Sep 302017
 
 September 30, 2017  Posted by at 8:45 am Finance Tagged with: , , , , , , , ,  


Vincent van Gogh Boulevard de Clichy, Paris 1887

 

Trump’s 1,500-word Airball (Stockman)
Puerto Rico Supply Failure Stops Food, Water Reaching Desperate Residents (G.)
Abenomics: Bat-Shit-Crazy (Muir)
Congress Can Give Every American A Pony (Kelton)
Homeowners Face Double Whammy Of Interest Rates And Slumped Market (Ind.)
ECB Wants to Weed Out Smaller Banks to Cut Competition (DQ)
VW’s Dieselgate Bill Hits $30 Billion After Another Charge (R.)
Could Ryanair’s ‘Pilotgate’ Spell The End Of Cheap Flights? (Ind.)
Citizens United No More (Jim Kunstler)
The Slimy Business of Russia-gate (Robert Parry)
Catalan Government Says Millions Will Turn Out For Referendum (G.)
Aid Programs Are Designed To Keep Countries In Poverty (Ren.)

 

 

The White House should consult with Stockman. He’s been there. This is going nowhere good. “..after nine months of work these geniuses have come up with $6 trillion of easy to propose tax rate cuts and virtually no plan whatsoever to pay for them..”

Trump’s 1,500-word Airball (Stockman)

The Donald’s strong point isn’t his grasp of policy detail. The nine page bare-bones outline released yesterday is nothing more than an aspirational air ball that lacks virtually every policy detail needed to assess its impact and to price out its cost. It promises to shrink the code to three rates (12%, 25%, 35%), for example. But it doesn’t say boo about where the brackets begin and end compared to current law. Needless to say, a taxpayer with $50,000 of taxable income who is on the 15% marginal bracket today might wish to know whether he is in the new 12% or the new 25% bracket proposed by the White House. After all, it could change his tax bill by several thousand dollars. Similarly, to help pay for upwards of $6 trillion of tax cuts over the next decade, it proposes to eliminate “most” itemized deductions. These “payfors” would in theory increase revenues by about $3 trillion.

Then again, the plan explicitly excludes the two biggest deductions – the charitable deduction and mortgage deduction – which together account for $1.3 trillion of that total. And it doesn’t name a single item among the hundreds of deductions that account for another $1 trillion of current law revenue loss. They’re just mystery meat to be stealthily extracted during committee meetings after Congressman have run the gauntlet of lobbyists prowling the halls outside. Stated differently, after nine months of work these geniuses have come up with $6 trillion of easy to propose tax rate cuts and virtually no plan whatsoever to pay for them. In fact, this latest nine pages of puffery contains just 1,500 words – including obligatory quotes from the Donald and page titles. I hate to get picky, but the Donald’s team has been on the job for 250 days now. And all they came up with amounts to just three words each per day in office.

Read more …

Blaming Puerto Rico on Trump as well is cheap and easy. The Jones Act must go, but Congress has left it intact. So have successive presidents.

Puerto Rico Supply Failure Stops Food, Water Reaching Desperate Residents (G.)

Nine days after Hurricane Maria struck Puerto Rico, thousands of containers of food, water and medicine are stuck in ports and warehouses on the island, as logistical problems continue to stop desperately needed supplies from reaching millions of Americans. In many parts of the US territory, food, medicine and drinking water are scarce, and amid a growing humanitarian crisis, local researchers have suggested the death toll could be much higher than the 16 deaths reported so far. On Thursday, the White House temporarily waived the Jones Act – the 1920 legislation which had prevented foreign ships from delivering supplies from US ports to Puerto Rico. But the breakdown of the island’s supply chain has left many concerned that the move will not be enough to get goods to the people who need them most.

Yennifer Álvarez, a spokesperson for Puerto Rico’s governor, said about 9,500 shipping containers filled with cargo were at the port of San Juan on Thursday morning as the government struggled to find truckers who could deliver supplies across the island. The delivery issue is aggravated by an intense shortage of gasoline. About half of Puerto Rico’s 1,100 gas stations are out of action; at those that are open, people have been queuing for up to nine hours to buy fuel for vehicles or the generators which have become essential since the island is still without electricity. Rafael Álvarez, vice-president of Méndez & Co, a food distribution company based in San Juan, said he was worried that if fuel was not efficiently distributed soon, people might get desperate. “I really hope things are worse today than they are going to be tomorrow,” he said.

“People are getting very anxious with the heat and the lack of easily accessible drinkable water.” Because of Puerto Rico’s crippling economic crisis, few people had the money to afford more than a week’s worth of emergency supplies, said Alvarez. But if fuel was readily available, Alvarez said, goods could be efficiently delivered around the island and generators would reliably function, resolving many of the territory’s most pressing concerns. Alvarez’s warehouse is at 100% capacity with shelf-stable products including cereals, granola bars and pasta sauce. Yet although the goods are ready to move to local grocery stores, only around 25% of his normal distribution fleet is available, because of the shortage of fuel or damage inflicted by the storm. And few stores are open because they need diesel to power their generators.

“The food industry is really intact except for diesel fuel,” Alvarez said. “We need diesel fuel to operate.” Federal and state officials have said there is enough diesel on the island, but it too has been difficult to distribute. “You know, the gas and fuel issue is not a matter of how much do we have – it’s a matter of how we can distribute it,” Puerto Rico’s governor, Ricardo Rosselló, told NPR.

Read more …

“And just like that, Abeconomics was born. Since then the Bank of Japan balance sheet has swelled from 30% of GDP to 95%!”

Abenomics: Bat-Shit-Crazy (Muir)

Between 1999 and 2012, the Bank of Japan increased their balance sheet threefold, raising it from 10% of GDP to 30%. Many a pundit screamed about Japan’s irresponsible monetary policy, but then the 2008 Great Financial Crisis hit, and suddenly the BoJ’s policies didn’t seem that extreme. The Fed embarked on a massive quantitative easing program, followed by most of the rest of the developed world. Next thing you knew, the Bank of Japan’s bloated balance sheet seemed like just one of many. Post GFC, the rate at which these other Central Banks were expanding their balance sheet put extreme stress on the Japanese economy as the BoJ’s relatively tame quantitative easing policy was overwhelmed by the rest of the world. Global deflation was exported to Japan. And just when things couldn’t get worse, Japan was hit by the tsunami/nuclear disaster.

Paradoxically, this caused a spike in the USDJPY rate down to 75, with the Yen hitting an all-time high value against the US dollar. This proved the final straw for the Japanese people, and Prime Minister Abe was elected on a platform of breaking the back of deflation through innovative extreme policies. And just like that, Abeconomics was born. Since then the Bank of Japan balance sheet has swelled from 30% of GDP to 95%! It’s too easy to take this for granted. The blue tickets just seem to keep coming, and coming, and coming. Pretty soon, it all seems so normal. But it isn’t. Not even close. This is bat-shit-crazy monetary expansion. Forget about arguing whether it is appropriate or needed. It doesn’t matter. The markets don’t give a hoot about your opinion. Nor does the BoJ. Heck, they barely even care what Yellen or Trump thinks.

