexit. In July last year, the government confirmed it had created a dedicated Gulf region working group to promote “high-level dialogue with key trading partners to progress our trade and investment relationships”. Since then, civil servants have regularly visited the region for confidential talks to prepare for future deals once Britain leaves the European Union. A delegation from the Department for International Trade visited the Eastern Province chamber of commerce in Dammam in Saudi Arabia on 2 October – the day Khashoggi was murdered.

Alastair Long, the UK’s deputy trade commissioner for the Middle East and director of trade for Saudi Arabia, stressed that Britain was keen to create alternative markets and that Saudi Arabia “is at the head of these markets”. On 31 October, another UK government delegation visited Riyadh for a meeting with the Gulf Cooperation Council secretariat. A press release from the council said the meeting discussed expanding “the horizons of political, security, military and commercial cooperation”

Much discussed before: smaller producers have only one reaction to falling prices: produce more (if they can).

• Saudi Arabia Wants To Cut OPEC Allies Oil Output By Up To 1 Million Bpd (R.)

Saudi Arabia is discussing a proposal to cut oil output by up to 1 million barrels per day by OPEC and its allies, two sources close to the discussions told Reuters on Sunday. The sources said the discussions were not finalized as much depended on the reduction in Iranian exports. “There is a general discussion about this. But the question is how much is needed to reduce by the market,” one of the sources said, speaking in Abu Dhabi where a market monitoring committee is due to be held on Sunday, attended by top exporters Saudi Arabia and Russia.

Asked by reporters in Abu Dhabi if the market is in balance, Saudi Energy Minister Khalid Al-Falih said: “We will find out. We have our meeting later.” Al-Falih last month said there could be a need for intervention to reduce oil stockpiles after increases in recent months. The United States this month imposed sanctions curtailing Iran’s oil exports as part of efforts to curb Tehran’s nuclear and missile programs as well as its support for proxy forces in Yemen, Syria, Lebanon and other parts of the Middle East.

Smearing M5S has become less easy.

• Court Clears Rome’s Mayor Of Cronyism And Abuse Of Power (G.)

The Rome mayor, Virginia Raggi, has been cleared of cronyism and abuse of power after a judge ruled that the alleged offence did not constitute a crime. Prosecutors had called for a 10-month jail term over allegations that Raggi, from the anti-establishment Five Star Movement, lied to investigators over the appointment of Renato Marra, the brother of one of her close aides, as Rome’s tourism chief. His brother Raffaele, the former head of staff at Rome city hall, faces separate corruption allegations. The accusations emerged not long after Raggi was elected as Rome’s first female mayor in June 2016. Had she been convicted she would have been forced to resign as mayor, in line with the Five Star Movement’s code of ethics.

She wept upon hearing the ruling, saying afterwards: “This sentence wipes out two years of mud-slinging. We’ll go forward with our heads held high for Rome, my beloved city, and for all citizens.” Luigi Di Maio, the Five Star Movement leader and Italy’s deputy prime minister, celebrated the court ruling while using the opportunity to criticise journalists whom he accused of “attacking Italy’s most massacred mayor” for two years and generating “fake news” to bring her down. “Go Virginia! I am happy for always having defended you and believed in you,” he wrote on Facebook.

There are people who genuinely want peace. Get out of their way.

• 2 Koreas Complete The Disarming Of 22 Guard Posts (AP)

The North and South Korean militaries completed withdrawing troops and firearms from 22 front-line guard posts on Saturday as they continue to implement a wide-ranging agreement reached in September to reduce tensions across the world’s most fortified border, a South Korean Defense Ministry official said. South Korea says the military agreement is an important trust-building step that would help stabilize peace and advance reconciliation between the rivals. But critics say the South risks conceding some of its conventional military strength before North Korea takes any meaningful steps on denuclearization — an anxiety that’s growing as the larger nuclear negotiations between Washington and Pyongyang seemingly drift into a stalemate.

South Korea reportedly has about 60 guard posts — bunker-like concrete structures surrounded with layers of barbed-wire fences and manned by soldiers equipped with machine guns — stretched across the ironically named Demilitarized Zone. The 248-kilometer (155-mile) border buffer peppered with millions of land mines has been the site of occasional skirmishes between the two forces since the 1950-53 Korean War. The North is believed to have about 160 guard posts within the DMZ.

In this Nov. 4, 2018, photo provided by South Korea Defense Ministry, a yellow flag is raised at a guard post of South Korea in the demilitarized zone, South Korea. A South Korean Defense Ministry official said on Saturday, Nov. 10, 2018, the North and South Korean militaries have completed withdrawing troops and firearms from 22 front-line guard posts as they continue to implement a wide-ranging agreement reached in September to reduce tensions. The flag marks the post that is to be dismantled so that each side can observe the work in progress.

Sorry, but no. Using much less energy of any kind is the future. Voluntarily or forced. That’s what we should prepare our societies for.

• Moorside’s Atomic Dream Was An Illusion. Renewables Are The Future (G.)

Toshiba’s decision to pull out of building a nuclear power station in Cumbria last week will cause shockwaves far beyond the north-west of England. The outcome is a disaster for the surrounding area, which is heavily reliant on the nuclear industry for jobs and prosperity. Local politicians admit it is a blow and a disappointment for Cumbrians hoping for roles at the proposed Moorside plant. They say they genuinely believe a new buyer for the site will come forward. But that looks like wishful thinking. To an extent, the demise of Moorside can be attributed to problems with it as a specific project. It has looked doomed since Toshiba’s US nuclear unit, Westinghouse, declared bankruptcy in 2017 and the company ruled out new nuclear investments outside of Japan.

Efforts to woo the South Korean energy company Kepco as a buyer then floundered. The executive leading the sale for Toshiba blamed the failure to find a buyer on being “caught between a series of unplanned and uncontrollable events”. But the end of Moorside is also emblematic of the wider challenges that new nuclear faces. It took a decade from Tony Blair signalling the UK’s renewed interest in nuclear power in 2006 for France’s EDF Energy and the British government to sign a generous subsidy deal and green-light Hinkley Point C, the UK’s first new nuclear plant in a generation. In all likelihood, it will not be generating electricity until 2027. Ministers insist new nuclear power stations are still an essential way of hitting the country’s greenhouse gas emission targets and providing energy security as old plants are switched off in the 2020s.

Losing Moorside means there are just five other new nuclear projects planned, including Hinkley Point C. Eyes will now turn to Hitachi’s proposed Wylfa Newydd plant on Anglesey. The project is the furthest along the line after Hinkley, but it’s far from a done deal. The new nuclear drive was meant to be solely funded by the private sector, but the government has already made a striking exception in the case of Wylfa. Ministers have promised Hitachi they will use public money to take a £5bn stake in the scheme. Such a dramatic U-turn on policy is explained by the fact that Wylfa is about more than the UK’s desire for new nuclear: it is also about cooperation with Tokyo and bringing forth other investment from Japanese firms, such as carmakers, after Brexit.

We get the drift, but we also know only a small part of 1 or 2 generations of mankind have ever ‘seen’ coral reefs. And most people only do ‘see’ them in pics and movies. You might want to think about that. it’s definitely not about you ‘seeing’ coral reefs or rhino’s or orangutans. It’s about something else.

• Next Generation ‘May Never See The Glory Of Coral Reefs’ (G.)

Children born today may be the last generation to see coral reefs in all their glory, according to a marine biologist who is coordinating efforts to monitor the decline of the world’s most colourful ecosystem. Global heating and ocean acidification have already severely bleached 16 to 33% of all warm-water reefs, but the remainder are vulnerable to even a fraction of a degree more warming, said David Obura, chair of the Coral Specialist Group in the International Union for the Conservation of Nature. “It will be like lots of lights blinking off,” he told the Observer. “It won’t happen immediately but it will be death by 1,000 blows. Between now and 2 degrees Celsius, we will see more reefs dropping off the map.”

Obura added: “Children born today may be the last generation to see coral reefs in all their glory. Today’s reefs have a history going back 25 million to 50 million years and have survived tectonic collisions, such as that of Africa into Europe, and India into Asia. Yet in five decades we have undermined the global climate so fundamentally that in the next generation we will lose the globally connected reef system that has survived tens of millions of years.”

Headline obviously for effect. But interesting theme. Still, is it capitalism that is to blame for suppressing women, or patriarchy?

• Why Women Have Better Sex Under Socialism (G.)

This book has a simple premise: “Unregulated capitalism is bad for women,” Kristen Ghodsee argues, “and if we adopt some ideas from socialism, women will have better lives.” Ghodsee is an ethnographer who has researched the transition from communism to capitalism in eastern Europe, with a particular focus on gender-specific consequences. “The collapse of state socialism in 1989 created a perfect laboratory to investigate the effects of capitalism on women’s lives,” she writes. Less regulated economies, she finds, place a disproportionate burden on women. Women subsidise lower taxes through their unpaid labour at home. Cuts to the social safety net mean more women have to care for children, the elderly and the sick, forcing them into economic dependence.

Ghodsee contends that without state intervention, the private sector job market punishes those who bear and raise children and discriminates against those who might one day do so. The government is better at ensuring wage parity across different groups than the private sector, and economies with more public sector jobs tend to have more gender equality, too. Women bear the brunt of capitalism’s cyclical instability, and are often the last to be hired and the first to be fired in economic downturns. They are paid less, they have less representation in government and, she writes, all of this affects their sexuality. The less economic independence women have, the more sexuality and sexual relationships conform to the marketplace, with those who are disadvantaged in the free market pursuing sex not for love or pleasure but for a roof over their heads, health insurance, or access to the wealth or status that capitalism denies them.

America 2.0

Apr 072018

April 7, 2018 Posted by Raúl Ilargi Meijer at 12:32 pm Finance Tagged with: China, consumption, deficit, empire, industry, manufacturing, nation, power, production, Rome, surplus, US, wealth 24 Responses »

Dorothea Lange Farmers’ supply co-op. Nyssa, Malheur County, Oregon 1939

It’s Dr. D again. Told you he’s on a roll. He remains convinced America can re-invent itself. If only because it must.

Dr. D: Herbert Stein’s Law states “What Can’t Go On Forever, Doesn’t.” This is a neat summary of the present trade and currency imbalance. China makes real goods and the U.S. consumes them by typing digits on a keyboard. This is the very definition of what cannot go on forever.

• How long do you expect a nation can make nothing and consume everything?

• How long do you expect a nation without manufacturing, without a workforce, and now without a viable military to remain pre-eminent?

• How long does wealth and influence remain in a nation that makes nothing, does nothing, and knows nothing?

Reminds me of that other Law: “A fool and his money should be parted as soon as possible”, for to be wealthy, and helpless, and dumb, is not a combination that lasts for very long.

Since China cannot send the U.S. free goods forever, ergo, they won’t. That means slowly or quickly, now or later, they will cut us off. Right now it appears that can never happen, but I assure you it will very soon. And what will the U.S. do then? Actually, that’s very simple: the U.S. will have to close a $600B trade deficit instantly. Roughly, that means the U.S. will no longer import $600B worth of goods and be $600B/year poorer, or $2,000/year per person. Nor is this unusual. History is rife with examples of nations that once were prosperous and were suddenly cut off: Spain and Greece come immediately to mind. So how does this happen?

