Feb 242017
 
 February 24, 2017  Posted by at 10:41 am Finance Tagged with: , , , , , , , , ,  2 Responses »
Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInShare on TumblrFlattr the authorDigg thisShare on RedditPin on PinterestShare on StumbleUponEmail this to someone


Marion Post Wolcott Works Progress Administration worker’s children, South Charleston, West Virginia 1938

 


France Scrapping The Euro Could Go Beyond A ‘Lehman Moment’ (CNBC)
Le Pen Says French Foreign Policy Must Be Decided in Paris (BBG)
Obamacare Just Hit Its Highest Popularity Ever (BI)
Former IMF Chief, Dozens of Former Bank Execs Sentenced to Jail in Spain (DQ)
Analyzing the Emerging World Order: The Future of Globalism (GR)
Increasingly Unhinged Russia Rhetoric From A Long-Standing US Playbook (GG)
What Does Russia Produce? (Humor)
Career Politicians Aren’t Qualified To Run The Country (Hewson)
Turkish Commandos Ask For Asylum In Greece (K.)
Synthetic Clothing And Tires Could Be Polluting The Oceans In A Big Way (CNBC)
Arctic ‘Doomsday’ Seed Vault Receives 50,000 New Deposits (AP)
Plan To Save Great Barrier Reef Set Back Decades (AFP)

 

 

Fear mongering goes into overdrive.

France Scrapping The Euro Could Go Beyond A ‘Lehman Moment’ (CNBC)

Past performance is no guide to future returns, as investors are so often told, but the French electorate runs the risk of creating a crisis worse than the fall of Lehman Brothers if it follows the U.K. in instigating a referendum on EU membership, according to analysts at Deutsche Bank. As the French presidential race heats up ahead of the first round of voting in April, the German bank has warned of the pitfalls of using the U.K.’s Brexit vote as a model for a potential “Frexit”, as touted by nationalist candidate Marine Le Pen. Le Pen, who is currently leading the race according to the latest BVA-Salesforce opinion poll, has vowed to hold a French referendum on EU membership if she is successful in winning France’s two-round leadership race.

Pointing to the U.K., which has – so far – felt a relatively benign impact from its Brexit vote, Le Pen has relied on it as a basis for rallying support during her campaigning, saying: “They told us that Brexit would be a catastrophe, that the stock markets would crash … The reality is that none of that happened.” However, Deutsche Bank has warned of the inconsistencies of likening the two votes. An EU referendum in France, one of the founding members of the economic bloc, runs the risk of undermining the euro, the currency shared by 19 of the EU’s 28 member states. “Make no mistake, there is the world of difference between tearing up bilateral and multilateral trade agreements, and, unwinding a monetary union as far reaching in scope as the EMU (economic and monetary union) project,” Deutsche Bank said in a note Tuesday.

“It is the difference between a benign global risk event and something that has the potential to go beyond a ‘Lehman’s moment’.” The frictionless interaction enjoyed by countries within the European Monetary Union would turn into it a “nightmare”, says Deutsche Bank, as a lack of a currency hedge would make all EMU members vulnerable to currency weakness. The bank estimates that assets shared between the economic bloc plus liabilities totaled €46 trillion at the end of the third quarter 2016. This it describes as an “upper bound estimate of EMU exposure that would have no hedge, and be exposed to currency risk in the event of an EMU break-up.”

Read more …

And many people all over Europe will say she’s damn right.

Le Pen Says French Foreign Policy Must Be Decided in Paris (BBG)

French foreign policy should be decided solely in Paris, French presidential candidate Marine Le Pen said, calling for a reversal of her country’s quest over past decades for tighter ties with European Union allies. Laying out her foreign-policy vision in a speech in Paris, Le Pen spoke of a world based on nation states that pursue their own interest and preserve their own cultures without interference. “To assure the freedom of the French, there is no price too high too pay,” Le Pen said. “The foreign policy of France will be decided in Paris, and no alliance, no ally, can speak in her place.” Her first move as president would be to renegotiate EU treaties as an initial step toward creating a “Europe of Nations,” she said. She saluted Britain’s vote to leave the EU, and said she’d withdraw from NATO’s military command.

“I rejoice in Europeans claiming back their freedom against the attempts to create an artificial super-state,” she said. “The European Union is not the solution, it’s the problem.” Polls show that Le Pen would win the most votes in the April 23 first round of the elections, but would lose the May 7 run-off against whoever she faces. On the U.S., she said she was hopeful President Donald Trump would reverse what she described as interventionist policies of President Barack Obama. She listed support for rebels in Libya and Syria as “mistakes” that have undermined world peace. “The U.S. is an ally but sometimes an adversary,” she said, adding that she was encouraged by Trump’s early days in office.