They are going to do what they think best for their people, and that means inflating the shit out of their currency. What I find amazing is how complacent the markets have become about all of this. Sure when Abeconomics first came to pass there were tons of worrisome hedge fund presentations about the inevitability of disaster. But since then Kyle Bass and all the other Japan skeptics have moved on to China, or to the most recent hedge-fund-herding-theme-of-the-day. Yet at one point a few years back a reporter asked Kyle if he could put on one trade for the next decade and couldn’t touch it, what would it be? Bass answered gold denominated in Yen. I have this sneaking suspicion our favourite Texas hedge fund manager’s call was way more prescient than even he imagines (I just hope Kyle hasn’t taken it all off to bet on the China collapse.)

Read more …

At the very least the topic warrants a serious discussion. Just saying Stephanie’s crazy is not that.

Congress Can Give Every American A Pony (Kelton)

In her new book, Hillary Clinton mocks Sen. Bernie Sanders’ populist agenda. BERNIE: I think America should get a pony. HILLARY: How will you pay for the pony? You might find Clinton’s question intuitively reasonable. If you promise to fight for big things, then you should draw a detailed road map to the treasure chest that will fund them all. After all, the money has to come from somewhere. But what if I told you that your intuition was all wrong? What if it turned out that the government really could give everyone a pony — and a chicken and car? That is, so long as we could breed enough ponies and chickens and manufacture enough cars. The cars and the food have to come from somewhere; the money is conjured out of thin air, more or less.

When Clinton asks where the money will come from, she’s ordering the government’s fiscal operations like so:
1. Government collects money from us in the form of taxes (T)
2. Government figures out how much it wants to spend and then borrows any additional money it needs (B)
3. Government spends the money it has collected (S)

Since none of us learned any differently, most of us accept the idea that taxes and borrowing precede spending – TABS. And because the government has to “find the money” before it can spend in this sequence, everyone wants to know who’s picking up the tab. There’s just one catch. The big secret in Washington is that the federal government abandoned TABS back when it dropped the gold standard. Here’s how things really work:
1. Congress approves the spending and the money gets spent (S)
2. Government collects some of that money in the form of taxes (T)
3. If 1 > 2, Treasury allows the difference to be swapped for government bonds (B)

In other words, the government spends money and then collects some money back as people pay their taxes and buy bonds. Spending precedes taxing and borrowing – STAB. It takes votes and vocal interest groups, not tax revenue, to start the ball rolling. If you need proof that STAB is the law of the land, look no further than the Senate’s recent $700-billion defense authorization. Without raising a dime from the rest of us, the Senate quietly approved an $80-billion annual increase, or more than enough money to make 4-year public colleges and universities tuition-free. And just where did the government get the money to do that? It authorized it into existence.

Read more …

The future inside all housing bubbles. And there are more of those than anyone acknowledges.

Homeowners Face Double Whammy Of Interest Rates And Slumped Market (Ind.)

Homeowners are facing a twin blow of increased mortgage payments and a slowing housing market, with London prices falling for the first time in eight years. Across the UK the average price of a home increased at its slowest slowest pace in more than four years in September, Nationwide said on Friday. The news came shortly after Bank of England governor Mark Carney gave his clearest signal yet that the central bank’s Monetary Policy Committee would raise its benchmark interest rate from 0.25%. “What we have said, that if the economy continues on the track that it’s been on, and all indications are that it is, in the relatively near term we can expect that interest rates would increase somewhat,” he told BBC Radio 4’s Today Programme, on Friday. A rate hike would mean more expensive home loans for homeowners who have grown used to ultra-low interest rates.

The MPC meets on 2 November to make its decision and a rate rise would be the first in more than a decade. Any increase is expected to be small but would place additional strain on households already stretched amid higher inflation and weak wage growth. A 0.25% rise would mean a person with a £200,000 mortgage on the average UK variable rate of 4.6% would pay an extra £28.72 per month. An increase of 1% would add an extra £117.10 to payments, though this scenario is not expected to become a reality in the short term. Higher payments could prove painful for homeowners, especially as the housing market begins to stutter. London house prices fell 0.6% in the year to September, Nationwide said – the first annual drop since the aftermath of the financial crisis in 2009. It was the first time since 2005 that London was the worst performing region in the country.

Read more …

Centralization is dead.

ECB Wants to Weed Out Smaller Banks to Cut Competition (DQ)

The biggest financial problem in Europe these days is that it is “over-banked,” according to Daniele Nouy, Chair of the ECB’s Supervisory Board, and thus in charge of the Single Supervisory Mechanism, which regulates the largest 130 European banks. In a speech bizarrely titled “Too Much of a Good Thing: The Need for Consolidation in the European Banking Sector,” Nouy blamed fierce competition for squeezing profits for many of Europe’s banks while steadfastly ignoring the much larger role in the profit squeeze played by the ECB’s negative-interest-rate policy. ECB President Mario Draghi agrees. The profits of the largest 10 European banks rose by only 5% in the first half of 2017, compared to 19% for the US banks, which benefited from higher interest rates, stronger capital markets, better capitalization, and larger market shares, according to a new report by Ernst and Young.

In its latest annual health check of European banks, Bain Capital found that 31 institutions, or 28% of the 111 financial institutions they assessed, are in the “high-risk” quadrant. Location seemed to be a far more important factor than size. Banks in Italy, Greece, Portugal and Spain have become “a breed apart in continued distress,” the report said, adding: “Every single bank that has failed in the past decade and for which there are financial statements available…fell into this quadrant before their demise.” Scandinavian, Belgian, and Dutch banks figured prominently among the 38% of the banks that attained the strongest position, outperforming on virtually all financial indicators. By contrast, many German and UK banks fell into the second category, that of “weaker business model.” In fact, virtually all the large German names fit into this category as their profitability and efficiency languish at levels comparable with their Greek counterparts.

They include Deutsche Bank, which in the midst of its third revamp in so many years, just reported its worst revenues in three and a half years. Deutsche Bank is far from alone. The dismal reality is that nine long years after the global financial crisis began, many systemic European banks pose as big a risk to the financial system, if not bigger, as they did back then. The only major difference is that now they’re hooked on Draghi’s myriad monetary welfare schemes (LTRO, TLTRO I and II…), which have managed to keep them afloat even as the ECB’s monetary policy puts a massive squeeze on their lending margins by driving interest rates to unfathomably low levels. But rather than raising interest rates — a scary thought given how major Eurozone economies like Italy and Spain have come to depend on QE to keep servicing their public debt — the ECB plans to reduce competition in the banking sector by weeding out smaller banks.