The Core nation, the trading hub has failed dozens of times in history, from Venice to Holland, Spain to England, and although most of history was on a gold standard, nevertheless the same thing happened: repudiation and devaluation of the currency. That’s why a U.K. Pound is no longer a troy pound of pure silver ($192) and why the U.S. Dollar is no longer 1/20th ounce of gold ($267). So let’s run down how this might unfold.

Like other empires, the U.S. rose to prominence with hard work and industry. Like other empires, this personal and physical industry was the foundation of an effective military. This military eventually stood alone, leaving the U.S. to set the rules of trade, the rules of diplomacy, and the rules of conduct. Like other nations, the U.S. bent those rules in its own favor, both early and late. Like other nations, the natural way to take advantage was to run an overvalued currency, which draws in capital from all trading partners worldwide, creating a 100-year spiral of wealth and influence that seems truly endless.

However math, the cruelest of Mother Nature’s laws, is not fooled. If you bend the rules to create market distortions, those distortions are indeed created. If there were fair trade, a gold standard, a nation that increases their wealth would find its currency rise. A rising currency would dampen manufacturing and efficiency, the gold would flow back out, and the unfair advantage would be corrected. But only in a free market. Any market on Earth has an Army, and that Army’s job day and night is to make sure that unfair advantage does NOT end. Ask Smedley Butler.

Mother Nature is never deterred. However long it takes, she waits. Lacking fair trade, an abnormally strong currency does the only other thing it can: destroy the Core nation’s industry, totally and completely. More certain than a nuclear explosion, economics will not miss a single spot until the wrong is righted and the truth is out. At first the low-gain commodity industries go: mining, shipping, smelting; then their sooty kinsmen: heavy rail, ships, ports, transportation.

After that go the lighter industries: manufacturing, stamping, autos, and so on up to mainframes, silicon chips and phones, and with them, their children, manufacturing processes and R&D. However, as London and NY showed, you can forestall currency correction even now by moving market distortions into services and financial engineering. At this point, however, the Core nation has nothing left but Banks, Universities, and the Government/Military, and no underlying economy to support them.

However, what Charles Hugh Smith calls the fiefdoms of monopoly cartels and apparatchiks of the 1% now lead an empty parade, horse-whipping the uncompliant 99% into supporting an economy that exists only in their minds. And then “What can’t go on, doesn’t.” The empire collapses from within, to the total surprise of historians of the 1%, and the total lack of interest of the 99%, for whom it had already collapsed decades before.

And of the other side? Thanks to the overly-high currency of the Core nation, the perimeter nation has an artificially LOW currency. They didn’t do that, because they are by definition small and weak and aren’t using an army to set the rules. The artificially low currency leads to low costs, low labor, high enterprise, and in the mirror image of the Core nation, the constant INCREASE in manufacturing. The increase in wealth, and the addition of commodity goods, then heavy industry, then manufacturing, then R&D. Whose fault is that? Who used a worldwide army to enforce the very rules that gutted their homeland? Not the Vandals; not China. It was Rome; it was D.C.

What is this whole imbalance based on? In our case, the artificially strong dollar, backed by a worldwide U.S. military. So how must it end? With a weak dollar, falling real markets, and a U.S. military returning home.

You say this can’t happen? Yet it must happen. To say otherwise means China will give us free goods for 10,000 years, and the U.S. will get always weaker that whole time. So how does the transition go?

The U.S. financial bulwark cracks, being highest and most based on psychology, not reality, very likely in conjunction to a military failure or withdrawal, as in empire finance, the military and currency are equivalent. Slowly, then rapidly, the tide flows out, the U.S. dollar gets weaker, the Chinese Yuan gets stronger, and the whole process reversed as it should have done years ago.

(mind the log scale)

Mother Nature isn’t fooled, and those 70 years of repression and manipulation are made up in a few years.

Down on the ground, what happens is not that China shuts off free imports to the U.S. directly, with a political embargo, what happens is the U.S. is seen as a has-been and the U.S. dollar falls in purchasing power on the world market, raising the price of foreign goods in a “free” and “open” marketplace. Lacking manufacturing and the military power to stop it, the U.S. can’t hold off Mother Nature and the laws of physics any more.

Knowing this to be inevitable, how would a nation prepare? For one thing, you would need to kick-start your industry, post-haste. Anything that can be made internally will find its prices stabilize and not rise. Yet before the currency rates are corrected this face overwhelming headwinds. Second, as income will be lost and the borders will be shut off, you need to switch the focus of taxation from income to tariffs, from finance to real goods.

Third, you need to open your pipelines, ports, and infrastructure, and expand the required steel, oil by any means necessary, even armed standoffs. Fourth, you’ll need to shove the culture away from government support and subsidies that will soon disappear, and into self-reliance and productivity. Firth, you’ll need to downsize the government and especially the military, which will and must return home. Any of those platforms sound familiar?

Despite what you read, it’s not all bad. Just as “The arrogant people will be brought down, and high and mighty people will be humbled”, “Every valley shall be raised up, and every mountain and hill shall be made low; and the crooked shall be made straight, and the rough places smooth.”

This is a master reversal of all manipulations, of all imbalances that have reached extremes. As the U.S. – China trade deficit must balance, we know that Chinese goods must rise. But that also means the cost of production for U.S. goods must fall. This cost-advantage puts Americans back to work just as it did the Chinese, while the rise of the Yuan will make China rich, but less productive.

What’s more, as matters reverse, the U.S. will raise prices on their exports: food and oil, two things China must have and cannot get elsewhere. Agriculture is at an all-time, 1,000 year low and must rise. Stocks and housing are at an all-time high and must fall. In a reversal, the high prices fall, the low prices rise, that’s obvious. That’s what “reversal” means, that’s what “extreme” means.

As for manufacturing, the world is changing fast. Even China is opening “dark” factories that employ no people, only robots. That will be true here as well, which undercuts any labor savings they once had. There’s a few problems, however: robotic mega-factories only work with very large scale of identical goods that can source reliable, high-quality inputs. If oil is too high, and/or shipping or marketing fractures, those factories scale down, retool more, and therefore require more people than presently.

How is China going to have huge robotic mega-factories if half their export market can no longer afford them? If the U.S. and China split the market, aren’t all those factories half the size of present? Since the U.S. will now have low-cost people and raw materials, what advantage does China bring to offset shipping and tariffs? The “market” isn’t uniform. There was worldwide mass-integration of manufacturing between India and England and the world in 1910 too, yet it’s didn’t persist; it changed.

One way it can change is to leapfrog China. We hear about how the U.S. is a has-been as we are supporting legacy copper telephones while the 3rd world goes directly to fiber and cell, and this is true. However, China has mainlined on low-price, low-profit, mass-manufacturing. Why would anyone compete with them there? It’s irrational. Build a baseline and let them have all the low-profit, environment-destroying work they want, the U.S. can’t and won’t beat them there.

We can beat them by leapfrogging into technology that’s out there, but no one is revealing yet, things they haven’t done, but Americans are good at doing: innovating, high-tech, medical. Much as I hate high-tech and its panacea as an answer, yet I believe there are goods, ideas out there that can transform the way things work.

Look at the rapid development and uptake of LEDs for example. The patent office is filled with them, and an outsized number are American. We have superconducting maglev, field physics, material science of no-weight foam, color-shifting paint, hyperconducting graphite, and transparent concrete to name a few. All there, all unused. Let’s make an example case in a very large, very quiet investment.

Medical and Biotech are to some extent used up, with overpriced, mass-market pharmaceuticals being rejected by price and form even by the wider population. But that’s so last-century. The new biotech is going to take a blood or DNA sample and synthesize a drug specifically for your blood and DNA. They are going to create another organ, a blood transfusion no one but you can use.

In one way, this may be more expensive, and that’s good for profits, but in another way, they will work for you, much better and guaranteed, and therefore fix your health faster, spare you useless drugs, bad side effects, and actually work, and therefore be cheaper. What does it take to make them? A complete revolution in drug manufacturing. Multi-billion dollars’ worth of equipment, extremely unique development and patents, a 20 year head start.

Could you sell such a thing to the Chinese? You bet. Could they get off retail manufacturing and scoop us on it? Not a chance. So you see how such a thing could happen, even with a U.S. dollar falling and a hard readjustment ahead. And that’s just one.

If boutique and robotic goods are the new industries, what do we do with 200 million unemployed? We won’t have 200 million. That’s a consequence of the distorted extreme of our finance, our centralization, our currency. For one thing, we have only 100 million now and a lower dollar will definitely restore the competitive advantage of highly-productive U.S. workers. At the same time, if work requires fewer workers, we will find a solution. Why?

Because you can’t have 200 million unemployed. Not even 100 million. The resulting inequity and income disparity can and has caused a revolution. Faced with that, any nation will adjust because they must or perish. As difficult as Americans can be, they are a practical people above all. This has happened to dozens of nations in the past: Spain, France, Germany, England, China, Japan, and they all still exist. Things rotated out in the big wheel of time. New things were made and the old ones faded away, and we will too.

We’re going back to being just one of many nations, and a fair and productive one too. There are ways and we will find them. How can I be so sure? Because “What Can’t Go On Forever, Doesn’t,” and it won’t this time either.

Globalization is Poverty

Oct 162017

October 16, 2017 Posted by Raúl Ilargi Meijer at 2:00 pm Finance Tagged with: centralization, China, Corbyn, debt, globalization, manufacturing, production, Rome, Uber, Yellen 16 Responses »

Marc Riboud Zazou, painter of the EIffel Tower 1953

Central bankers have never done more damage to the world economy than in the past 10 years. One may argue this is because they never had the power to do that. If their predecessors had had that power, who knows? Still, the global economy has never been more interconnected than it is today, due mostly to the advance of globalism, neoliberalism and perhaps even more, technology.

Ironically, all three of these factors are unremittingly praised as forces for good. But living standards for many millions of people in the west have come down and/or are laden with uncertainty, while millions of Chinese now have higher living standards. People in the west have been told to see this as a positive development; after all, it allows them to buy products cheaper than if they had been made in domestic industries.

But along with their manufacturing jobs, their entire way of life has mostly disappeared as well. Or, rather, it is being hidden behind a veil of debt. Still, we can no longer credibly deny that some three-quarters of Americans have a hard time paying their bills, and that is very different from the 1950s and 60s. In western Europe, this is somewhat less pronounced, or perhaps it’s just lagging, but with globalism and neoliberalism still the ruling economic religions, there’s no going back.

What happened? Well, we don’t make stuff anymore. That’s what. We have to buy our stuff from others. Increasingly, we lack the skills to make stuff too. We have become dependent on nations half a planet away just to survive. Nations that are only interested in selling their stuff to us if we can pay for it. And who see their domestic wage demands go up, and will -have to- charge ever higher prices for their products.

And we have no choice but to pay. But we can only pay with what we can borrow. As nations, as companies, and as individuals. We need to borrow because as nations, as companies, and as individuals we don’t make stuff anymore. It’s a vicious circle that globalization has blessed us with. And from which, we are told, we can escape only if we achieve growth. Which we can’t, because we don’t make anything.