She said Russia has an “essential balancing role to keep world peace” and “has been badly treated by the European Union.” In Africa, French policy would be one of “non-intervention, but not indifference.” Le Pen said communism and liberal capitalism have both been delusions, and that “people are trying to escape, and find in the nation the best way to protect themselves. Each country should be free to follow its interests, choose its allies, preserve its culture, and France supports that right for all nations.”

Read more …

Hornets nest.

Obamacare Just Hit Its Highest Popularity Ever (BI)

Americans are learning to love the Affordable Care Act, better known as Obamacare. As the law faces possible repeal and replacement by Republicans, a new poll from the Pew Research Center shows that the ACA’s popularity is soaring and has hit its highest point since it was passed. 54% of respondents in Pew’s survey said they approve of the law, with just 43% disapproving. This is better than the 48% approve, 47% disapprove margin from December 2016. Additionally, of the 43% against the law, only 17% of people the total surveyed want Republicans to repeal the way entirely while 25% want the law modified instead, according to Pew.

Every age group, ethnic group, and education level saw increased support for Obamacare between Pew’s current poll and one conducted in October 2016. The result also matches up with other recent polls from a variety of outlets that show President Barack Obama’s signature health law becoming ever-more popular with Americans. House Speaker Paul Ryan said that the GOP plans to introduce a repeal and replace bill for the ACA soon after the week-long President’s Day break. Dissent among Republicans and recent pushback from constituents at town halls, however, has indicated that a repeal may be less than smooth than originally anticipated. Even former GOP House Speaker John Boehner said Thursday that repeal is “not going to happen.”

Read more …

A 6-year sentence but no hard time?

Former IMF Chief, Dozens of Former Bank Execs Sentenced to Jail in Spain (DQ)

The unimaginable just happened in Spain: two former bank CEOs, Miguel Blesa (CEO of Caja Madrid) and Rodrigo Rato (CEO of Bankia) were just awarded prison sentences of six years and four-and-a-half years, respectively, for misappropriation of company funds. Rato was also Managing Director of the IMF from 2003 to 2007. He was succeeded by another luminary, Dominique Strauss Kahn. Now, the question on everyone’s mind is will Blesa and Rato actually serve the sentence (more on that later). Dozens more former Caja Madrid senior executives, most of whom are closely connected to either, or both, of the country’s two main political parties and/or unions also face three to six years in prison. They were found guilty by Spain’s National High Court of misusing company credit cards.

Those cards drained money directly from the scarce funds of Caja Madrid, which at the height of Spain’s banking crisis was merged with six other failed savings banks into Bankia, which shortly thereafter collapsed and ended up receiving the biggest bail out in Spanish history, costing taxpayers over €20 billion, to date. Between 2003 and 2012 Caja Madrid (and its later incarnation, Bankia) paid out over €15 million to its senior management and executive directors through its “tarjeta negra” (black card) scheme. According to accounts released by Spain’s bad bank, FROB, much of that money went on restaurants, cash withdrawals, travel and holidays, and the like. The amounts – which did not show up on any bank documents, job contracts, or tax returns – may be small, given the magnitude of the misdeeds that led to the Spanish bank fiasco, but it’s the principle that counts.

Only 4 out of 90 Caja Madrid senior managers, executives, and board members had the basic decency to turn down the offer of undeclared expenses. For the rest, it was an offer they could not refuse. In his last few months at Caja Madrid – just before the whole edifice came crumbling down – Blesa went on a mad spending binge. In one month alone he made purchases on his black card worth €19,000 – more than many Spaniards’ annual salary. This is a man who pocketed over €20 million in salaries and bonuses while at the helm of the bank that he helped destroy. On his departure in 2010, he was awarded a €2.5 million golden parachute. Yet even after his ouster he, like many other Caja Madrid executives, continued making liberal use of his tarjeta negra.

Read more …

“The unsolvable problem here is that this debt based system is really just an elaborate pyramid scheme predicated on ever increasing amounts of debt in a world where sources of real wealth are finite.”

Analyzing the Emerging World Order: The Future of Globalism (GR)

We live in a world subdivided by societies: nations and their respective subdivisions. As a matter of fact, there are over 200 nations recognized by the United Nations (UN). We are taught that a society must conform to a binary label such as “free” or “unfree”, “democratic” or “non-democratic” and so on. This is done principally for two reasons – to provide a tautological definition, also for easier control of the masses via manipulation. The current overarching narrative provides that we are divided between the “western” and “eastern” worlds. What does this really mean? We can distill this down to one principal root: economics. What do we mean by economics? We can say that in it’s purest form, it is simply the structured allocation of finite resources.