It’s a process that is already well under way, as Nouy explained in her speech: “Since 2008, the number of banks in the euro area has declined by about 20%, to around 5,000. And the number of bank employees has fallen by about 300,000, to 1.9 million. Total assets of the euro area banking sector peaked in 2012 at about 340% of GDP. Since then, they have fallen back to about 280% of GDP.” But this is not about shrinking the size of the banking sector; it’s about shrinking the number of players within it and in the process creating trans-European banking giants. To achieve that goal, all Europe needs are “brave banks” that are willing to conquer new territory: “Cross-border mergers would do more than just help the banking sector to shrink. They would also deepen integration. And this would take us closer to our goal of a truly European banking sector.”

Read more …

Time for Merkel to stop cozying up to carmakers.

VW’s Dieselgate Bill Hits $30 Billion After Another Charge (R.)

Volkswagenis taking another $3 billion charge to fix diesel engines in the United States, lifting the total bill for its emissions test cheating scandal to around $30 billion. Shares in the German carmaker fell as much as 3% on Friday, as traders and analysts expressed dismay the company was still booking charges two years after the scandal broke. “This is yet another unexpected and unwelcome announcement from VW, not only from an earnings and cash flow perspective but also with respect to the credibility of management,” said Evercore ISI analyst Arndt Ellinghorst. Europe’s biggest automaker admitted in September 2015 it had used illegal software to cheat U.S. diesel emissions tests, sparking the biggest business crisis in its 80 year history. Before Friday, it had set aside 22.6 billion euros ($26.7 billion) to cover costs such as fines and vehicle refits.

On Friday, it said hardware fixes were proving tougher than expected, as it booked an additional 2.5 billion euro provision. “We have to do more with the hardware,” a VW spokesman said, adding U.S. customers were having to wait longer for their cars to be repaired. The news relates to the program to buy back or fix up to 475,000 2 liter diesel cars. In Europe, where only a software update is required for the 8.5 million affected cars, besides a minor component integration for about 3 million of those, fixes are running smoothly, the spokesman added. The additional provision will be reflected in third-quarter results due on Oct. 27, VW said. Ellinghorst, who has an “outperform” rating on VW shares, expects the company to report third-quarter group earnings before tax and interest of €4.04 billion. “You have to ask if this is a bottomless pit,” said one Frankfurt-based trader of the U.S. charges.

Read more …

Something needs to stop it.

Could Ryanair’s ‘Pilotgate’ Spell The End Of Cheap Flights? (Ind.)

Ryanair has apologised to 800,000 passengers for cancelling their flights because of a pilot shortage, and then misleading them about their rights. But an obligation to meet travellers’ out-of-pocket expenses has raised fears that airlines’ costs – and fares – could soar because of demands for recompense. Airlines who cancel flights appear to have an open-ended liability for out-of-pocket expenses, which could include anything from tickets for an FC Barcelona Champions’ League football match to lost wages. The payments are additional to EU requirements to cover hotel rooms and meals connected with flight disruption. Costs could feed through to more expensive tickets – which, with supply reduced because of mass cancellations by Ryanair, are already rising.

[..] The Civil Aviation Authority (CAA) had demanded a statement from Ryanair explaining its obligations under European passengers’ rights rules. The airline complied shortly before the 5pm deadline. The statement explains in unprecedented detail the options open to passengers whose flights are cancelled: a Ryanair flight, if one is available on the same route on the same or next day; a Ryanair flight from a nearby airport; a flight on one of Ryanair’s seven “disruption partner airlines”, including easyJet, Jet2, Aer Lingus and Norwegian; or “comparable alternative transport” by air, rail or road. Europe’s biggest budget airline also promises to “reimburse any reasonable out-of-pocket expenses incurred by customers as a result of these flight cancellations”.

Passengers who have already accepted a refund or alternative Ryanair flight are able to reconsider, while those who have booked on a rival airline can claim the difference in fare paid. The improved offer to passengers could double Ryanair’s previous estimate of €50m in extra costs because of the debacle. This represents less than 5% of its expected full-year profit. But the obligation to refund “any reasonable out-of-pocket expenses” could add significantly more. “This could open the floodgates to claims,” said one senior aviation executive.

[..] The move came two weeks after Ryanair began to cancel hundreds of flights at very short notice, having “messed up” rostering of pilots. It initially cancelled a tranche of 2,100 departures until the end of October, saying that its winter programme would be unaffected. But on 27 September Ryanair said it would ground 25 of its jets this winter – representing one-16th of its fleet – and cut 18,000 flights from the schedules. By giving more than two weeks’ notice of cancellations, the airline avoided the obligation to pay cash compensation. Affected passengers were emailed with two options: a refund, or re-booking on a different Ryanair flight. The option to fly on a rival airline at Ryanair’s expense was not mentioned – an omission that infuriated the CAA’s chief executive, Andrew Haines.

Read more …

“..Okefenokee Swamp of identity politics and Russia paranoia..”

Citizens United No More (Jim Kunstler)

I have an idea for the political party out of power, the Democrats, sunk in its special Okefenokee Swamp of identity politics and Russia paranoia: make an effort to legislate the Citizens United calamity out of existence. Who knows, a handful of Republicans may be shamed into going along with it. [..] corporations have not always been what they are deemed to be today. They evolved with the increasingly complex activities of industrial economies. Along the way — in Great Britain first, actually — they were deemed to exist as the equivalent of legal persons, to establish that the liabilities of the company were separate and distinct from those of its owners. In the USA, forming a corporation usually required an act of legislation until the late 19th century.

After that, they merely had to register with the states. Then congress had to sort out the additional problems of giant “trusts” and holding companies (hence, anti-trust laws, now generally ignored). In short, the definition of what a corporation is and what it has a right to do is in a pretty constant state of change as economies evolve. [..] This homework assignment should be given to the Democratic members of congress, since they are otherwise preoccupied only with hunting for Russian gremlins and discovering new sexual abnormalities to protect and defend.

The crux of the argument is that corporations cannot be said to be entirely and altogether the equivalent of persons for all legal purposes. In law, corporations have duties, obligations, and responsibilities to their shareholders first, and only after that to the public interest or the common good, and only then by pretty strict legal prescription. It may be assumed that the interests of corporations and their shareholders are in opposition to, and in conflict with, the public interest. And insofar as elections are fundamentally matters of the public interest, corporations must be prohibited from efforts to influence the outcome of elections.

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“.. we are now in a phase of Russia-gate in which NGO “scholars” produce deeply biased reports and their nonsense is treated as front-page news..”

The Slimy Business of Russia-gate (Robert Parry)

The “Field of Dreams” slogan for America’s NGOs should be: “If you pay for it, we will come.” And right now, tens of millions of dollars are flowing to non-governmental organizations if they will buttress the thesis of Russian “meddling” in the U.S. democratic process no matter how sloppy the “research” or how absurd the “findings.” And, if you think the pillars of the U.S. mainstream media – The Washington Post, The New York Times, CNN and others – will apply some quality controls, you haven’t been paying attention for the past year or so. The MSM is just as unethical as the NGOs are. So, we are now in a phase of Russia-gate in which NGO “scholars” produce deeply biased reports and their nonsense is treated as front-page news and items for serious discussion across the MSM.