So we rely on central bankers to manage the crisis. Because we’re told they know how to manage it. They don’t. But they do pretend to know. Still, if you read between the lines, they do admit to their ignorance. Janet Yellen a few weeks ago fessed up to the fact that she has no idea why inflation is weak. Mario Draghi has said more or less the same. Why don’t they know? Because the models don’t fit. And the models are all they have.

Economic models are more important in central banking than common sense. The Fed has some 1000 PhDs under contract. But Yellen, their boss, still claims that ‘perhaps’ the models are wrong, with it comes to inflation, and to wage growth. They have no idea why wages don’t grow. Because the models say they should. Because everybody has a job. 1000 very well paid PhDs. And that’s all they have. They say the lack of wage growth is a mystery.

I say that those for whom this is a mystery are not fit for their jobs. If you export millions of jobs to Asia, take workers’ negotiating powers away and push them into crappy jobs with no benefits, only one outcome is possible. And that doesn’t include inflation or wage growth. Instead, the only possible outcome is continuing erosion of economies.

The globalist mantra says we will fill up the lost space in our economies with ‘better’ jobs, service sector, knowledge sector. But reality does not follow the mantra. Most new jobs are definitely not ‘better’. And as we wait tables or greet customers at Wal-Mart, we see robots take over what production capacity is left, and delivery services erase what’s left of our brick and mortar stores. Yes, that means even less ‘quality’ jobs.

Meanwhile, the Chinese who now have taken over our jobs, have only been able to do that amidst insane amounts of pollution. And as if that’s not bad enough, they have recently, just to keep their magical new production paradise running, been forced to borrow as much as we have been -and are-, at state level, at local government level, and now as individuals as well.

In China, credit functions like opioids do in America. Millions of people who had never been in touch with the stuff would have been fine if they never had, but now they are hooked. The local governments were already, which has created a shadow banking system that will threaten Beijing soon, but for the citizens it’s a relatively new phenomenon.

And if you see them saying things like: “if you don’t buy a flat today, you will never be able to afford it” and “..a person without a flat has no future in Shenzhen.”, you know they have it bad. These are people who’ve only ever seen property prices go up, and who’ve never thought of any place as a ghost city, and who have few other ways to park what money they make working the jobs imported from the US and Europe.

They undoubtedly think their wages will keep growing too, just like the ‘value’ of their flats. They’ve never seen either go down. But if we need to borrow in order to afford the products they make in order to pay off what they borrowed in order to buy their flats, everyone’s in trouble.

And then globalization itself is in trouble. The very beneficiaries, the owners of globalization will be. Though not before they have taken away most of the fruits of our labor. What are you going to do with your billions when the societies you knew when you grew up are eradicated by the very process that allowed you to make those billions? It stops somewhere. If those 1000 PhDs want to study a model, they should try that one.

Globalization causes many problems. Jobs disappearing from societies just so their citizens can buy the same products a few pennies cheaper when they come from China is a big one. But the main problem with globalization is financial: money continually vanishes from societies, who have to get ever deeper in debt just to stand still. Globalization, like any type of centralization, does that: it takes money away from the ‘periphery’.

The Wal-Mart, McDonald’s, Starbucks model has already taken away untold jobs, stores and money from our societies, but we ain’t seen nothing yet. The advent of the internet will put that model on steroids. But why would you let a bunch of Silicon Valley venture capitalists run things like Uber or Airbnb in your location, when you can do it yourself just as well, and use the profits to enhance your community instead of letting them make you poorer?

I see UK’s Jeremy Corbyn had that same thought, and good on him. Britain may become the first major victim of the dark side of centralization, by leaving the organization that enables it -the EU-, and Corbyn’s idea of a local cooperative to replace Uber is the kind of thinking it will need. Because how can you make up for all that money, and all that production capacity, leaving where you live? You can’t run fast enough, and you don’t have to.

This is the Roman Empire’s centralization conundrum all over. Though the Romans never pushed their peripheries to stop producing essentials; they instead demanded a share of them. Their problem was, towards the end of the empire, the share they demanded -forcefully- became ever larger. Until the periphery turned on them -also forcefully-.

The world’s central bankers’ club is set to get new leadership soon. Yellen may well be gone, so will Japan’s Kuroda and China’s Zhou; the ECB’s -and Goldman’s- Mario Draghi will go a bit later. But there is no sign that the economic religions they adhere to will be replaced, it’ll be centralization all the way, and if that fails, more centralization.

The endgame of that process is painfully obvious way in advance. Centralization feeds central forces, be they governmental, military or commercial, with the fruits of labor of local populations. That is a process that will always, inevitably, run into a wall, because too much of those fruits are taken out. Too much of it will flow to the center, be it Silicon Valley or Wall Street or Rome. Same difference.

There are things that you can safely centralize (peace negotiations), but they don’t include essentials like food, housing, transport, water, clothing. They are too costly at the local level to allow them to be centralized. Or everybody everywhere will end up paying through the nose just to survive.

It’s very easy. Maybe that’s why nobody notices.

Coming Apart: The Imperial City At The Brink

Jun 182017

June 18, 2017 Posted by Raúl Ilargi Meijer at 1:00 pm Finance Tagged with: Alastair Crooke, Civil War, destruction, disrupt, elites, empire, fragility, Rome, Trump, Washington DC 6 Responses »

Thomas Cole Destruction of Empire 1836

The Conflicts Forum, directed by former British diplomat and MI6 ‘ranking figure’ Alastair Crooke, sent me another unpublished article by Alastair and asked if the Automatic Earth would publish it. But of course. Previous articles by Alastair published here are: ‘End of Growth’ Sparks Wide Discontent in October 2016, Obstacles to Trump’s ‘Growth’ Plans in November 2016 and What is this ‘Crisis’ of Modernity? in January 2017.

Here’s Alastair again:

Alastair Crooke: David Stockman routinely refers to President Trump as the ‘Great Disrupter’. But this is not a bad quality, he insists. Rather, it is a necessary one: Stockman argues (my paraphrasing) that Trump represents the outside force, the externality, that tips a ‘world system’ over the brink: It has to tip over the brink, because systems become too ossified, too far out on their ‘branch’ to be able to reform themselves. It does not really matter so much, whether the agency of this tipping process (President Trump in this instance), fully comprehends his pivotal role, or plays it out in an intelligent and subtle way, or in a heavy-handed, and unsubtle manner. Either serve the purpose. And that purpose is to disrupt.

Why should disruption be somehow a ‘quality’? It is because, during a period when ‘a system’ is coming apart, (history tells us), one can reach a point at which there is no possibility of revival within the old, but still prevailing, system. An externality of some sort – maybe war, or some other calamity or a Trump – is necessary to tip the congealed system ‘over’: thus, the external intrusion can be the catalyst for (often traumatic) transformational change.

Stockman puts it starkly: “the single most important thing to know about the present risk environment [he is pointing here to both the political risk as well as financial risk environment], is that it is extreme, and unprecedented. In essence, the ruling elites and their mainstream media megaphones have arrogantly decided that the 2016 [US Presidential] election was a correctible error”.

But complacency simply is endemic: “The utter fragility of the latest and greatest Fed bubble could not be better proxied than in this astounding fact. To wit, during the last 5,000 trading days (20 years), the VIX (a measure of market volatility) has closed below 10 on just 11 occasions. And 7 of those have been during the last month! … That’s complacency begging to be monkey-hammered”, Stockman says.

Former Presidential candidate, Pat Buchanan concurs: “President Trump may be chief of state, head of government and commander in chief, but his administration is shot through with disloyalists plotting to bring him down.

We are approaching something of a civil war where the capital city seeks the overthrow of the sovereign, and [to achieve] its own restoration. Thus far, it is a nonviolent struggle, though street clashes between pro- and anti-Trump forces are increasingly marked by fistfights and brawls. Police are having difficulty keeping people apart. A few have been arrested carrying concealed weapons.

That the objective of this city is to bring Trump down, via a deep state-media coup, is no secret. Few deny it.”

The extraordinary successful ‘manufacture’ and ‘parachuting-in’ of Macron into the French Presidential election by the French élite, precisely has given to the globalised Deep State (including their US counterparts), renewed confidence that Europe and America’s slide towards ‘populism’, is indeed a ‘correctable error’. European élites now can barely contain their revived schadenfreude at the Brexiters’ and at the Populists’ presumed discomfort (see here).

Thomas Cole Consummation of Empire 1836

But despite the palpable danger to the integrity of the political system itself, Stockman notes, “it is no inconsiderable understatement to suggest that the S&P 500 at 2440 is about as fragile as the ‘market’ has ever been.

Any untoward pinprick could send it into a tailspin … Doug Kass said it best in his recent commentary: “Over history, as we have learned, a Minksy Moment develops when investor sentiment becomes complacent after long periods of prosperity and the data is ignored, and doesn’t seem to matter anymore, as I wrote in “It’s a ‘Bohemian Rhapsody’ Market: Nothing Really Matters … to investors.” In short, the market has become ‘zombie’ (in the sense of residing within a psychological defence mechanism – as, when to contemplate the alternative – simply is too threatening to the psyche) [emphasis added].

Daniel Henninger, in a Wall Street Journal op-ed, writes: “Donald Trump’s election has caused psychological unhingement in much of the population. But the Trump phenomenon only accelerated forces that were plummeting in this direction before the 2016 election…

“Impossible to miss, though, is how jacked up emotional intensity has become in American politics. The campaign rallies of both Mr. Trump and Bernie Sanders often sat on the edge of violence. Reporters describe political town hall meetings as full of “angry” voters. Shouting down the opposition in these forums or on campus has been virtually internalized as standard behavior. Refusal to reason is the new normal. And then, the unreason is euphemized as free speech.

Explaining away these impulses as a routine turn of the populist political cycle is insufficient. Something more permanent is happening.”

It is not, of course just the markets which are threatened by unperceived risk. Trump shall not be forgiven for challenging the sacrosant meme of a world divided between (good) ‘liberal’ democracies (led by the US and its European allies) and (bad) illiberal autocracies (led today, by President Putin’s Russia): by snubbing Nato and withdrawing from the Paris climate agreement, Professor Michael Klare writes, “we’ve been told, President Trump is dismantling the liberal world order created by Franklin D Roosevelt at the end of World War II”.

Thomas Cole Destruction of Empire 1836

An offence, it seems, against something somehow sacral: recently, US comedienne Kathy Griffin posted a video of herself holding the bloody, severed head of Donald Trump. “But that wasn’t the end of it” Henninger notes. “We may assume that as Ms. Griffin was creating her video, the artists at New York’s Public Theatre, were rehearsing their production of Julius Caesar, the one in which Central Park audiences watch ‘Caesar’ as a blond-haired Donald Trump, who is pulled down from a podium by men in suits, and assassinated with plunging knives … Whatever once fastened the doors of people’s minds to something secure and stable has become unhinged.”

Mike Vlahos (Professor at the US Naval War college and John Hopkins) tells us that, as a military historian and global strategist, he became curious to know just why it is that ‘world systems’ do ‘come apart’. His first, intuitive sense was that their collapse generally was brought about by some massive external force such as war, pestilence or famine, and by the concomitant mass migrations of peoples.