Today we are observing the transition from a so called unipolar world, one in which a single nation (or group of allied nations) dictates the terms of life for all global citizens, to a more balanced and natural multipolar world. The current dominating group, the “western” bloc of nations, is led by the United States along with numerous vassal states; this order has persisted since the end of the Second World War. This construct is held together using a combination of supranational organizations (UN,WTO,World Bank, IMF, et cetera), propaganda (mainstream media complex), armed might (MIC,NATO, private mercenary forces) and chiefly economics (central banks, corporations). The true “rulers” of this bloc are a cabal of very wealthy and powerful oligarchs that work in the background (shadow banking, dark pool finance, shadow governments, think tanks, NGO’s) to subvert the various sovereignties to their advantage.

These oligarchs are the principal owners of, not just the industries and corporations that front for them, but the governments that rule over the masses. Most importantly this cabal owns the means by which real wealth extraction is carried out: fiat currency, chiefly the “worlds reserve currency”- the United States dollar and it’s derivatives. These currencies are backed not by equitable assets; such as natural resources, precious metals or productive capacities; instead they are backed by the creation of debt. Debt that represents a claim on real assets that virtually all participants in global commerce must pay. How did this cabal come into power? This is a complex question that is subject to many possible answers and interpretations. Briefly, we know from historical fact that a global empire is a central part of this construct, today the United States empire holds that role (previously British, French so on…). This provides the controlling force behind such a cabal.

The privately owned quasi-governmental western central banks are at the heart of this operation. They form the crucial nexus between sovereign governments and the financial world in which they derive their revenue stream, and by extension, their power. The current seat of this construct (United States) was founded as a Constitutional Republic. Unfortunately, the United States Constitution is quite amorphous. Using many acts of legislative, executive and even judicial fiat, this cabal has been able to effectively take over the reigns of the nation. With that feat accomplished, near world domination was made possible. A complex web of regulations, laws, and rules; coupled with a financial system few fully comprehend has been put into place across the west. This became the mechanism by which this “new world order” has been enforced.

The unsolvable problem here is that this debt based system is really just an elaborate pyramid scheme predicated on ever increasing amounts of debt in a world where sources of real wealth are finite. At present, the growth rate and the total amount of debt issuance, is outpacing the extraction rate and amount of available reserves of resources on the planet.

Read more …

Glenn Greenwald has been vocal about the Putin hysteria.

Increasingly Unhinged Russia Rhetoric From A Long-Standing US Playbook (GG)

For aspiring journalists, historians, or politically engaged citizens, there are few more productive uses of one’s time than randomly reading through the newsletters of I.F. Stone, the intrepid and independent journalist of the Cold War era who became, in my view, the nation’s first “blogger” even though he died before the advent of the internet. Frustrated by big media’s oppressive corporatized environment and its pro-government propaganda model, and then ultimately blacklisted from mainstream media outlets for his objections to anti-Russia narratives, Stone created his own bi-monthly newsletter, sustained exclusively by subscriptions, and spent 18 years relentlessly debunking propaganda spewing from the U.S. government and its media partners. What makes Stone’s body of work so valuable is not its illumination of history but rather its illumination of the present.

What’s most striking about his newsletters is how little changes when it comes to U.S. government propaganda and militarism, and the role the U.S. media plays in sustaining it all. Indeed, reading through his reporting, one gets the impression that U.S. politics just endlessly replays the same debates, conflicts, and tactics. Much of Stone’s writings, particularly throughout the 1950s and into the 1960s, focused on the techniques for keeping Americans in a high state of fear over the Kremlin. One passage, from August 1954, particularly resonates; Stone explained why it’s impossible to stop McCarthyism at home when — for purposes of sustaining U.S. war and militarism — Kremlin leaders are constantly being depicted as gravely threatening and even omnipotent. Other than the change in Moscow’s ideology — a change many of today’s most toxic McCarthyites explicitly deny — Stone’s observations could be written with equal accuracy today.

[..] Few foreign villains have been vested with omnipotence and ubiquity like Vladimir Putin has been — at least ever since Democrats discovered (what they mistakenly believed was) his political utility as a bogeyman. There are very few negative developments in the world that do not end up at some point being pinned to the Russian leader, and very few critics of the Democratic Party who are not, at some point, cast as Putin loyalists or Kremlin spies. Putin — like al Qaeda terrorists and Soviet Communists before him — is everywhere. Russia is lurking behind all evils, most importantly — of course — Hillary Clinton’s defeat. And whoever questions any of that is revealing themselves to be a traitor, likely on Putin’s payroll.