Yet, there’s even an implicit confession about how pathetic some of this “scholarship” is in the hazy phrasing that gets applied to the “findings,” although the weasel words will slip past most unsuspecting Americans and will be dropped for more definitive language when the narrative is summarized in the next day’s newspaper or in a cable-news “crawl.” For example, a Times front-page story on Thursday reported that “a network of Twitter accounts suspected of links to Russia seized on both sides of the [NFL players kneeling during the National Anthem] issue with hashtags, such as #boycottnfl, #standforouranthem and #takeaknee.” The story, which fits neatly into the current U.S. propaganda meme that the Russian government somehow is undermining American democracy by stirring up dissent inside the U.S., quickly spread to other news outlets and became the latest “proof” of a Russian “war” against America.

However, before we empty the nuclear silos and exterminate life on the planet, we might take a second to look at the Times phrasing: “a network of Twitter accounts suspected of links to Russia.” The vague wording doesn’t even say the Russian government was involved but rather presents an unsupported claim that some Twitter accounts are “suspected” of being part of some “network” and that this “network” may have some ill-defined connection – or “links” – to “Russia,” a country of 144 million people. It’s like the old game of “six degrees of separation” from Kevin Bacon. Yes, perhaps we are all “linked” to Kevin Bacon somehow but that doesn’t prove that we know Kevin Bacon or are part of a Kevin Bacon “network” that is executing a grand conspiracy to sow discontent by taking opposite sides of issues and then tweeting.

Read more …

What will Barcelona look like on Monday morning?

Catalan Government Says Millions Will Turn Out For Referendum (G.)

The Catalan government has laid out its plans for the referendum on independence from Spain, claiming that more than 7,200 people will staff 2,315 polling stations across the region to stage a vote that has triggered the country’s worst territorial crisis since its return to democracy four decades ago. On Friday afternoon, the pro-independence regional government unveiled plastic ballot boxes and predicted that 60% of Catalonia’s 5.3 million eligible voters would head to the polls on Sunday in defiance of the Spanish government, the police and the courts. “Catalans will be able to vote,” said the region’s vice-president, Oriol Junqueras. “Even if someone attacks a polling station, Catalans will still be able to vote.” Junqueras gave no further details but called on people to behave responsibly and to ignore the “provocations of those who want to stop the vote”.

His words were echoed by the Catalan president, Carles Puigdemont, who told Reuters: “I don’t believe there will be anyone who will use violence or who will want to provoke violence that will tarnish the irreproachable image of the Catalan independence movement as pacifist.” On Friday afternoon, a large convoy of tractors driven by Catalan farmers and flying independence flags rolled into Barcelona to show support for the vote and to protest against moves to halt it. Both the Spanish government and the country’s constitutional court have declared the vote illegal. Over the past 10 days, the authorities have stepped up their efforts to stop the referendum, arresting 14 senior Catalan government officials, shutting down referendum websites, and seizing millions of ballot papers. Spain’s interior ministry has deployed thousands of extra police officers to the region and the infrastructure ministry announced on Friday that the airspace over Barcelona would be closed to helicopters and light aircraft until Monday.

Read more …

Nothing new.

Aid Programs Are Designed To Keep Countries In Poverty (Ren.)

The income gap between rich countries and poor countries is not diminishing. It has been increasing dramatically, and not only during colonialism. Since the 1960s, the income gap between north and south has tripled. “There’s something fundamentally wrong and it won’t be changed with a bit of aid here in there,” Hickel says. “We need to fundamentally restructure the global economy and make it fair.” Hickel’s central thesis is that there is nothing natural about poverty. His book examines structurally determined behaviour, designed in fact, to deliver the poverty outcomes we witness around the world. “One of the dominant understandings out there that I seek to question in the book is the idea that rich countries are giving aid to poor countries in any meaningful quantity,” he says.

“In fact there is a lot of aid given – it’s about $130 billion per year transferred from rich countries to poor countries. That’s an enormous amount of money.” Some of the money comes in the form of charity. A lot of it in the form of loans, with debt strings – and conditions – attached. “A lot of the aid that’s given comes with conditions attached that the recipients of the aid have to implement certain economic policies, or have to votes with the donor country in UN agreements and so on,” says Hickel. “There’s no free lunch.” “But even if we assume that there was a free lunch, that $130 billion dollars are really being transferred for free from rich countries the poor countries, even that is misleading because in fact vastly more than that amount flows in the opposite direction – from poor countries to rich countries – for all sorts of reasons.

“The biggest one is probably illicit financial flows, most of which are in the form of tax evasion by major multinational companies operating in the global south, headquartered often in rich countries that are effectively stealing wealth, their profits from global south countries and stashing them away in tax havens because of rules written by the WTO that make this practice possible.” The World Trade Organisation basically governs the rules of global trade, for the most part, centrally. It is a very anti-democratic institution, where the vast majority of bargaining power has long been in the hands of a handful of countries which get to determine rules that end up serving their interests. “That’s one of the reasons that we see these financial flows in such magnitude,” says Hickel.

“These financial flows outstrip the aid budget by a factor of 10. So for every dollar of aid that poor countries receive, they lose 10 dollars to multinational tax havens. Another one is debt service. Poor countries pay $200 billion per year in debt service to banks in rich countries. “And that’s just the interest payments on debts, many of which have been paid-off already many times over, some of which are accumulated by legitimate dictators. That’s a direct cash transfusion from from poor to rich. That outstrips the aid budget by a factor or two.”

Read more …

Jun 302017
 
 June 30, 2017  Posted by at 9:35 am Finance Tagged with: , , , , , , , , , ,  


Claude Monet Impression Sunrise 1872

 

Trump Travel Ban Goes Into Effect Amid New Court Challenge (BBG)
Yes, Ms. Yellen…There Will Be Another Financial Crisis (Roberts)
Car Deals: Must Be Subprime, Must Finance Through Chrysler Capital (Mish)
Signs Of An Auto Bubble: Dealer Offers “Low Credit Score Discount” (ZH)
Japan May Industrial Output Slumps At Steepest Pace In Over 6 Years (R.)
Bob Woodward Chides NYT, Mainstream Media: ‘Fair Mindedness is Essential’ (DC)
Russia-gate Is A Scandal In Search Of A Specific Crime (Robert Parry)
New York Times Forced To Retract Longstanding Lie About Russian Hacking (M.)
Maria Bartiromo Slams John Podesta Over His Ties To Russia (PFW)
Comey Friend Unveils “Smoking Gun” Nothingburger (ZH)
Peace is Popular (Ron Paul)
Greece Garbage Cleanup Begins As Workers Halt Strike Action (K.)
Italy Threatens To Turn Away Foreign NGO Ships With Rescued Migrants (dpa)
Closing Italian Ports ‘A Cry For Help’, Say Weary Crew Of Rescue Boat (G.)