But when he and his students completed their research, he concluded that though these factors had often played an important part, they were not the prime cause of the system coming apart. Rather, he identified a number of key triggers:

· The élites became stratified, and politics frozen
· The peoples’ allegiance became taken for granted, at the same time that the élites chose to ignore threats to the peoples’ way of life
· Social mobility declined, and change is fiercely resisted
· Rather, élites work to maximize their wealth and status.
· Elite authority becomes excessively militarized – and justified as ‘saving civilization’.

He concludes from this study, “the situation that we inhabit today […] here in the imperial city in Washington DC, is that it is absolutely hollowed out … it is incapable of offering anything to its own people, the American people … I think we have reached a point where there is no possibility of revival within the current system that exists. The current system is set upon … is determined to eat itself out in a kind of civil war that is coming, and at the end of that, it will be done, will be finished”.

“The Methoni, one of the great nations of the late Bronze Age, had this same problem with the élites and the 1% that we have today, and they were overthrown. That’s 3300 years ago, and it keeps happening again and again. And the very structure of the decadent relationships in late periods where élites refuse to accommodate, refuse to adapt, refuse to be sensitive to needs of the larger whole of society, means this has to happen. There has to be an overthrow … for things eventually to get better, to be renewed. In other words, you can’t renew from within”.

Is this the situation today? The pre-conditions that Professor Vlahos relates, in terms of élite hubris, self-regard, and disdain for the real concerns of people are there (the polarization of US society at the US election provides the empirical evidence for this). And Stockman, in calling Trump the ‘Great Disrupter’ plainly implies that he might be precisely the ‘externality’ (coming from outside the élite) – that might tip things ‘over’. This surely is what Stockman means when he warns about ‘the present risk environment’ being extreme.

Of course, the usual retort is that Trump offers no coherent alternative conceptual vision for the future, but only seized successfully upon a number of key insights: the power of cultural nationalism, the pain felt by the casualties of globalism, the impact of a hollowed-out US economy, and the need to put America first. This is true. These insights do not constitute a vision for the future, but why should one expect that, from the ‘Disrupter’? His ‘agency’ is that of catalyst, not that of final ‘constructor’. That comes later.

Thomas Cole Desolation of Empire 1836

So, from whence does ultimate societal renewal come? The classic answer is that after ‘disruption’ nothing much is left standing amidst the (metaphoric) ruins of whatever stood as the reigning ‘modernity’. Historically, renewal was effected through a communal ‘reaching back’- beyond the roots of whatever represented the contemporary crisis – to delve back, deep into the archetypal cultural history of a people. The rummaging in collective memory, allows a narrative to shape, about why the present ‘hurt’ befell its people, and to bring forward, transformed into contemporary meaning, some ‘solution’: a new meta-historical understanding.

Plainly, this (a type of spiritual renewal) is not President Trump’s ‘bag’. (Steve Bannon’s the more so, perhaps?)

What does all this mean in practical terms? First, it suggests that most of us still prefer not to address the stark reality that “the objective of this city (DC), is to bring Trump down, via a deep state-media coup” and the bitter political trench warfare, which this portends. We prefer to rest in complacency, (as zombies for now), until a crisis squarely hits us – in a personal way.

Secondly, thoughts of an easy return to the status quo ante (such as via Vice-President Pence standing-in), is problematic (Macron’s election in France notwithstanding). Since the élites (all of them), have, in their ‘war’ against ‘populists’ and deplorables, totally lost legitimacy and authority for a substantive part of their populations. And they will not – cannot – adapt. For, that is their nature. This is the moment, Professor Vlahos notes, when a system – i.e. US operational governance – begins to ‘come apart’. Individuals, cabals within government, whole departments of state, look to their own self-awarded ‘authority’, rather than to that of the government as mandated by the electorate.

Thus we have this past week, the Senate voting 97-2 to impose further sanctions on Russia. Another wrench jammed into Trump’s foreign policy wheels – and explicitly conceived to paralyse and impede the President.

Thirdly, the intent is – like some Amazonian reptile venom – to ‘bite’ him with so much innuendo and assorted investigations and further allegations, that Trump, like the reptile’s victim, remains awake – but incapable of moving a muscle: A true zombie, in fact, as the reptile feeds on its living corpse.

Fourth, this zombified US President, will shortly face the requirement to negotiate with Congress an exit from a bubbling financial sphere soaring upwards, whilst a moribund real economy trails downwards – under pressure from the fast-approaching debt-ceiling deadline. The Senate’s slap at the President’s face with the Russia sanctions vote suggests it is more likely that he will be tossed another spanner: this time aimed at the wheels of the ‘Trump reflation’ programme.

What other insights might history offer? Two, perhaps: Professor Vlahos, during his discussion with John Batchelor, the latter points out that, even at the very moment that the hub of the Roman Empire already had fallen apart, the collapsing Empire was celebrated the most, when it was imitated at the furthest edges of Empire: by the peoples of Gaul and Germany, for example. Are we not seeing the same today, in Europe, as Merkel and Macron vow to keep the liberal, globalist values of the American Empire alive — at the edges of the American Empire — in Europe?

And lastly, the constituency that historically led renewal? Professor Vlahos: “The Roman legions, the Czarist armies, the German Imperial armies and the Ottoman armies”.

The Pentagon élites should note well.

Debt Rattle June 14 2017

Jun 142017

June 14, 2017 Posted by Raúl Ilargi Meijer at 9:34 am Finance Tagged with: defaults, Dodd-Frank, Lesbos, public pensions, refugees, Rome, Russia, Schaeuble, Trump, UK, vote 17 Responses »

Fred Lyon San Francisco cable car turnaround 1946

• A Record 60% Of Americans Disapprove Of President Trump (ZH)

• Age Is The New Dividing Line In British Politics (YouGov)

• UK Low Income Families Forced To Walk ‘Relentless Financial Tightrope’ (G.)

• Gundlach Says DC Establishment Wants to ‘Wait Trump Out’ (BBG)

• Trump Administration Welshes on “Repeal Dodd Frank” Promise (NC)

• Tillerson Says Allies Pleading With US To ‘Improve Russia Relations’ (RT)

• Are Public Pensions A Thing Of The Past? (CNN)

• Death Of The Human Investor: Just 10% Of Trading Is Regular Stock Picking (C.)

• OPEC Oil Production Jumps In May Despite Output Cuts Deal (CNBC)

• China Defaults Feared as Firms Confront Short Debt Addiction (BBG)

• Greeks Promised Economic Boost Despair of Ever Seeing Debt Deal (BBG)

• Schaeuble Promises Greece Deal With Lenders On Thursday (R.)

• Foreign Buyers Snap Up Greek Property (K.)

• State Of Emergency Declared On Lesvos As 800 Left Homeless (AP)

• ‘Impossible And Risky To Take In More Migrants’ – Rome’s Mayor (RT)

A nation divided.

• A Record 60% Of Americans Disapprove Of President Trump (ZH)

Despite record high stock prices, 43-year lows in jobless claims, and near record-high optimism among small business owners, Gallup reports the percentage of Americans who disapprove of the job President Trump has risen to a record 60% this week. As Gallup details, despite the president’s claim on Monday at a Cabinet meeting that “Never has there been a president, with few exceptions – in the case of F.D.R. he had a major Depression to handle – who’s passed more legislation, who’s done more things than what we’ve done,” his administration has been roiled by controversies. Most recently, Trump ran into a buzz saw of criticism with his decision, announced June 1, to withdraw the U.S. from participation in the Paris climate accord.

He has also been under significant political scrutiny over the June 8 testimony of former FBI Director James Comey before the Senate Intelligence Committee. Those events coincided with the lower averages seen in the past two weeks. But, given that his averages were almost as low in the weeks leading up to them, it is difficult to establish direct causality between specific events and the president’s ratings.

The highly polarized nature of Americans’ views of Trump (and Obama before him) have been well-documented, and that pattern continues: Trump’s 8% average approval rating among Democrats last week is right at his 9% average to date; His 83% approval among Republicans is three points lower than his average among that group; Among independents, his approval is 31%, five points lower than his average among that group; Notably the spread between Republican ‘confidence’ and Democrat ‘confidence’ (via Bloomberg) has not been this wide since before Barack Obama was elected…

Trump’s job approval ratings are the worst of his administration so far, and Trump continues to have the lowest ratings for a newly elected president in Gallup’s history of approval ratings. The previous low first-year approval rating in June for an elected president was Bill Clinton, with a 37% approval June 5-6, 1993. The approval ratings of all other presidents since 1953 in June (May in the case of Eisenhower) of their first year after being elected were above 50%.

Another nation divided, but not along the same lines. Older people, especially pensioners, vote Conservative, and a much higher percentage of them actually vote.

• Age Is The New Dividing Line In British Politics (YouGov)

Since last week’s election result YouGov has interview over 50,000 British adults to gather more information on how Britain voted. This is part of one of the biggest surveys ever undertaken into British voting behaviour, and is the largest yet that asks people how they actually cast their ballots in the 2017 election. The bigger sample size allows us to break the results down to a much more granular level and see how different groups and demographics voted on Thursday. In electoral terms, age seems to be the new dividing line in British politics. The starkest way to show this is to note that, amongst first time voters (those aged 18 and 19), Labour was forty seven percentage points ahead. Amongst those aged over 70, the Conservatives had a lead of fifty percentage points.

In fact, for every 10 years older a voter is, their chance of voting Tory increases by around nine points and the chance of them voting Labour decreases by nine points. The tipping point, that is the age at which a voter is more likely to have voted Conservative than Labour, is now 47 – up from 34 at the start of the campaign.

Despite an increase in in youth turnout, young people are still noticeably less likely to vote than older people. While 57% of 18 and 19 year-olds voted last week, for those aged 70+ the figure was 84%.

Corbyn growth territory.

• UK Low Income Families Forced To Walk ‘Relentless Financial Tightrope’ (G.)

Low-income families are going without beds, cookers, meals, new clothes and other essential items as they struggle to cope with huge debts run up to pay domestic bills, according to a survey highlighting the cost-of-living crisis experienced by the UK’s poorest households. Clients of the debt charity Christians Against Poverty (CAP) had run up an average of £4,500 in debts on rent or utility bills, forcing them on to what the charity described as a “relentless financial tightrope” juggling repayments and basic living costs, leaving many acutely stressed and in deteriorating health. The pressure of coping with low income and debt frequently triggered mental illness or exacerbated existing conditions, with more than a third of clients reporting that they had considered suicide and three-quarters visiting a GP for debt-related problems.

More than half were subsequently prescribed medication or therapy. “The crippling reality of living in poverty and debt is still unashamedly evident in every home we visit, and year on year we see financial difficulty taking a tighter grip,” said Matt Barlow, the UK chief executive of CAP. Experts said the survey highlighted the extreme hardship faced by the “new destitute” – people on low incomes who might in the past have been able to rely on a welfare safety net to help them through financial shocks but who now were forced to go into debt to survive, leaving them struggling to afford even the basics. Debt had a crushing effect on living standards, the CAP survey found, with one in 10 clients unable to afford to buy or repair a bed, washing machine, TV, sofa or fridge. Roughly the same proportion could afford to acquire furniture only on punitive rent-to-buy terms, for example paying £6 a week to acquire a bed and mattress over a set three-year period.