As The Nation’s Katrina vanden Heuvel put it on Tuesday in the Washington Post: “In the targeting of Trump, too many liberals have joined in fanning a neo-McCarthyite furor, working to discredit those who seek to deescalate U.S.-Russian tensions, and dismissing anyone expressing doubts about the charges of hacking or collusion as a Putin apologist. … What we don’t need is a replay of Cold War hysteria that cuts off debate, slanders skeptics and undermines any effort to explore areas of agreement with Russia in our own national interest.” That precisely echoes what Stone observed 62 years ago: Claims of Russian infiltration and ubiquity are “the thesis no American dare any longer challenge without himself becoming suspect” (Stone was not just cast as a Kremlin loyalist during his life but smeared as a Stalinist agent after he died).

Read more …

Turns out, a lot.

What Does Russia Produce? (Humor)

This past September, in one of his regular interviews with the newspaper Parlamentní Listy, retired Czech Major General Hynek Blasko commented on the possibility of a conflict between Russia and NATO with a following anecdote: “I have seen a popular joke on the Internet about Obama and his generals in the Pentagon debating on the best timing to attack Russia. They couldn’t come to any agreement, so they decided to ask their allies. The French said: ” We do not know, but certainly not in the winter. This will end badly. ” The Germans responded: “We do not know, either, but definitely not in a summer. We have already tried.” Someone in Obama’s war room had a brilliant idea to ask China, on the basis that China is developing and always has new ideas.

The Chinese answered: “The best time for this is right now. Russia is building the Power of Siberia pipeline, the North Stream Pipeline, Vostochny Cosmodrome Spaceport, the MegaProject bridge to Crimea; also Russian is upgrading the Trans-Siberian railroad with a new railway bridge across Lena River and the Amur-Yakutsk Mainline. Russia is also building new sports facilities for the World Cup and athletics, and has in development over 150 production projects in the Arctic … Well, now they really need as many POWs as possible!” So, now, even NATO members’ generals have noticed something peculiar about Russia. According to the myth that is being peddled by Western media, Russia has an underdeveloped economy based on the exchange of raw mineral resources for glass beads… I mean Western produced hi-tech products. Any barber would tell you that even Asians can make iPhones, but Russians can’t.

Read more …

View from Australia that applies everywhere.

Career Politicians Aren’t Qualified To Run The Country (Hewson)

When I was leader of the opposition, concerned about the standing of our politicians and failing confidence in our political processes, John Howard used to chip me about the need to recognise politics as a “profession”, and politicians as “professionals”. Now, some 25 years on, the dissatisfaction with our career politicians and the political system is of paramount importance, and fundamental to the drift away from the major parties, whereby now almost one in three direct their votes elsewhere. Politics has become a daily “conflict game”, dominated by career politicians concentrated on winning points on the other side, rather than on developing and delivering good public policy, and good government.

Important issues have been left to drift, or in some cases have been compounded by short-term, populist responses, so that important problems remain unresolved, all having a negative impact on the wellbeing of the average voter, let alone the legacies being left to their children. Minor parties and independents are attracting support in protest, or in the now desperate hope that they will at least shake things up, perhaps even drive governments and oppositions to better economic and social outcomes. But they too are mostly opportunistic, and populist, and often “extreme”, knowing they will never be in a position to have to deliver. Moreover, without experience and the requisite skills, they too may soon be “absorbed” or “defeated” by the system. Unfortunately, the skill sets and experience required of a career politician essentially make them incompetent to govern effectively.

Their career path is often from university, community or union politics, through local government/party engagement, perhaps serving as a ministerial staffer, to pre-selection, then election, and so on. Politics has become the end in itself. Those that make it are mostly qualified just to play the “game”, but not to govern. Increasingly, fewer have ever had a “real job”, or a significant career, before entering politics, and even then that may not qualify them to be a competent minister. It is also not easy to come from outside, as both Trump and Turnbull are finding. Yet, many end up as ministers responsible for significant government portfolios, and large budgets, with little or no relevant experience or skills or commitment to that area, let alone in management. Clearly, if we were to advertise the ministerial posts to attract those with the necessary competence – with the abilities, commitments, knowledge, experience and skills to do the job well – very few indeed, if any, of the current lot would be appointed.

Read more …

These guys were allegedly directly involved the coup?! Hard to protect.

Turkish Commandos Ask For Asylum In Greece (K.)

Two Turkish servicemen believed to have been involved in the plot to assassinate Turkish President Recep Tayyip Erdogan during the July coup attempt in the neighboring country, are being held in custody in Alexandroupoli, it was revealed Thursday. The two men, former members of Turkey’s special forces, entered Greece illegally through the Evros border crossing a few days ago and turned themselves in to police authorities in Orestiada. Through a local lawyer, the two commandos applied for political asylum on February 20.They had eluded arrest for months until they entered Greece. The pair are believed to have told Greek investigators that they were indeed involved in a plot to assassinate Erdogan. So far, there has been no Turkish request for their extradition.