 

 

Let’s have it, so the courts can hold all points of view against the light of the law.

Trump Travel Ban Goes Into Effect Amid New Court Challenge (BBG)

The Trump administration’s revised travel ban faced a new court challenge as soon as it took effect Thursday after the president’s signature immigration policy already weathered months of protests, legal wrangling and delays. A new set of restrictions on refugees and immigrants from six predominantly Muslim countries took effect at 8 p.m. EDT. The administration said the rules should help prevent the chaotic airport scenes witnessed when President Donald Trump’s initial order was abruptly imposed in January. But a half-hour before the ban took effect, Hawaii asked a judge to clarify whether the government violated instructions from the U.S. Supreme Court in defining who’s covered by the ban and who’s excluded.

If implemented as intended, the travel restrictions would allow Trump to declare partial victory on his campaign promise to stem the flow of refugees and travelers from nations he deems a security risk. Lower court decisions to uphold two of his proposed travel bans were early, public defeats for the administration in its initial weeks. To minimize disruptions this time, the State Department, Homeland Security Department and Justice Department coordinated in advance to establish clearer guidelines for thousands of consular officers, airlines and travelers. And unlike in January, when hundreds of travelers arriving in the U.S. were turned back or detained at airports, those already holding a valid visa will be let in. “The American public could have legitimate concerns about their safety when we open our doors,” State Department spokeswoman Heather Nauert said at a briefing Thursday.

“We want to open our doors to people who are willing to go through proper screening measures and who want to be here and want to be productive members of our society.” The latest effort followed a U.S. Supreme Court ruling this week that travelers from the six nations – Iran, Libya, Somalia, Sudan, Syria and Yemen – with “bona fide” connections in the U.S. be exempted from the travel ban. That definition was interpreted to mean that travelers with specific, close family members in the U.S., including spouses, children, and siblings, could be let in. But people whose closest connections are grandparents, aunts and uncles could be barred. Students or travelers with business or professional ties from the affected countries also are exempt if they can show a relationship that’s formal and documented, and not based on an intent to evade the ban.

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She’s gotta go. That was just too crazy. A few points and graphs from Lance’s longer article.

Yes, Ms. Yellen…There Will Be Another Financial Crisis (Roberts)

That is a pretty bold statement to make considering that every one of her predecessors failed to predict the negative consequences of their actions. Will there will be another “Financial Crisis” in our lifetimes? Yes, it is virtually guaranteed. The previous “crisis” wasn’t about just “an asset gone bad,” but rather the systemic shock caused by a “freeze” in the credit markets when Lehman Brothers filed for bankruptcy. Counterparties evaporated, banks froze lending and the credit market ceased to function. Credit, not the stock market, is the “lifeblood” of the economy. Of course, it is all good now because the Fed says so with Ms. Yellen placing a great amount of faith in the Fed’s own carefully constructed, and recently released results, of “bank stress tests.” Interestingly, EVERY bank passed with flying colors. In other words, the Millennial generation has now passed the baton of “Everybody Gets A Trophy” to the banking sector. [..] Here is why Janet Yellen is wrong in believing another “Financial Crisis” can’t occur:

Catalyst 1: Delinquency & Defaults We are already seeing the early warning signs with delinquency rates rising and commercial lending on the decline in both consumer and commercial and industrial loans. [..] Of course, this also includes the credit problems of the collapse in Commercial Real Estate which is grossly leveraged at a time when prices have begun to stagnate with an oversupply of inventory sitting on the ground.

Catalyst 2: Leverage & Robots It isn’t just bank loans which will catalyze the coming financial crisis. It is also, be the massive surge in debt and leverage over the last eight years including student loans, credit cards, corporate debt and margin loans. As I discussed recently in the “Illusion Of Liquidity:” “The illusion of liquidity has a dangerous side effect. The process of the previous two debt-deleveraging cycles led to rather sharp market reversions as margin calls, and the subsequent unwinding of margin debt fueled a liquidation cycle in financial assets. The resultant loss of the ‘wealth effect’ weighed on consumption pushing the economy into recession which then impacted corporate and household debt leading to defaults, write-offs, and bankruptcies.”

Catalyst 3: Pensions Lastly, and a point clearly missed by Ms. Yellen in her quest to dismiss financial crisis risks, is the $3 Trillion “Pension Crisis” that is just one sharp downturn away from imploding. The cresting of the “baby boom” generation now puts these massively underfunded pensions at risk of a “run on assets” during the next downturn which could send the entire system into chaos. Of course, this problem can be directly traced to the malfeasance of pension fund managers, and pension boards, which used excessively high return rates to lower costs of contributions.

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Lenders need new loans something desperate.

Car Deals: Must Be Subprime, Must Finance Through Chrysler Capital (Mish)

Reader Brian emailed an ad for huge discounts on cars. The fine print is rather amusing: Must be subprime and must finance through Chrysler Capital. Frequently, when you see an ad “only x available at this price”, there are really none available at that price. They all went to friends of the dealer. I called about the 2017 Patriot and there were still some left but they were “going fast”. The ad reads “Primary customer must have a FICO score below 620 and must finance through Chrysler Capital” I asked what happens if my credit score was above 620. As expected, I could not get that price. For someone with a credit score of 800 the price jumps to $13,485.

I asked what happens if I pay all cash. That price is $13,995. I asked about prepayment penalties and California does not allow them. Still, the MSRP is $21,760 and you can get one for $13,995. That is a discount of 35.7% off the MSRP. I do not know what this model typically sells for, but that seems like a hefty discount. A subprime buyer can pay $11,995. That is a discount of 44.9% off MSRP. Since there are no prepayment penalties, one could immediately pay it off in theory. In practice, someone with a credit score below 620 is extremely unlikely to be in a position to pay the loan off immediately.

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Don’t forget: when loans are paid back, money disappears from the system.

Signs Of An Auto Bubble: Dealer Offers “Low Credit Score Discount” (ZH)

If you’re still on the fence about whether the auto market in this country is anything but a massive bubble being propped up by extremely loose credit underwriting standards, then we think we’ve just found some definitive evidence for you. As Jalopnik noted earlier today, at first glance the following advertisement for a $55,000 truck from a dealership in Texas looks fairly ‘normal’…an extremely high starting MSRP at the top followed by a series of incentive offers that make the vehicle look “affordable.” But, take a closer look and we think you just might find something rather disturbing…that’s right, a $1,500 discount offered only to people with “Low Credit Scores.”