The impact on family life was severe, with a quarter of clients saying debt caused relationship breakdowns, and more than two-thirds saying they felt unable to cater for their children’s needs. A sixth said they could not afford to feed their children three meals a day. A third feared eviction. A tiny handful of clients – predominantly single mothers – reported that they had turned to prostitution to make ends meet. Prof Suzanne Fitzpatrick, of Heriot Watt University, the co-author of groundbreaking research into destitution, told the Guardian: “The new destitute are citizens who would previously have managed to avoid absolute destitution with the help of the welfare safety net. But the level of working age benefits is now so low that people barely managing to get by can easily find themselves in a position where they can’t afford even the basic essentials to eat, stay warm and dry, and keep clean.”

“If you’re a trader or a speculator, I think you should be raising cash today, literally today..”

• Gundlach Says DC Establishment Wants to ‘Wait Trump Out’ (BBG)

DoubleLine Capital’s Jeffrey Gundlach said the establishment in Washington is trying to undermine President Donald Trump by running out the clock on his administration. “They’re really just trying to wait Trump out, trying to obstruct his agenda as much as possible,” Gundlach, one of the few money managers to predict Trump’s election, said during a webcast Tuesday. “Small change is what they’re looking for.” Gundlach, manager of the $53.9 billion DoubleLine Total Return Bond Fund, spoke during televised Senate testimony by Attorney General Jeff Sessions, which the money manager called “a sideshow or entertainment.” He called the U.S. political conflict “rope-a-dope,” a strategy used by boxer Muhammad Ali to wear out opponents.

Among Gundlach’s other observations:
• There’s a low probability of a recession.
• The days of low volatility markets are probably numbered.
• Expect higher bond yields and lower stock prices this summer.
• Yields on 10-year Treasuries are likely to end 2017 roughly in the 2.7% to 2.8% range, from about 2.2% currently.

The Dow Jones Industrial Average and the S&P 500 Index closed at record highs Tuesday prior to Gundlach’s talk. Futures trading implies a 98% probability the Federal Reserve will raise interest rates by 0.25% when it meets Wednesday. “If you’re a trader or a speculator, I think you should be raising cash today, literally today,” Gundlach said. “If you’re an investor, I think you can sit through a seasonally weak period.” The Total Return fund was up 2.7% this year through June 12, beating 84% of its peers, according to data compiled by Bloomberg.

Yves Smith’s piece is too long and comprehensive to do justice here. Click the link.

• Trump Administration Welshes on “Repeal Dodd Frank” Promise (NC)

After having promised banks to get rid of Dodd Frank, which was never a strong enough bill to have a significant impact on profits or industry structure, Trump didn’t even back the House version of the bill to crimp Dodd Frank. But you’d never know that from the cheerleading from bank lobbyists upon the release of a 147 page document by the Treasury yesterday, the first of a series describing the gimmies that the Administration seeks to lavish on banks. As we’ll touch on below, the document repeatedly asserts that limited bank lending post crisis to noble causes like small businesses was due to oppressive regulations. We wrote extensively at the time that small business surveys showed that small businesses then overwhelmingly weren’t interested in borrowing and hiring. Businessmen don’t expand operations because money is cheap, they expand because they see a commercial opportunity.

But the even bigger lie at the heart of this effort is the idea that the US will benefit from giving more breaks to its financial sector. As we’ve written, over the last few years, more and more economists have engaged in studies with different methodologies that come to the same conclusion: an oversized financial sector is bad for growth, and pretty much all advanced economies suffer from this condition. The IMF found that the optimal level of financial development was roughly that of Poland. The IMF said countries might get away with having a bigger banking sector and pay no growth cost if it was regulated well. Needless to say, with the banking sector already so heavily subsidized that it cannot properly be considered to be a private business, deregulating with an eye to increasing its profits is driving hard in the wrong direction.

[..] So if it wasn’t Dodd Frank, what was led the banks to focus so much on high FICO score borrowers? It was mortgage servicing reforms, which made it hard to foreclose due to stopping abuses, like dual tracking (continuing to foreclose even when supposedly considering a mortgage modification). To look at the bigger picture, it’s hard to take bank complaints about oppressive regulation seriously in light of this:

But the domestic echo chamber makes that hard to do.

• Tillerson Says Allies Pleading With US To ‘Improve Russia Relations’ (RT)

All of America’s allies and partners have been calling on Washington to improve its relations with Russia, Secretary of State Rex Tillerson acknowledged after the US Senate reached a bipartisan deal to boost sanctions against Moscow. “I have yet to have a bilateral, one-on-one, a poolside conversation with a single counterpart in any country: in Europe, Middle East, even South-East Asia, that has not said to me: please, address your relationship with Russia, it has to be improved,” Tillerson said on Tuesday during testimony before the Senate Appropriations Committee on Foreign Operations. Tillerson added that the countries urging the US to review its Russian policy “believe worsening this relationship will ultimately worsen theirsituation.” He added: “People have been imploring me to engage and try to improve the situation, so, that was our approach anyway.”

Earlier, Tillerson warned that the US Senate’s bipartisan deal on new set of restrictive measures against Moscow might further worsen relations with Russia and hinder existing efforts on joint US-Russia progress to fight terrorism in Syria. “There are efforts under way in Syria specifically, those are, I would say, progressing in a positive way,” America’s top diplomat said on Tuesday during testimony to the Senate Foreign Relations Committee. Despite the relationship between US and Russia being “at an all-time low,” according to Tillerson, the “objective is to stabilize that” rather than deteriorate it further. Washington is “engaged” and working with Moscow “in a couple of areas,” including on such issues of international importance as the Ukrainian and Syrian crises. “We have some channels that are open, where we are starting to talk, and I think what I wouldn’t want to do is close the channels off,” Tillerson told the Senate committee, warning that to establish “something new… will take time.”

Yes, they are.

• Are Public Pensions A Thing Of The Past? (CNN)

New teachers and state workers will no longer get a traditional pension in Pennsylvania. Governor Tom Wolf signed a bill Monday, making it the ninth state to replace the pension with a “hybrid” retirement plan. It goes into effect in 2019. The new plan combines elements of a traditional pension and a 401(k)-style account. Overall, new workers will contribute more of their salary, work longer, and likely receive a smaller payout in retirement than under the current system, according to a report from the state’s Independent Fiscal Office. But Pennsylvania’s pension system is currently one of the most underfunded in the country and is in need of reform. The bill had bipartisan support. “It’s a win for Pennsylvania taxpayers and fair to Pennsylvania’s workforce,” Wolf said at a press conference Monday.

The reform will build upon previous legislation to help fully fund the pension system and preserve a path to retirement for public workers, said Greg Mennis, a director at Pew Charitable Trusts. “Our research indicates that this would be one of the most – if not the most – comprehensive and impactful reforms any state has implemented,” he wrote in a letter urging state lawmakers to pass the bill. Over the past 10 years, Rhode Island, Virginia, Tennessee and Georgia have created plans similar to Pennsylvania’s. They require workers to contribute some of their salary to a pension-like plan that guarantees a certain payout based on their salary. Workers also contribute to a 401(k)-style plan that they can take with them if they leave public service. The state will make contributions to both plans on their behalf.

In Pennsylvania, workers will be defaulted into a hybrid plan, but there will be two other versions they could opt into. Under the default, workers will have to contribute a total of 8.25% of their salary. (Teachers currently contribute 7.5% and other public workers pay 6.25%.) Most will have to work until 67, instead of 65, in order to get their full payout in retirement. A state employee who works for 35 years and earns a final salary of $60,000, currently receives an estimated $40,000 a year in retirement. Under the reformed system, that same worker would receive $34,1048, according to the Independent Fiscal Office report. [..] Like pension plans in other states, Pennsylvania’s was badly hurt by the Great Recession. It also took a hit because of retroactive benefit increases made before the market took a dive. The pension fund went from a nearly $20 billion surplus in 2000 to a $70 billion deficit in 2015.

ZIRP machines have taken over.

• Death Of The Human Investor: Just 10% Of Trading Is Regular Stock Picking (C.)

Quantitative investing based on computer formulas and trading by machines directly are leaving the traditional stock picker in the dust and now dominating the equity markets, according to a new report from JPMorgan. “While fundamental narratives explaining the price action abound, the majority of equity investors today don’t buy or sell stocks based on stock specific fundamentals,” Marko Kolanovic, global head of quantitative and derivatives research at JPMorgan, said in a Tuesday note to clients. Kolanovic estimates “fundamental discretionary traders” account for only about 10% of trading volume in stocks. Passive and quantitative investing accounts for about 60%, more than double the share a decade ago, he said.

In fact, Kolanovic’s analysis attributes the sudden drop in big technology stocks between Friday and Monday to changing strategies by the quants, or the traders using computer algorithms. In the weeks heading into May 17, Kolanovic said funds bought bonds and bond proxies, sending low volatility stocks and large growth stocks higher. Value, high beta and smaller stocks began falling in a rotation labeled “an unwind of the ‘Trump reflation’ trade,” Kolanovic said. “Upward pressure on Low Vol and Growth, and downward pressure on Value and High Vol peaked in the first days of June (monthly rebalances), and then quickly snapped back, pulling down FANG stocks” — Facebook, Amazon.com, Netflix and Google parent Alphabet, the report said.

Told you those output cuts wouldn’t go anywhere.

• OPEC Oil Production Jumps In May Despite Output Cuts Deal (CNBC)

OPEC’s oil production jumped in May, despite the exporter group agreeing last month to extend its six-month deal to cap output into 2018. Production across OPEC rose by about 336,100 barrels per day to 32.1 million bpd, according to secondary sources, led by increases from Libya and Nigeria, which are exempt from the deal, and Iraq. Output from Libya surged by more than 178,000 bpd to 730,000 bpd as the country’s rival factions moved toward reconciliation, and supplies disrupted throughout years of conflict remained on line. In Nigeria, production was up more than 174,000 bpd to 1.68 million bpd as supplies sidelined by militant attacks on energy infrastructure last year came back into operation. With the gain, Nigeria reclaimed the title of largest African producer in OPEC from Angola, where output fell by 54,000 bpd, the biggest drop among the 13 members in May.

Iraq, OPEC’s second-largest producer, contributed the third-biggest increase with a more than 44,000 bpd jump. Baghdad has yet to cut deeply enough to hit its quota of 4.35 million bpd under the output cut deal. In May, it produced 4.42 million bpd. Only four countries were producing at or below the levels they agreed to in November: Saudi Arabia, Angola, Kuwait, and Qatar. Last month, OPEC and other exporters extended an agreement to remove 1.8 million barrels a day from the market in order to shrink brimming global stockpiles of crude oil. In May, inventories in the OECD, a group of mostly wealthy countries, remained 251 million barrels above the five-year average.

More ground for shadow banks to take over.

• China Defaults Feared as Firms Confront Short Debt Addiction (BBG)

China’s leverage crackdown is forcing local companies to confront their addiction to short-term bond sales that they use to roll over debt. The shock therapy is worsening the outlook for corporate defaults in the second half of this year after borrowing costs jumped to a two-year high. With yields surging, Chinese non-banking firms sold 131 billion yuan ($19.3 billion) of bonds with a maturity of one year or less in May, the least since January 2014 and less than half of the same month last year, according to data compiled by Bloomberg. About 87% of the short note sales last month will be used for refinancing, according to Bloomberg data.