Meanwhile, Ankara has submitted a fresh extradition request for the eight Turkish servicemen who Ankara have accused of being involved in the coup attempt. The initial request for their extradition was rejected in January by Greece’s Supreme Court, which said that regardless of whether they were guilty or not, the servicemen would not receive a fair trial in Turkey. In the new request, Ankara provided reassurances that they would receive a fair trial. It also includes what Turkish authorities describe as new incriminating evidence. The request sent to the Greek Foreign Ministry further includes two additional charges, on top of the four included in the first extradition request. The Foreign Ministry has passed on the request to the Justice Ministry.

Read more …

The curse of carbon comes in many forms. But it’s free, so we can’t resist.

Synthetic Clothing And Tires Could Be Polluting The Oceans In A Big Way (CNBC)

A new report from the International Union for Conservation of Nature (IUCN) has found that as much as 31 percent of the estimated 9.5 million tonnes of plastic that enters the ocean annually could be from sources such as tires and synthetic clothing. These products can release “primary microplastics”, which are plastics that directly enter the environment as “small particulates”. According to the IUCN, which released the report on Wednesday, they come from a range of sources. These include synthetic textiles, which deposit them due to abrasion when washed, and tires, which release them as a result of erosion when driving.

The report identified seven “major sources” of primary microplastics: Tires, synthetic textiles, marine coatings, road markings, personal care products, plastic pellets and city dust. “Our daily activities, such as washing clothes and driving, significantly contribute to the pollution choking our oceans, with potentially disastrous effects on the rich diversity of life within them, and on human health,” Inger Andersen, director general of the IUCN, said in a statement on Wednesday. “These findings indicate that we must look far beyond waste management if we are to address ocean pollution in its entirety,” he added.

Read more …

Are they implying changing the seeds when they talk about reconstituting them, developing climate-resilient crops for generations?

Arctic ‘Doomsday’ Seed Vault Receives 50,000 New Deposits (AP)

Nearly 10 years after a “doomsday” seed vault opened on an Arctic island, some 50,000 new samples from seed collections around the world have been deposited in the world’s largest repository built to safeguard against wars or natural disasters wiping out global food crops. The Svalbard Global Seed Vault, a gene bank built underground on the isolated island in a permafrost zone some 1,000 kilometers (620 miles) from the North Pole, was opened in 2008 as a master backup to the world’s other seed banks, in case their deposits are lost. The latest specimens sent to the bank, located on the Svalbard archipelago between mainland Norway and the North Pole, included more than 15,000 reconstituted samples from an international research center that focuses on improving agriculture in dry zones.

They were the first to retrieve seeds from the vault in 2015 before returning new ones after multiplying and reconstituting them. The specimens consisted of seed samples for some of the world’s most vital food sources like potato, sorghum, rice, barley, chickpea, lentil and wheat. Speaking from Svalbard, Aly Abousabaa, the head of the International Center for Agricultural Research, said Thursday that borrowing and reconstituting the seeds before returning them had been a success and showed that it was possible to “find solutions to pressing regional and global challenges.” The agency borrowed the seeds three years ago because it could not access its gene bank of 141,000 specimens in the war-torn Syrian city of Aleppo, and so was unable to regenerate and distribute them to breeders and researchers.

“The reconstituted seeds will play a critical role in developing climate-resilient crops for generations,” Abousabaa said.The 50,000 samples deposited Wednesday were from seed collections in Benin, India, Pakistan, Lebanon, Morocco, Netherlands, the U.S., Mexico, Bosnia and Herzegovina, Belarus and Britain. It brought the total deposits in the snow-covered vault — with a capacity of 4.5 million — to 940,000.

Read more …

“Given the severity of the damage and the slow trajectory of recovery, the overarching vision of the 2050 Plan… is no longer attainable for at least the next two decades..”

Plan To Save Great Barrier Reef Set Back Decades (AFP)

Australia’s plan to rescue the beleaguered Great Barrier Reef has been set back at least two decades after the fragile ecosystem suffered its worst-ever bleaching last year, experts said Friday. The vast coral reef – which provides a tourism boon for Australia – is under pressure from agricultural run-off, the crown-of-thorns starfish, development and climate change. Last year swathes of coral succumbed to devastating bleaching, due to warming sea temperatures, and the reef’s caretakers have warned it faces a fresh onslaught in the coming months. Canberra updated the UN’s World Heritage committee on its “Reef 2050” rescue plan in December, insisting the site was “not dying” and laying out a strategy for incremental improvements to the site.