Ordinarily, of course, lender/dealer financing incentives like these would be offered to folks with good credit, because…well, that’s at least somewhat logical, but it seems as though this particular dealer has already sold a $55,000 truck to everyone with good credit and is looking to ‘creatively’ broaden it’s addressable market. Meanwhile, looking at the fine print, it seems as though this incentive is particularly targeted at subprime borrowers with credit scores below 620. “April 2017 Pricing on all new vehicles may include up to $1500 in finance rebates that have certain credit requirements to be able to claim this rebate. The finance office is Credit Score based and you must be below 620 to qualify. If you are over a 620 you must add up to $1500 to the price. Varies by make and model. Not all units are eligible for this rebate. Call Dealer for Details.”

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Rollercoaster territory. Wonder why. +4.0% in April, -3.2% in May, expected + 2.8% in June and -0.1% in July.

Japan May Industrial Output Slumps At Steepest Pace In Over 6 Years (R.)

Japan’s industrial output fell 3.3% in May from the previous month due to lower production of cars and construction equipment, preliminary government data showed on Friday, in a sign of a temporary lull in manufacturing activity. The result compared with the median estimate of a 3.2% decline in a Reuters poll of economists. It followed a 4.0% increase in April, which was the fastest increase in almost six years, the data from the Ministry of Economy, Trade and Industry showed. Manufacturers surveyed by the ministry expect output to rise 2.8% in June and fall 0.1% in July.

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I’m sort of sorry I feel inclined to delve into US politics, but enough is enough. “..maybe more essential is a game plan for reporting this and going to Moscow and finding the bookkeeper.”

Bob Woodward Chides NYT, Mainstream Media: ‘Fair Mindedness is Essential’ (DC)

Famed investigative journalist Bob Woodward criticized the media’s open bias toward President Trump on Tuesday in remarks following a screening of “All The President’s Men” in Washington, D.C. Woodward, the reporter who broke the Nixon Watergate scandal the media now loves to compare to the Trump administration, said it’s crucial the press retain the trust of the public, and execute a deep “fair-mindedness” when reporting. He pointed to a list of Trump’s “lies” compiled by The New York Times in which some of the president’s are misjudged as an example of overt bias, after he was asked about the media’s treatment of Trump in a Q&A session at Landmark E Street Cinema. “[Number three on the list] was that Trump said he was on the cover of Time magazine 14 or 15 times when it was in fact 11 times,” Woodward said. “… That’s not a lie.”

He likened Trump’s statement instead to someone getting pulled over for speeding and telling the police officer that they were driving the speed limit. “Tone matters, and headlines matter, and you want people to [trust you],” he said. “[It] really betrays the anti-Trump media bias,” Woodward added, regarding the media’s coverage of the investigation into Russian meddling in the election. “I think a kind of brief, deeply fair-mindedness is essential, but as essential or maybe more essential is a game plan for reporting this and going to Moscow and finding the bookkeeper.” The bookkeeper was a reference to a key source for Woodward and Carl Bernstein in their Watergate coverage. Woodward has been a consistent voice for journalism in recent months, calling the Buzzfeed dossier “a garbage document” and saying that the Comey investigation was “not yet Watergate,” contradicting frequent mainstream claims.

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Great history lesson on previous US scandals.

Russia-gate Is A Scandal In Search Of A Specific Crime (Robert Parry)

So how do Watergate and Iran-Contra compare and contrast with Russia-gate? One key difference is that in Watergate in 1972-73 and Iran-Contra in 1985-86, you had clear-cut crimes (even if you don’t want to believe the two “prequels” from 1968 and 1980, respectively). In Watergate, five burglars were caught inside the DNC offices on June 17, 1972, as they sought to plant more bugs on Democratic phones. (An earlier break-in in May had installed two bugs, but one didn’t work.) Nixon then proceeded to mount a cover-up of his 1972 campaign’s role in funding the break-in and other abuses of power. In Iran-Contra, Reagan secretly authorized weapons sales to Iran, which was then designated a terrorist state, without informing Congress, a violation of the Arms Export Control Act. He also kept Congress in the dark about his belated signing of a related intelligence “finding.”

And the creation of slush funds to finance the Nicaraguan Contras represented an evasion of the U.S. Constitution. There was also the attendant Iran-Contra cover-up mounted both by the Reagan White House and later the George H.W. Bush White House, which culminated in Bush’s Christmas Eve 1992 pardons of six Iran-Contra defendants as special prosecutor Lawrence Walsh was zeroing in on possible indictment of Bush for withholding evidence. By contrast, Russia-gate has been a “scandal” in search of a specific crime. President Barack Obama’s intelligence chieftains have alleged – without presenting any clear evidence – that the Russian government hacked into the emails of the Democratic National Committee and of Hillary Clinton’s campaign chairman John Podesta and released those emails via WikiLeaks and other Internet sites. (The Russians and WikiLeaks have both denied the accusations.)

The DNC emails revealed that senior Democrats did not maintain their required independence regarding the primaries by seeking to hurt Sen. Bernie Sanders and help Clinton. The Podesta emails pulled back the curtain on Clinton’s paid speeches to Wall Street banks and on pay-to-play features of the Clinton Foundation. Hacking into personal computers is a crime, but the U.S. government has yet to bring any formal charges against specific individuals supposedly responsible for the hacking of the Democratic emails. There also has been no evidence that Donald Trump’s campaign colluded with Russians in the hacking. Lacking any precise evidence of this cyber-crime or of a conspiracy between Russia and the Trump campaign, Obama’s Justice Department holdovers and now special prosecutor Robert Mueller have sought to build “process crimes,” around false statements to investigators and possible obstruction of justice.

In the case of retired Lt. Gen. Michael Flynn, Trump’s first national security adviser, acting Attorney General Sally Yates used the archaic Logan Act of 1799 to create a predicate for the FBI to interrogate Flynn about a Dec. 29, 2016 conversation with Russian Ambassador Sergey Kislyak, i.e., after Trump’s election but before the Inauguration. The Logan Act, which has never resulted in a prosecution in 218 years, was enacted during the period of the Alien and Sedition Acts to bar private citizens from negotiating on their own with foreign governments. It was never intended to apply to a national security adviser of an elected President, albeit before he was sworn in. But it became the predicate for the FBI interrogation — and the FBI agents were armed with a transcript of the intercepted Kislyak-Flynn phone call so they could catch Flynn on any gaps in his recollection, which might have been made even hazier because he was on vacation in the Dominican Republic when Kislyak called.

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“The “17 intelligence agencies” lie had been completely, thoroughly debunked for weeks..”

New York Times Forced To Retract Longstanding Lie About Russian Hacking (M.)

Seventeen intelligence agencies: if you’ve been following the maniacal #TrumpRussia coverage to any extent, you’ve heard this phrase used uncritically, time and again, regardless of your ideological loyalties. Pundits, papers and rank-and-file establishment loyalists have been unquestioningly regurgitating the nonsensical line that 17 intelligence agencies confirmed Russian interference in the US elections ever since Hillary Clinton made that baseless assertion in a debate back in October. The innate absurdity of the claim was immediately attacked by WikiLeaks and anti-establishment outlets who pointed out that this would necessarily need to involve full investigations from agencies like the Coast Guard, the DEA and the Energy Department in order to be true.