The habit of relying on borrowing short-term money to repay maturing debt has pushed up such liabilities to a total of 5.2 trillion yuan on China’s listed non-financial companies’ balance sheets as of March 31, the highest on record, according to data compiled by Bloomberg. With no sign of an end to the government’s campaign against leverage, the average coupon rate for bonds maturing in one year or less rose to 5.5% in June, deterring issuers from raising money to roll over debt. “Small issuance of short-term bonds will be a normal phenomenon in the coming six months because cash supply will probably remain tight,” said Ma Quansheng at Fullgoal Fund Management. “Both default risks and the number of corporate bond defaults may increase.”

The loose funding environment last year helped Chinese companies raise enough money to withstand repayment pressure so far in 2017. There have been 13 onshore defaults in the public bond market in 2017, compared with 16 in the same period of 2016. The yield on one-year AAA rated company bonds averaged 4.19% this year, up from 2.97% in 2016. HFT Investment Management said more note defaults may come as the economy doesn’t look good. In the second half of this year, Chinese non-banking firms must repay 2.36 trillion yuan of bonds. “The current rising borrowing costs may have a big impact on companies’ operations and finance,” said Lu Congfan at HFT Investment Management. “What can you do when you must refinance to repay maturing debt while facing such high borrowing costs? That would be a question challenging many local companies in the second half or next year.”

Well, well… Let’s see it.

• Schaeuble Promises Greece Deal With Lenders On Thursday (R.)

German Finance Minister Wolfgang Schaeuble said on Tuesday he was confident that Greece and its international lenders will reach a compromise deal this week, a step that would unleash more loans for Athens. “We’ll manage it on Thursday. You’ll see,” Schaeuble said during a panel discussion in Berlin. Officials have said eurozone finance ministers and the IMF are likely to strike a compromise on Greece on Thursday, paving the way for new loans for Athens while leaving the contentious debt relief issue for later. IMF head Christine Lagarde suggested a plan last week under which the Fund would join the Greek bailout now, because Athens is delivering on agreed reforms, but would not disburse any IMF money until the euro zone clarifies what debt relief it can offer Greece.

Greeks don’t believe you, Wolfie…

• Greeks Promised Economic Boost Despair of Ever Seeing Debt Deal (BBG)

Alexis Tsipras has spent nearly two years telling Greeks that a debt deal and inclusion in the ECB’s quantitative-easing program will unleash an investment boom that salves the pain of austerity. The prime minister’s message hasn’t convinced Panagiotis Kouinis, a 60-year-old civil engineer in Corinth who says business has steadily dwindled through all of Greece’s eight-year crisis and has now ground almost to a halt. “What I know is they tell you pensions will be cut another 20%, wages down, and what is quantitative easing?” Kouinis said in an interview in his office near the city center. “Do we have to be economists so we can understand what they’re saying?” Across the country in places like Corinth, an industrial hub 80 kilometers west of Athens, Greeks have spent years treading water as news bulletins bombard them daily with reports of meetings and decisions in Brussels and Frankfurt that will determine their economic future.

In the meantime, as the ECB’s stimulus measures – including its asset-purchase program – buoy the rest of the euro-area economy, Greece’s output has been stagnant, leaving its people the most pessimistic in the region. Yet the ECB remains unlikely to include Greek bonds in its QE program in the foreseeable future, according to a person familiar with the matter. That’s because a meeting on Thursday of euro-area finance ministers, whose electorates are leery of debt relief, looks like delivering another fudge. There may be agreement to disburse more bailout loans but without easing repayment terms enough to satisfy the ECB and IMF. That would leave Tsipras high and dry.

[..] Despite some signs of an improvement in industrial output, Greece has been heavily reliant on consumers and a booming tourist sector to keep GDP – which shrank by a quarter in the early years of the crisis – from continuing its slide. While the economy hasn’t been in a recession since 2015, and grew 0.4% at the start of the year, it hasn’t strung together more than two quarters of consecutive expansion in more than a decade. Accountancy firm PWC said in March that infrastructure investment plunged during the crisis, leaving a backlog of planned and in-progress projects amounting to more than 21 billion euros. Near Corinth, that includes rail, waste management, road and marina developments. “With taxation what it is, not only will no-one come to invest here, but they’d need to be mad to,” said Kouinis, the civil engineer. “Growth needs to start from public works, because the private sector has been killed.”

Foreigners buy apartments in Athens to rent out to other foreigners on Airbnb. So wrong in so many ways.

• Foreign Buyers Snap Up Greek Property (K.)

Property buyers from abroad are this year growing at the fastest pace in a decade, as booming Greek tourism has had a positive impact on the property market too. According to the latest data from the Bank of Greece, in the first quarter of the year the inflow of capital from abroad for real estate acquisitions increased by 61.7% on an annual basis. The March figures have signaled a further improvement, since in the first couple of months the yearly rise had come to 56.7%. If the existing growth rate is sustained throughout 2017, it is likely that by the end of the year more than 430 million euros will have been invested the Greek property market from other countries. The equivalent figure for the whole of 2016 had amounted to 270 million euros, up 45.3% on the 2015 inflow of 186 million euros.

The only time a similar growth rate had been recorded before was in the first quarter of 2007, when foreign investors spent 66.5% more money on property acquisitions than a year earlier. Real estate professionals say this uptick in foreign funds entering the local property market is particularly positive because it came during a period when transactions are usually sparse: Expressions of buying interest this year started in the winter months, not in the summer when demand typically peaks. This has bolstered optimism about an even better summer in terms of transactions, which may reach their high for the entire period since the outbreak of the financial crisis.

The major rise in inflows this year is due to the increase in demand for apartments in Athens, primarily in the city center and the southern suburbs. This mainly concerns flats eligible for short-term leasing through Internet platforms such as HomeAway, Airbnb and FlipKey. It also concerns luxury mansions that would fit the bill for the same type of online platforms as well as for the purpose of getting a Golden Visas (for buys of properties worth 250,000 euros or more by investors from outside the European Union). Besides those buyers aiming for the five-year residence permits, considerable buying interest is also coming from Italy, France, Switzerland, Germany and the Scandinavian countries.

It’s a miracle there are not many more victims.

• State Of Emergency Declared On Lesbos As 800 Left Homeless (AP)

Authorities in Greece have declared a state of emergency on the island of Lesvos after an earthquake left one woman dead and more than 800 people displaced. The 6.1 magnitude undersea quake on Monday occurred south of Lesvos but was felt as far as Istanbul, Turkey. Officials from the island’s regional government on Tuesday said homes in 12 villages in southern Lesvos had been seriously damaged or destroyed. The mostly elderly residents affected were being housed with relatives, in hotels or at an army-run shelter. The earthquake marked the second crisis to hit the island in the last two years, after hundreds of thousands of migrants and refugees, including many fleeing war in Syria and Iraq, crossed to Lesvos on boats from Turkey as they headed to Europe.

Brussels should be forced to take in 100,000. In their new swanky buildings.

• ‘Impossible And Risky To Take In More Migrants’ – Rome’s Mayor (RT)

Rome Mayor Virginia Raggi has asked the Italian Interior Ministry for stricter measures to be taken toward the influx of foreigners into the capital. A letter outlining the need for a “moratorium” on “the continued influx of foreign citizens” was sent by Raggi to Roman prefect Paola Basilone. “I find it impossible, as well as risky, to think up further accommodation structures,” she wrote in the letter, as quoted by La Repubblica on Tuesday. “This administration, given the high flows of unregistered migrants, hopes the assessments of new facilities take into account the evident migrant pressure on Roma Capitale [the City of Rome] and the possible devastating consequences in terms of social costs as well as for the protection of the beneficiaries themselves.”

In May, Raggi told RT that she was working to help accommodate refugees and asylum seekers in Rome, but also that she also has a responsibility to her constituents and other countries in the EU must do their part. “Let’s put it this way – Rome would be better off if European states didn’t build walls along their borders, but rather followed through on their obligations and respected the migrant quotas agreed upon by the EU,” she told RT’s Sophie Shevardnadze. “According to the law, the city of Rome must accept migrants, as Mayor – I have to follow the law and do everything in my power to make sure that people are granted a safe place to stay here. But if other European countries decide to finally follow through on their obligations, we will welcome that decision.” “As mayor of Rome, I have to accommodate migrants, but I am also responsible for the security of my city and its residents. We cannot ignore either issue.”

Why There is Trump

Sep 262016

September 26, 2016 Posted by Raúl Ilargi Meijer at 9:33 pm Finance Tagged with: Barbarians, Brexit, election, failure, Growth, Hillary, paradigm, Rome, Trump 10 Responses »

Dorothea Lange Family of rural rehabilitation client, Tulare County, CA 1938

It’s over! The entire model our societies have been based on for at least as long as we ourselves have lived, is over! That’s why there’s Trump.

There is no growth. There hasn’t been any real growth for years. All there is left are empty hollow sunshiny S&P stock market numbers propped up with ultra cheap debt and buybacks, and employment figures that hide untold millions hiding from the labor force. And most of all there’s debt, public as well as private, that has served to keep an illusion of growth alive and now increasingly no longer can.

These false growth numbers have one purpose only: for the public to keep the incumbent powers that be in their plush seats. But they could always ever only pull the curtain of Oz over people’s eyes for so long, and it’s no longer so long.

That’s what the ascent of Trump means, and Brexit, Le Pen, and all the others. It’s over. What has driven us for all our lives has lost both its direction and its energy.

We are smack in the middle of the most important global development in decades, in some respects arguably even in centuries, a veritable revolution, which will continue to be the most important factor to shape the world for years to come, and I don’t see anybody talking about it. That has me puzzled.

The development in question is the end of global economic growth, which will lead inexorably to the end of centralization (including globalization). It will also mean the end of the existence of most, and especially the most powerful, international institutions.

In the same way it will be the end of -almost- all traditional political parties, which have ruled their countries for decades and are already today at or near record low support levels (if you’re not clear on what’s going on, look there, look at Europe!)

This is not a matter of what anyone, or any group of people, might want or prefer, it’s a matter of ‘forces’ that are beyond our control, that are bigger and more far-reaching than our mere opinions, even though they may be man-made.

Tons of smart and less smart folks are breaking their heads over where Trump and Brexit and Le Pen and all these ‘new’ and scary things and people and parties originate, and they come up with little but shaky theories about how it’s all about older people, and poorer and racist and bigoted people, stupid people, people who never voted, you name it.

But nobody seems to really know or understand. Which is odd, because it’s not that hard. That is, this all happens because growth is over. And if growth is over, so are expansion and centralization in all the myriad of shapes and forms they come in.

Global is gone as a main driving force, pan-European is gone, and whether the United States will stay united is far from a done deal. We are moving towards a mass movement of dozens of separate countries and states and societies looking inward. All of which are in some form of -impending- trouble or another.

What makes the entire situation so hard to grasp for everyone is that nobody wants to acknowledge any of this. Even though tales of often bitter poverty emanate from all the exact same places that Trump and Brexit and Le Pen come from too.

That the politico-econo-media machine churns out positive growth messages 24/7 goes some way towards explaining the lack of acknowledgement and self-reflection, but only some way. The rest is due to who we ourselves are. We think we deserve eternal growth.