But an independent report commissioned by the committee concluded that the government had little chance of meeting its own targets in the coming years, adding that the “unprecedented” bleaching and coral die-off in 2016 was “a game changer”. “Given the severity of the damage and the slow trajectory of recovery, the overarching vision of the 2050 Plan… is no longer attainable for at least the next two decades,” the report said. Last year’s bleaching killed two-thirds of shallow-water corals in the north of the 2,300-kilometre (1,400-mile) long reef, although central and southern areas escaped with less damage. The government has pledged more than Aus$2.0 billion (US$1.5 billion) to protect the reef over the next decade, but researchers noted a lack of available funding, with many of the plan’s actions under-resourced.

Read more …

Feb 182017
 
 February 18, 2017  Posted by at 10:40 am Finance Tagged with: , , , , , , , , , ,  3 Responses »
Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInShare on TumblrFlattr the authorDigg thisShare on RedditPin on PinterestShare on StumbleUponEmail this to someone


Unknown California State Automobile Association signage 1925

 


“That War You Ordered….” (Jim Kunstler)
US ‘Unwavering’ In NATO Support – Pence (BBC)
European Union President Rejects Trump Call For More NATO Spending (CNBC)
Four NATO Nations Would Pick Russia to Defend Them If Threatened (BBG)
Who Really Rules The United States? (FreeB)
Australia Headed For ‘Economic Armageddon’ (News.com.au)
China Is Going Broke (Jim Rickards)
Brexit Was A Revolt Against Snobs Like Tony Blair (Spec.)
Small Businesses Face Being ‘Driven Out Of London’ (Ind.)
Norway Central Bank Chief Warns Of Sharp Drop In Wealth Fund (BBG)
Only Germans Love the Euro These Days (BBG)
How Do You Say Deja Vu In Greek? (R.)
Can Tax Increases Bring Inflation To Greece? (KTG)
Greek Labor Minister Says Pensioners Can Barely Make Ends Meet (K.)

 

 

Hard to find any news articles these days that are not severely biased. So let’s go with Jim.

“That War You Ordered….” (Jim Kunstler)

The Russia paranoia frenzy is serious business because it indicates that a state-of-war exists between the permanent bureaucracy of government (a.k.a. the Deep State) and the new Trump administration. There are features of the struggle that ought to be much more disturbing than the dubious alleged monkey business about Russia hacking the election and the hoo-hah around a single intercepted phone call between Michael Flynn and the Russian ambassador, made to open a line-of-communication between high-ranking officials, strictly routine business in any other administration. Most disturbing are signs that the so-called intelligence community (IC) has gone rogue in collusion with forces aligned around Democratic Party functionaries up to and including former president Obama and Hillary Clinton, along with CNN, The Times, The Wash-Po, NBC News and a few other mouthpieces of the defeated establishment.

Obama and Hillary remain conspicuously sequestered from this maelstrom, but they must be working their phones like nobody’s business. (Is the IC monitoring them, too, one wonders?) Until his Queeg-on-steroids news conference late yesterday, Trump laid pretty low after General Flynn was thrown under the bus, but he must be plotting counter-moves, with Bannon and Steven Miller straining at their leashes, slavering for blood. Will some employees over at the CIA and the — what? — sixteen other IC outposts that stud the government like shipworms in a rotting hulk — be called on the carpet of the oval office, and possibly handed pink slips? How do you drain that swamp in Langley, VA? Perhaps with subpoenas? Surely Jeff Sessions over at the Department of Justice has got to be weighing action against the IC leakers. That shit is against the law.

The next disturbing element of the situation is all the war-drum beating by the same cast of characters: the IC, the Democratic Party, and major media. Why in hell are we antagonizing Russia? In the last month of Obama’s term — and for the first time in many years — NATO moved a bunch of tanks close to Russia’s border with the Baltic states. Do you really think Russia wants to reoccupy these countries for the pleasure of subsidizing them and draining the Russian treasury? In those twilight days of Obama, government officials made wild and unspecific charges about “Russian aggression,” and vague assertions about Russian plans to dominate the global scene. ajor what-the-fuck there. There’s the ugly situation in Ukraine, of course, but that was engineered by Obama’s state department.

Do you know why Russia annexed Crimea after that? It couldn’t have been for more transparently rational reasons. And what exactly is our beef with Russia in Syria? That they’re trying to prop up the Assad government because the last thing the Middle East needs is another failed state with no government whatsoever? What’s our plan for Syria, anyway? Same as Somalia, Iraq, and Libya? These stories about Russia’s intentions seem insane on their face. It’s amazing that readers of The New York Times swallow them whole. It must say something about the deterioration of the coastal gene pool. The story-mongers have a purpose though: to promote a state of permanent hostility, neo-cold-war style, to justify the grotesquely overgrown operations of the IC.