Nevertheless, many high-profile pro-establishment outlets like Politifact and USA Today found Clinton’s claims to be 100% true on the grounds that James Clapper, then-Director of National Intelligence and notorious Russophobic racist, “speaks on behalf of” all 17 intelligence agencies. To this day Politifact stands by its false claim on the basis of that same spurious assertion. It turns out, however, that in addition to Clapper’s office there were only three intelligence agencies involved in that assessment, not 17, and that the conclusions were drawn not by the actual agencies in full, but by a mere two dozen loyalists from those agencies hand-selected by Russophobic eugenicist Clapper himself. The great Robert Parry notes in his Consortium News article about this point, “as any intelligence expert will tell you, if you ‘hand-pick’ the analysts, you are really hand-picking the conclusion. For instance, if the analysts were known to be hard-liners on Russia or supporters of Hillary Clinton, they could be expected to deliver the one-sided report that they did.”

As reported by Parry, we have known about these facts since they emerged from Clapper’s racist face hole on May 8, and they were confirmed by former CIA Director John Brennan on May 23. And yet at a California technology conference on May 31, Hillary Clinton repeated the same lie she’s been spouting since October: “Seventeen agencies, all in agreement, which I know from my experience as a Senator and Secretary of State, is hard to get. They concluded with high confidence that the Russians ran an extensive information war campaign against my campaign, to influence voters in the election. They did it through paid advertising we think; they did it through false news sites; they did it through these thousand agents; they did it through machine learning, which you know, kept spewing out this stuff over and over again. The algorithms that they developed. So that was the conclusion.”

The “17 intelligence agencies” lie had been completely, thoroughly debunked for weeks, and yet not a soul called Clinton out on her brazen lie within the establishment press. Indeed, establishment pundits like Megyn Kelly continued to repeat the lie, and have continued to do so throughout the month of June. All this changed when CNN was sent reeling by a 1–2–3-punch combination ensuing from its horrendously propagandistic Russia coverage, which has seen three of its journalists lose their jobs and sent the network into international disgrace. All of a sudden we are seeing establishment outlets getting a lot more conscientious about what they choose to publish about the Russian Federation, and today we saw none other than the New York Times posting the very first retraction of this long-debunked lie that we have seen in establishment media.

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Even the New York TImes has issued a correction repudiating the “17 intelligence agencies” meme. There’s a James Clapper testimony video in which he says it was only CIA, NSA and FBI, “not all 17”. But Podesta just keeps using it. One creepy individual, if you ask me.

Maria Bartiromo Slams John Podesta Over His Ties To Russia (PFW)

Even after James O’Keefe and Project Veritas essentially blew the lid right off the fake ‘Russia hacked the election’ narrative, Hillary Clinton’s former campaign chairman, John Podesta, doubled down on the debunked narrative when challenged by Fox News’ Maria Bartiromo on his ties to a Kremlin-backed company. Podesta met behind closed doors on Tuesday with the members of the House Intelligence Committee as part of the panel’s investigation into supposed Russian efforts to meddle in the presidential election. When asked what he could tell the Thursday Fox audience about the House Intel meeting, Podesta explained that the panel wanted to know “what had happened to me and the effect on the campaign … the effect of the Russian interference in our democratic process.”

“They’re probing what actually happened, whether if there was collusion and what we’re going to do about,” Podesta told Bartiromo. “They asked me not to get into specific questions that they asked me and my specific answers but in general terms, they’re taking a bipartisan look at this stage.” Fox Host Maria Bartiromo then chimes in with a question that digs sharply into the skin of Podesta. “Don’t you find it odd that there’s been so much attention on the Trump Campaign and the Trump associates and potential collusion with the Russians when in fact it’s really the Democrats who have deeper and stronger ties to Russia,” Bartiromo said. “I mean John I have to ask your own situation..”

Bartiromo then goes on to break down how Podesta joined the board of the board of a small energy company in 2011 which later received $35 million from a Kremlin-funded entity. According to Bartiromo, Podesta also owns 75,000 shares in a Russian company and failed to disclose this to the Obama administration. And this is where things got heated…

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Accusing the dead. Low.

Comey Friend Unveils “Smoking Gun” Nothingburger (ZH)

For about a week now, Benjamin Wittes, the Brookings Institution senior fellow and noted ally of former FBI Director James Comey, has been taunting the Trump administration with tweets suggesting that another ‘bombshell’ story, presumably related to the Russia investigation, was in the works and set to drop any minute. Of course, people took notice of the warnings because Wittes posted similar tweets just before the New York Times published their now infamous story on Comey’s memos So what was the “bombshell” story? It seems to have come in the form of a rather bizarre, and thoroughly difficult to follow, Wall Street Journal article entitled “GOP Operative Sought Clinton Emails From Hackers, Implied a Connection to Flynn.”

To summarize the ‘bombshell’, the story is about a long-time Republican opposition researcher, 81-year-old Peter W. Smith, who apparently set out on a mission to find Hillary’s 30,000 emails which the FBI confirmed had gone missing. In his efforts to find those emails, he scoured hacking chat rooms looking for clues and/or hackers that might be able to help him. The WSJ alleges that Smith may or may not have been working with Michael Flynn but, in the end, they found absolutely nothing. To summarize even further, a guy tried to find Hillary’s missing emails and failed…HALT THE PRESSES! Of course, the goal of the story is to paint some sinister plot that involved Smith and Michael Flynn enlisting the help of some Russians to hack the 2016 election…thus ‘proving’ the collusion angle.

Unfortunately, the story seems to prove the exact opposite which is, if Flynn was really running around on some wild goose chase looking for Hillary’s missing 30,000 emails by chatting up hackers on a message board then we have to assume that means he wasn’t in any way connected to the original hack which ended up on WikiLeaks. [..] Of course, it’s only deeper in the story that the WSJ admits they have no idea if Flynn was even involved with Smith…but no one reads an entire article so it’s fairly irrelevant. “What role, if any, Mr. Flynn may have played in Mr. Smith’s project is unclear. In an interview with The Wall Street Journal, Mr. Smith said he knew Mr. Flynn, but he never stated that Mr. Flynn was involved.” [..] Meanwhile, the WSJ confirms that Smith died last month at the age of 81. So there you have it…all the makings of another salacious, ‘bombshell’ story with multiple references to Russians, hackers, collusion, shady dealings with Michael Flynn, etc, yet still no evidence of pretty much anything.

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“95% of employees at the State Department, Pentagon, CIA, NSA, and the rest of the alphabet soup agencies do not come and go with elections.”