And of course it’s confusing that the protests against the ‘old regimes’ and the growth and centralization -first- manifest in the rise of faces and voices who do not reject all of the above offhand. That is to say, the likes of Marine Le Pen, Donald Trump and Nigel Farage may be against more centralization, but none of them has a clue about growth being over. They don’t get that part anymore than Hillary or Hollande or Merkel do.

So why these people? Look closer and you see that in the US, UK and France, there is nobody left who used to speak for the ‘poor and poorer’. While at the same time, the numbers of poor and poorer increase at a rapid clip. They just have nowhere left to turn to. There is literally no left left.

Dems in the US, Labour in the UK, and Hollande’s ‘Socialists’ in France have all become part of the two-headed monster that is the political center, and that is (held) responsible for the deterioration in people’s lives. Moreover, at least for now, the actual left wing may try to stand up in the form of Jeremy Corbyn or Bernie Sanders, but they are both being stangled by the two-headed monster’s fake left in their countries and their own parties.

Donald Trump, and I say this mere hours before the first debate, may still lose the election, but it doesn’t truly matter. He’s just the figure head -dare we say bobble head?- for a development, even a revolution, that he doesn’t control any more than you and I do. He’s got a role to play but he didn’t write it.

If he wins, his program too, like all the others, will be targeted towards more growth, and there’s no such thing available. And while in a no-growth scenario it’ll be a good thing for America to bring jobs back home, as is trump’s message, they won’t spell anything that even comes close to growth.

‘Leaders’ such as Trump and Le Pen can only be seen as intermediate figures necessary for nations, and indeed the world, to adapt to an entirely different paradigm. One that is at best based on consolidation, on trying not to lose too much, instead of trying to conquer the world.

But also one that is likely to lead to warfare and mayhem, because nobody’s been willing to address even the possibility of no more growth, and therefore everyone will be looking to squeeze growth out of any available place, starting with their neighbors, and the globe’s weakest. It’s the Roman empire all over again, where the core strangled the periphery ever harder until the Barbarians and the Visigoths decided it was enough and then some.

That is the meaning of Donald Trump, and of Brexit. You’re not going to understand these things without taking a few steps back, and without looking at history, and especially without acknowledging the possibility that, in economics, perpetual growth may indeed be what physics has always said it was: an impossible pipedream.

Trump has a role to play in this whether he wins the election or not. He’s the big red flashing American warning sign that the increase in poverty that has so far been felt only among those who it has hit, will shake the familiar political landscape on its foundations, and that this landscape will never return.

Look at European political parties established for decades and you see the exact same thing. Only there you often have other ‘escape valves’, because new parties are easier to form and get onto national forums. But it’s still the same thing.

Centralization, globalization, UN, NATO, IMF, all these ‘principles’ and organizations will see their influence and support dwindle, and rapidly. It’s really over. Debt did it. Or rather, our doomed mission to hide our downfall behind a veil of ever more debt did.

And Donald Trump has a role to play in that. If Hillary wins, it’ll only be more, and ever more, and spastically more, attempts to convince everyone that more globalization is the way to go, and that going to war with Putin and sending young Americans into battle in fields lost before they enter is the way of the future.

Both will be failures. All we really get to do is try to decide who may be the lesser failure.

But anyway, that’s where Trump comes from, and he doesn’t understand the half of it. Trump is there because everything else failed. And he will fail too, win or lose.

Debt Rattle June 20 2016

Jun 202016

June 20, 2016 Posted by Raúl Ilargi Meijer at 9:02 am Finance Tagged with: Abenomics, Brexit, China, debt, M5S, recession, refugees, Rome 1 Response »

Harris&Ewing Car exterior. Washington & Old Dominion R.R. 1930

• IMF Calls For Overhaul Of Abenomics (R.)

• The Economy Is Not What It Seems (Roberts)

• Asking Prices For Homes In England And Wales Rise To Record High (G.)

• City of London Fears Brexit Will End Golden Age (BBG)

• Brexit Is The Best Outcome (Gambles)

• Brexit – The End of the Universe (Rose)

• The Progressive Argument For Leaving The EU Is Not Being Heard (G.)

• Economic Gauges Raise Specter of Recession (WSJ)

• Italy PM Renzi Suffers Setback As 5-Star Makes Breakthrough (R.)

• China’s Housing Market in Flux as Price Recovery Tapering Off (BBG)

• Chinese Bare All for Credit (BBG)

• World Refugee Day: 65.3 Million People Displaced (R.)

• Turkish Border Guards Shoot and Kill 8 Syrian Refugees, 3 Children (G.)

The amount of nonsense that can be held in just a few words is breathtaking. Nobody knows what deflation is. The IMF and Shinzo Abe: the deaf and the blind.

• IMF Calls For Overhaul Of Abenomics (R.)

The IMF on Monday urged Japan’s government to overhaul its stimulus policies by moving income policies and labor market reform to the forefront, supported by more monetary and fiscal stimulus. “Under current policies, the high nominal growth goal, the inflation target, and the primary budget surplus objective all remain out of reach within the timeframe set by the authorities,” the IMF said in a statement after “Article 4” annual consultations on economic policy with Japan.

The global lender called for a more flexible monetary policy framework with the Bank of Japan abandoning a specific calendar date for achieving its 2% inflation target. It added that Japan would need to raise the sales tax to at least 15% to strike the right balance between growth and fiscal sustainability. “Without bolder structural reforms and credible fiscal consolidation, domestic demand could remain sluggish, and any further monetary easing could lead to overreliance on depreciation of the yen,” the IMF said.

Strong graphs.

• The Economy Is Not What It Seems (Roberts)

Economic cycles are only sustainable for as long as excesses are being built. The natural law of reversions, while they can be suspended by artificial interventions, can not be repealed. More importantly, while there is currently “no sign of recession,” what is going on with the main driver of economic growth – the consumer? The chart below shows the real problem. Since the financial crisis, the average American has not seen much of a recovery. Wages have remained stagnant, real employment has been subdued and the actual cost of living (when accounting for insurance, college, and taxes) has risen rather sharply. The net effect has been a struggle to maintain the current standard of living which can be seen by the surge in credit as a percentage of the economy.

To put this into perspective, we can look back throughout history and see that substantial increases in consumer debt to GDP have occurred coincident with recessionary drags in the economy.

A nation built on debt.

• Asking Prices For Homes In England And Wales Rise To Record High (G.)

Asking prices for homes in England and Wales have risen to a new record high, and sales are being agreed quicker than at any point since 2010, according to latest figures from the property website Rightmove. The site, which measured asking prices for just under 150,000 properties listed over the past month, said they had risen by 0.8% in June, to an average of £310,471 – 5.5% higher than in June 2015. Asking prices have risen every month so far in 2016, and Rightmove said the rush for properties ahead of April’s stamp duty increase for second homes and the availability of cheap mortgages had supported the market. As a result of increased buyer demand, the average time taken to sell a property dropped to 57 days, compared with 60 in May and 65 in June 2015.

The headline figures do not suggest that the looming EU referendum is having an impact on buyers’ decisions, but Rightmove said there were signs that sellers were sitting tight until the outcome is known. “Fewer new sellers are coming to market, with this month’s numbers being 5.3% below the monthly average for this time of year since 2010,” the monthly report said. “The most reluctant are owners of larger homes, those with four or more bedrooms, with 6.6% fewer sellers over the same time period. Given the well-documented structural shortages of housing supply any longer-term reluctance of owners to come to market would be a worrying trend.”

Far too big.

• City of London Fears Brexit Will End Golden Age (BBG)

Gooses don’t come much more golden than the City of London. The narrow lanes of the Square Mile, lined with handsome neoclassical stone and gleaming modern glass, are at the heart of a British financial sector that paid 66 billion pounds ($94 billion) in tax last year and employs more than 2 million people nationwide. It is oft-resented, has helped push the capital’s house prices out of reach for many, and required a bailout of more than 100 billion pounds from taxpayers less than a decade ago. It is also without a doubt the country’s most lucrative industry. Yet ahead of a June 23 referendum on European Union membership, many of the City’s leading lights are deeply worried about its future.

Since almost exactly 30 years ago, when Conservative Prime Minister Margaret Thatcher liberalized finance through a package of reforms so dramatic they were dubbed the “Big Bang,” London has become the undisputed financial capital of a united Europe – a status that now hangs in the balance. “Just because the City is strong at the moment doesn’t mean that it has a perpetual right to remain so,” said Marcus Agius, 69, the chairman of Barclays during the 2008 global financial crisis. “Brexit would be an act of supreme folly. In the future we would look back and wonder: ‘Why the hell did we do that? What were we thinking?’”

“..remaining in a collapsing tower of bad debt will guarantee a far worse economic outcome and catastrophic confrontations between Europe’s ever narrowing core and ever widening periphery..”

• Brexit Is The Best Outcome (Gambles)

Imagine this week that the exit vote prevails, the U.K. government stands down and in a ripple effect not seen in Europe since the fall of the Berlin Wall, the immediate dissolution of the EU is announced and there is a return to national currencies. Equities would plunge and trading in the euro currency would be suspended. European bourses would go into free-fall, continuing even after the U.K., the U.S. and others initially appear to stabilize. Each country’s no longer fungible euro would be converted into national currencies and chaos would reign until many EU national governments bail out banks. The uncertainty caused would puncture China’s debt bubble, hitting emerging and developed markets.

After a few years of global pain, by 2018 to 2020 peripheral Europe, the U.K., the U.S. and ‘healthier” emerging economies might begin to recover. Recovery in Germany and China, however, may take far longer. Until now Germany has successfully re-imposed the costs of the reckless euro borrowing spree on debtor banks, individuals, corporations and even governments. A break-up of either the euro or the EU would expose German banks’ vulnerable underbellies, having effectively underwritten the euro project in exchange for German control over sovereign budgets. Sounds scary? In my view, this would be the best long term outcome.

However, it’s extremely unlikely to happen. Either U.K. voters will decide to remain or, if the leave campaign wins, the U.K. government and Eurocrats will desperately cling on to power. This may delay the collapse but would leave a far more painful journey with a much more severe conclusion ahead. [..] The EU has already facilitated the destruction of private and sovereign balance sheets with reckless levels of record debt that can never be repaid. This is why leaving now will precipitate a global economic drama. It’s also why remaining in a collapsing tower of bad debt will guarantee a far worse economic outcome and catastrophic confrontations between Europe’s ever narrowing core and ever widening periphery.

“The EU elite feel too secure and have too much to lose.”

• Brexit – The End of the Universe (Rose)

[..] The EU spends millions every year maintaining the illusion that it is one of the great European achievements. The problem is that it has not been the case for a long time. It has become the enforcer of a now-liberal agenda, converting the particular interests of big business into European law. So we have an anti-democratic EU under German hegemony furthering the interests of large corporations – I doubt this is what the people of Europe want or deserve. The words of the British playwright Dennis Potter apply to the current situation in the EU: “They are not interested in our development or emancipation. That is the quality of an occupying force.” This is a conclusion the Greeks reached years ago.

It has been interesting to follow the stages of the Brexit campaign. Initially it seemed to be a referendum concerning David Cameron’s government. Then the role of immigration took centre stage. Now the question of national sovereignty and the lack of democracy in the EU has become an important debating point. There is even a nascent debate among the British left if the EU can be re-democratised, which is rather odd, seeing that it never was a democratic organisation. There seems to be little hope of the EU being reformed. The EU elite feel too secure and have too much to lose. A democratic EU is completely useless for them, especially for the Germans.