Read more …

Hollow words.

US ‘Unwavering’ In NATO Support – Pence (BBC)

The US will be “unwavering” in its support for Nato, vice-president Mike Pence told European leaders at the Munich Security Conference. In the first major foreign policy address for the Trump administration, Mr Pence said the US would “stand with Europe today and every day”. But he told the gathered leaders that European countries were “failing to pay their fair share” on defence. That failure “erodes the foundation of our alliance”, he said. Apart from the US, only four other nations had met a commitment to spend 2% of GDP on defence, “The time has come to do more,” he said.

President Donald Trump warned before taking office that the US might not uphold its commitment to come to the defence of Nato allies who were not perceived to have contributed enough financially. Mr Pence went on to say that the US would “continue to hold Russia accountable, even as we search for new common ground, which as you know, President Trump believes can be found”. Mr Pence said Russia must honour the Minsk peace accords on Ukraine and de-escalate its military operations in the east of the country.

Read more …

Juncker makes sense for a change.

European Union President Rejects Trump Call For More NATO Spending (CNBC)

European Commission President Jean-Claude Juncker has said Europe should resist U.S. pressure to spend more spending on defense. U.S. President Donald Trump has criticized the NATO defense alliance, suggesting he could withdraw support if European countries did not raise defense spending to at least 2% of their economic output.In a speech on the sidelines of the Munich Security Conference Thursday, Juncker, who heads the EU’s executive arm, suggested some resistance to Trump’s threat was in order. “It has been the American message for many, many years. I am very much against letting ourselves be pushed into this,” he said. Juncker also said the EU’s other spending commitments made up for any shortfalls in military funding. “Modern politics cannot just be about raising defense spending,” he said.

“If you look at what Europe is doing in defense, plus development aid, plus humanitarian aid, the comparison with the United States looks rather different,” he said. Juncker added that European nations should bundle their defense spending better and spend the money more efficiently. At a NATO meeting Wednesday, the U.S. Defense Secretary James Mattis reinforced Trump’s message, warning treaty allies they must boost their defense spending or America could “moderate its commitment.” “Americans cannot care more for your children’s future security than you do. I owe it to you to give you clarity on the political reality in the United States and to state the fair demand from my country’s people in concrete terms,” he said in a speech to NATO allies in the Belgian city of Brussels on Wednesday.

Read more …

Originally filed by reporter (see URL) as: “Melania Trump’s Slovenia Would Pick Russian Over US Protection”. Say no more.

Four NATO Nations Would Pick Russia to Defend Them If Threatened (BBG)

Who you gonna call? For the citizens of four NATO countries asked which military power they’d want fighting on their side if attacked, the answer was simple – Russia. That was among the findings of a multi-nation Gallup poll published just ahead of Friday’s annual gathering of the transatlantic security community in Germany that appeared to map out shifts in the post-Cold War security alliances which have come under renewed strain and scrutiny since Donald Trump’s election to the U.S. presidency. By far the largest number of countries polled by WIN/Gallup International chose the U.S. for their go-to defense partner, suggesting that it remains the world’s only military power with truly global reach and alliances. At the same time, however, China and Russia picked each other, war-torn Ukraine and Iraq split down the middle, while those four members of the U.S.-led North Atlantic Treaty Organization – Bulgaria, Greece, Slovenia and Turkey – plumped for Russia.

As U.S. Secretary of Defense James Mattis tours Europe delivering a message of tough love to NATO allies – increase spending or see the U.S. “moderate’’ its support – the poll shows the world’s gradual political reorganization around different security poles, according to Kancho Stoychev, vice president of WIN/Gallup International. “It isn’t surprising that Russians and Chinese chose each other, but it is new,’’ said Stoychev. “It shows us something very important – that U.S. policy over the last 20 years has driven Russia into the arms of China, which is quite strange because Russia is fundamentally a part of Europe.’’ At the same time, some of the results in European NATO countries showed how their fundamental security choices were moving beyond the alliance, he said. Bulgaria and Greece, for example, see their biggest security threat coming from Turkey.

Read more …

Right wing. As I said, very hard to find anything unbiased. All heels are dug in deeply.