Peace is Popular (Ron Paul)

Peace is popular. That was Ron Paul’s message to our audience in Texas earlier this spring, and it has been his consistent message since first running for Congress in the 1970s. So why do seemingly endless wars remain such a stubborn feature of the American presidency, with the shameful complicity of Congress? Americans who supported Trump did so overwhelmingly because he promised a populist “America First” approach to both domestic and foreign policy. Every poll shows that the domestic economy, culture wars, and immigration were the animating issues of the election – not our ongoing military misadventures in the Middle East. Nobody voted for an escalation of US involvement in Syria, nobody voted to ramp up the never-ending war in Afghanistan by dispatching the Mother of All Bombs, and nobody voted to resurrect an absurd decades-old conflict with North Korea.

Yet President Trump has done all of these things, largely abandoning the noninterventionist promises of Candidate Trump. Perversely, ordering a missile attack on a Syrian air base was the first and only act that earned him praise from his enemies at organs like the New York Times and Washington Post. “He’s finally acting presidential” they gushed. To understand Trump’s departures from his campaign rhetoric is to understand the very nature of politics and the bureaucratic state. Nobody goes to Washington to “run” the government. Washington runs them. Trump, ostensibly the biggest outsider to win the presidency in modern American history, cannot overcome the entrenched foreign policy establishment any more than he can overcome gravity. 95% of employees at the State Department, Pentagon, CIA, NSA, and the rest of the alphabet soup agencies do not come and go with elections.

They, along with the vast apparatus of defense contractors, are not going anywhere. Permanent war and interventionism requires permanent funding. And like all tax-funded enterprises, war is inherently anti-capitalist. It diverts resources, swells state bureaucracies, and hides the horrific human and economic costs in a cloak of patriotism and platitudes about America’s role in the world. When we hear Vice President Pence talk about “rebuilding the arsenal of democracy,” he really means it. Ludwig von Mises saw German war socialism up close as a lieutenant in the Austro-Hungarian army during the Great War. Under Wehrwirtschaftslehre, the German doctrine of war economics, the normal calculations of capitalist businessmen go out the window. Costs, quality, demand, and profit become wholly secondary to the overriding goal of preparing the nation for war.

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After 2 weeks. Forecast for Athens today: 43ºC (110ºF). Ditto for the weekend.

Greece Garbage Cleanup Begins As Workers Halt Strike Action (K.)

Municipal garbage collectors Thursday started the long and unpleasant task of picking up thousands of tons of trash that has been rotting under the sun for the past two weeks after unionists decided to call off strike action demanding job security. As fears of a threat to public health spiked Thursday amid an intensifying heat wave, the union representing protesting workers, POE-OTA, announced that they would be ending their action. The decision came on the day of a 24-hour strike by POE-OTA workers who pressed on with the walkout despite having wrested concessions from the government earlier in the week. Local authorities in Athens, Thessaloniki and other cities are now expected to rehire thousands of sanitation workers whose short-term contracts have expired.

According to sources, the Interior Ministry is on Friday to issue a circular to local authorities across the country, calling for the implementation of an amendment approved in Parliament on Wednesday which foresees the extension of workers’ short-term contracts. It remains unclear how POE-OTA will react, however, if municipalities end up hiring fewer than the 6,150 people currently employed on short-term contracts in sanitation. Meanwhile contract workers have to clean up the mess in the streets. According to Giorgos Broulias, deputy mayor of Athens, it will take at least four days to pick up all the trash. “It will then take even more days for parts of the capital to be washed down with cleansing agents and disinfectants,” he told Kathimerini.

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I even saw a number of 20,000 arrivals so far this week.

Italy Threatens To Turn Away Foreign NGO Ships With Rescued Migrants (dpa)

Italy is poised to instruct its ports to turn away foreign ships carrying rescued migrants unless other EU countries agree to greater burden-sharing on refugee arrivals, a senior government source said Wednesday. The threat would apply to ships run by NGOs but not to foreign state units operating under EU border agency Frontex and EU naval mission Eunavfor Med Sophia, the source told dpa. The same source said Italy’s ambassador to the EU, Maurizio Massari, was sent to meet EU Migration Commissioner Dimitris Avramopoulos to deliver the message that “Italy is dealing with a serious situation and Europe cannot turn the other way.” “The ambassador highlighted that Italy’s efforts have been enormous and well beyond international obligations [and] under the current circumstances it is difficult for our authorities to allow further disembarkations of migrants,” an Italian diplomat added.

It was not immediately clear whether the ban against foreign NGO ships could be enacted legally. It could affect several German vessels operated by German sea rescue charities, such as Jugend Rettet and Sea Watch. “We are a bit worried by this idea,” said Michele Trainiti, sea rescue coordinator for the Doctors Without Borders (MSF). The medical charity operates two boats in the Mediterranean, including one with a non-Italian flag. He said diverting vessels to France, for example, “would require many more days of navigation with people in very precarious situations,” which current MSF rescue vessels “are not equipped for.”

Rome’s hard-line message filtered out following the record rescue of nearly 10,000 migrants since the weekend, and in the wake of Prime Minister Paolo Gentiloni’s failure at last week’s EU summit to convince partners to take in more asylum seekers. It also came in the wake of a Sunday local election rout for the ruling centre-left Democratic Party, which several commentators blamed on public discontent with rising immigration and government proposals to grant citizenship to children of foreign residents.

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Europe is morally and politically gapingly empty.

Closing Italian Ports ‘A Cry For Help’, Say Weary Crew Of Rescue Boat (G.)

As 1,032 people plucked from the Mediterranean prepared to disembark the MS Aquarius onto southern Italian soil on Thursday, bringing refugee and migrant arrivals to more than 12,000 this week, those who had rescued them said they understood why Rome was threatening to close its ports to such vessels. “Officially, we haven’t heard anything from the Italian government … but if this is indeed the case, if anything it sounds more like a cry for help from the Italian government towards the EU,” said Marcella Kraay, a Dutch coordinator with Médecins Sans Frontières, as the ship arrived at Porto di Corigliano in Calabria. “And that goes along with what we’ve always asked for, which is for the EU to organise dedicated search and rescue in the Mediterranean. Until that happens we are forced to be out there because people are in danger, they’re going to drown if we’re not there.”

The last week has seen a surge of refugees arriving on humanitarian rescue ships. The Aquarius, which has been been undertaking risky year-round search and rescue missions in waters north of Libya since 2015, set a new record on Tuesday as it recovered more than 1,000 people in just one day. More than 5,000 people arrived in Italy on Monday alone, according to the International Office for Migration. The Italian government, which came under pressure from a strong challenge from the centre-right in local elections this week, has responded by giving its EU ambassador a mandate to raise the issue with the European commission – including the possibility it could close its ports to the ships. A commission spokeswoman said it supported Italy’s “call for a change in the situation” and the bloc’s migration ministers would tackle the matter next week.

“Over the last few months we’ve heard so many things said that were going to happen, or that should happen, or politicians basically gearing up for elections, that it doesn’t make me feel all that much right now,” said Kraay on board the Aquarius, which is chartered by the German-French charity SOS Méditerranée. “Let’s cross that bridge when we get there … until now we just need to stay focussed on doing our job.”

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