Schäuble has recently joined those calling for a stop to further EU integration. Germany no longer needs integration, which implies compromise, when it is already calling the shots. As I was recently in Brussels a member of an NGO explained that Germany is very content with the current EU situation. They dictate policy. There may be resistance here and there, but these cases are never existential for Germany and its clients. Brexit however offers Britain a unique opportunity. Once out of the EU, who are the Tories going to blame when it becomes clear that it is mainly they who are ruining Britain, not the EU or the immigrants?

The closer they try to make the union, the more violent the reactions will be.

• The Progressive Argument For Leaving The EU Is Not Being Heard (G.)

The British economy has become increasingly dominated by the fortunes of the financial sector, with the bankers responsible for the worst slump since the 1930s escaping pretty much scot free. London and the rest of the UK have become two countries, which explains why hostility to the EU increases with distance from the capital. Nor is this phenomenon confined to the UK. It has become commonplace to bracket growing support for leave in poorer parts of Britain with Donald Trump’s emergence as the Republican candidate in this year’s US presidential election, but populist and anti EU sentiment is on the rise across Europe.

The US research company Pew conducted a survey earlier this year to test sentiment towards the EU. In Britain, 48% said they had an unfavourable view of the EU and 44% said they had a favourable view. In France, the anti-EU sentiment was much more pronounced at 61% and 38% in favour, while in Germany there had been an eight-point drop in support for the EU in the past year, leaving those in favour only narrowly ahead at 50% against 48% . The impact of the great recession in Europe has been exacerbated by monetary union, a policy blunder of catastrophic proportions. The euro has been responsible for the slow growth and high unemployment that has angered the French, and the high debts and that have alarmed the Germans.

Stir in the unexpectedly large flows of refugees from the Middle East and North Africa, and you have a toxic mix. Last summer, when the Greek debt crisis was at its most intense, Europe’s leaders came up with a plan. The “five presidents’ report” laid down a step-by-step approach to a United States of Europe, with banking union followed by a common budget and finally political union. Getting even the least controversial part of this agenda – banking union – past sceptical European electorates has proved impossible. Yet the alternative approach, breaking up the euro and giving countries more control over their own economic destiny, is seen as not just potentially dangerous but also a betrayal of the idea of ever-closer union.

Useless talk about how hard forecasting is.

• Economic Gauges Raise Specter of Recession (WSJ)

Gut-wrenching gyrations in financial markets early in the year helped summon the specter of a new recession. Now, warning signs are coming mostly from the U.S. economy itself. Hiring is slowing, auto sales are slipping and business investment is dropping. America’s factories remain weak and corporate profits are under pressure. All are classic signs of an economic downturn, and forecasters have certainly noticed. In a Wall Street Journal survey this month, economists pegged the probability of a recession starting within the next year at 21%, up from just 10% a year earlier. Some economists think the risk is even higher. Whether this proves to be the precursor to a recession or yet another false alarm could take years to sort out.

Uneven economic growth throughout the seven-year expansion has delivered several such scares that passed. But plenty of gauges are pointing to a decent chance of a recession starting within the next 18 months. “Like everybody, I can see clouds on the horizon,” said Stanford University economist Robert Hall, chairman of the National Bureau of Economic Research committee that will—eventually—identify the start date of the next recession. But, he said, “Nobody’s very good at predicting. I don’t even try.” Financial-market convulsions at the start of the year stoked worries about a possible recession. But continued strength in the labor market reassured most economists about the resilience of the expansion, and markets largely calmed.

While the economy is still adding jobs, the recent hiring slowdown has spooked some forecasters. May’s growth in payrolls—just 38,000 jobs—was the weakest month of hiring since U.S. employers stopped shedding jobs in 2010. Barclays economist Michael Gapen noted that since 1960, persistently slower hiring compared with the recovery average, as seen in recent months, “more often than not” was followed by a recession in the next nine to 18 months.

M5S won’t be happy about not getting Milan.

• Italy PM Renzi Suffers Setback As 5-Star Makes Breakthrough (R.)

Italian Prime Minister Matteo Renzi was trounced by the anti-establishment 5-Star Movement in local elections in Rome and Turin on Sunday, clouding his chances of winning a do-or-die referendum in October. The result represented a major breakthrough for 5-Star, which feeds off popular anger over widespread corruption, with the party’s Virginia Raggi, a 37-year-old lawyer, making history by becoming the first woman mayor in the Italian capital. “A new era is beginning with us,” said Raggi, who won 67% of the vote in the run-off ballot. “We’ll work to bring back legality and transparency to the city’s institutions.”

As a consolation for Renzi, his center-left Democratic Party (PD) held on to power in Italy’s financial capital Milan and in the northern city of Bologna, beating more traditional, center-right candidates in both places. Renzi has said he would not step down whatever the results on Sunday. Instead, he has pinned his future on the referendum on his constitutional reform that, he says, will bring stability to Italy and end its tradition of revolving-door governments. But the losses in Rome and Turin suggest he might struggle to rally the nation behind him, with opposition parties lined up to reject his reform and even his own PD divided over the issue.

[..] The PD’s defeat in Rome had been expected after widespread criticism of its management of the city over the past three years, with its mayor forced to resign in 2015 in a scandal over his expenses. But the loss in Turin, a center-left stronghold and home of carmaker Fiat, was a major shock. The incumbent, Piero Fassino, a veteran party heavyweight, was swept aside by 5-Star candidate Chiara Appendino, 31, who overturned an 11-point gap after the first round to win 55% of the vote. “It will be difficult (for the PD) to downplay what happened,” wrote Massimo Franco, leading political commentator for the Corriere della Sera newspaper.

How to make even Bizarro jealous: ..the recovery is almost hitting the ceiling.. That mortgages graph is frightening by the way.

• China’s Housing Market in Flux as Price Recovery Tapering Off (BBG)

The recovery in China’s housing market that helped underpin the economy in the first half is showing signs of tapering off. New-home prices excluding government-subsidized housing climbed in 60 cities in May, down from 65 in April, among the 70 tracked, the National Bureau of Statistics said Saturday. With less of a boost from a recovering property market likely in the second half, the government will need to find other drivers such as infrastructure investment to meet its growth goal of at least 6.5% this year, according to Shen Jianguang at Mizuho. “The housing market is in flux,” Shen said. “The government is likely to step up policies to encourage home-buying in places where demand is weak and inventories of unsold housing are still high as the destocking policy didn’t yield the expected results.

” Faced with a massive pile of unsold homes in smaller cities, the government and central bank since late 2014 had unleashed a range of measures aimed at improving demand for homes to clear the overhang. While inventory levels may not have budged much, mortgage demand has, rising to a record last month, according to the latest data from the central bank. Still, the recovery in home prices last month abated as local governments put curbs in top economic centers like Shanghai and Shenzhen where prices have been surging, while they deployed home-buying stimulus in smaller cities to clear the glut of unsold residences. “This market rebound since last May has been fueled by credit and easing measures, making it unsustainable in some regions,” said Xia Dan at Bank of Communications. “Now the recovery is almost hitting the ceiling.”

Some send nude selfies to get a better loan.

• Chinese Bare All for Credit (BBG)

Talkative people pay back loans. The very talkative default. Too taciturn is no good either. Also, don’t take out a loan at 4 a.m. Those are lessons from online lenders in China that are tracking people’s behavior – via apps on their mobile phones – and taking it into account when deciding what their credit ratings should be. Chinese consumers don’t mind handing over personal details that would spark outrage in the West, in exchange for lower interest rates. The Chinese willingness to share is key to China’s plan to create the largest repository of online data on its citizens and their habits in the world. More than 80% of what’s collected is in the hands of the government, which will make it largely available for private sector use, Chinese Premier Li Keqiang recently told an audience in China that included Dell CEO Michael Dell.

WeLab Ltd., a Hong Kong-based online lender that makes loans in China, looks at what apps people have downloaded, where they go using the phone’s GPS tracker, their social networks and their school records. It offers discounted interest rates for each extra piece of personal information that helps profile customers for credit ratings. In Hong Kong, for example, giving WeLab access to a Facebook account gets a 5% discount on the cost of a loan, and access to LinkedIn gets you 10% off, on loans with interest rates that otherwise reach as high as 20%. “Chinese people have no issue handing over their personal data, giving you their credit card number, giving you their bank account,” said GGV Capital’s Jenny Lee, whose firm has invested in data-hungry tech giants such as Alibaba. “Look at the whole internet finance sector, people are giving you their bank statement so you can do profiling.”

Another record. We’re number 1!

• World Refugee Day: 65.3 Million People Displaced (R.)

A record 65.3 million people were uprooted worldwide last year, many of them fleeing wars only to face walls, tougher laws and xenophobia as they reach borders, the United Nations refugee agency said on Monday. The figure, which jumped from 59.5 million in 2014 and by 50% in five years, means that 1 in every 113 people on the planet is now a refugee, asylum-seeker or internally displaced in a home country. Fighting in Syria, Afghanistan, Burundi and South Sudan has driven the latest exodus, bringing the total number of refugees to 21.3 million, half of them children, the UNHCR said in its “Global Trends” report marking World Refugee Day.

“The refugees and migrants crossing the Mediterranean and arriving on the shores of Europe, the message that they have carried is that if you don’t solve problems, problems will come to you,” U.N. High Commissioner for Refugees Filippo Grandi told a news briefing. “It’s painful that it has taken so long for people in the rich countries to understand that,” he said. “We need action, political action to stop conflicts, that would be the most important prevention of refugee flows.” A record 2 million new asylum claims were lodged in industrialized countries in 2015, the report said. Nearly 100,000 were children unaccompanied or separated from their families, a three-fold rise on 2014 and a historic high.

Germany, where one in three applicants was Syrian, led with 441,900 claims, followed by the United States with 172,700, many of them fleeing gang and drug-related violence in Mexico and Central America. Developing regions still host 86% of the world’s refugees, led by Turkey with 2.5 million Syrians, followed by Pakistan and Lebanon, the report said.

Our friend Erdogan.

• Turkish Border Guards Shoot and Kill 8 Syrian Refugees, 3 Children (G.)

Eight Syrian refugees have been shot dead by Turkish border guards as they tried to escape war-torn northern Syria, a human rights watchdog has claimed. Three children, four women and one man were killed on Saturday night, according to the Syrian Observatory for Human Rights. It said a total of 60 Syrian refugees had been shot at the border since the start of the year. Six of this weekend’s casualties were from the same family, said the observatory’s founder, Rami Abdelrahman. “I sent our activists to hospital there, we have video [of the corpses], but we haven’t published it because there are children [involved],” he said.

The Local Coordination Committees, a network of activists inside Syria, supported the claim, reporting that one of the children was as young as six. Syrian refugees have been making illegal crossings of the Turkish border as Jordan, Turkey and Lebanon have made it virtually impossible for them to leave Syria legally. There have been reports of shootings on the border since at least 2013, and rights groups fear that the number of incidents has increased since European countries, including Britain, began pressing Turkey to curb migration flows towards Europe late last year.

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