Who Really Rules The United States? (FreeB)

Donald Trump was elected president last November by winning 306 electoral votes. He pledged to “drain the swamp” in Washington, D.C., to overturn the system of politics that had left the nation’s capital and major financial and tech centers flourishing but large swaths of the country mired in stagnation and decay. “What truly matters,” he said in his Inaugural Address, “is not which party controls our government, but whether our government is controlled by the people.” Is it? By any historical and constitutional standard, “the people” elected Donald Trump and endorsed his program of nation-state populist reform. Yet over the last few weeks America has been in the throes of an unprecedented revolt. Not of the people against the government—that happened last year—but of the government against the people. What this says about the state of American democracy, and what it portends for the future, is incredibly disturbing.

There is, of course, the case of Michael Flynn. He made a lot of enemies inside the government during his career, suffice it to say. And when he exposed himself as vulnerable those enemies pounced. But consider the means: anonymous and possibly illegal leaks of private conversations. Yes, the conversation in question was with a foreign national. And no one doubts we spy on ambassadors. But we aren’t supposed to spy on Americans without probable cause. And we most certainly are not supposed to disclose the results of our spying in the pages of the Washington Post because it suits a partisan or personal agenda. Here was a case of current and former national security officials using their position, their sources, and their methods to crush a political enemy. And no one but supporters of the president seems to be disturbed.

Why? Because we are meant to believe that the mysterious, elusive, nefarious, and to date unproven connection between Donald Trump and the Kremlin is more important than the norms of intelligence and the decisions of the voters. But why should we believe that? And who elected these officials to make this judgment for us? Nor is Flynn the only example of nameless bureaucrats working to undermine and ultimately overturn the results of last year’s election. According to the New York Times, civil servants at the EPA are lobbying Congress to reject Donald Trump’s nominee to run the agency. Is it because Scott Pruitt lacks qualifications? No. Is it because he is ethically compromised? Sorry. The reason for the opposition is that Pruitt is a critic of the way the EPA was run during the presidency of Barack Obama. He has a policy difference with the men and women who are soon to be his employees. Up until, oh, this month, the normal course of action was for civil servants to follow the direction of the political appointees who serve as proxies for the elected president.

Read more …

Personal debt.

Australia Headed For ‘Economic Armageddon’ (News.com.au)

Australia is headed for an “economic Armageddon”, with record household debt, record foreign debt and a massive housing bubble creating a perfect storm that could “wipe out” millions of families if there is a global shock. That is the apocalyptic warning of a former government economic advisor, who says the government needs to cut tax incentives such as negative gearing and welfare handouts and the RBA needs to increase interest rates in order to avoid a “devastating depression”. Corporate governance specialist John Adams, who was an economics and policy advisor to Senator Arthur Sinodinos and management consultant to a big four accounting firm, believes he has found seven disturbing signs that the global economy is primed for a major fall. Worse still, Australia is particularly vulnerable because of significant structural imbalances, including record levels of household debt not seen since the lead up to the last great depression in the 1920s.

“Australians should be concerned over the state of both the Australian and global economy,” Mr Adams told news.com.au. “The data clearly demonstrates that there are significant structural economic imbalances in the Australian economy. Significant expansion of the broad money supply and record low interest rates by the Reserve Bank of Australia as well as generous tax incentives and welfare provisions by the Federal Government have led Australians to amass record levels of personal debt which have fuelled the creation of asset bubbles, particularly in housing. “Millions of Australians are not only doing it tough through significant cost of living and debt serving pressures, but are at significant risk of being financially wiped out if an unanticipated adverse international economic shock were to hit Australia such as a new global financial crisis.”

Read more …

End of the year?

China Is Going Broke (Jim Rickards)

[..] of the 2.9 trillion, about one trillion of that is not liquid, meaning it’s wealth of some kind, it represents investment, but China wanted to improve their returns actually on their investments, so they invested in hedge funds, they invested in private equity funds, they made direct investments in gold mines in Zambia and so forth, so about a trillion of that is, it’s wealth, but it’s not liquid. It’s not money that you can use to pay your bills. So now, we’re down to 1.9 trillion liquid. Well, about another trillion is going to have to be held in what’s called a “precautionary reserve” to bail out the Chinese banking system.

When you look at the Chinese banking system, private estimates are that the bad debts are 25% of total assets. Banks usually run with 5, maybe 7-8% capital. Even if you said 10% capital, well, if 25% of your assets are bad, that completely wipes out your capital, so the Chinese banking system is technically insolvent, even though they don’t admit that. I mean, they cook the books, they take these bad loans. Let’s say I’m a bank and I have a loan to a state owned enterprise, a steel mill or something and the guy can’t pay me, can’t even come close to paying me and the loan’s due, I say, “Well, look, you owe me 300 million dollars. I’ll tell you what. I’ll give you a new loan for 400 million dollars, but I’ll take the money and pay myself back the old loan plus the interest, and then I’ll give the new loan to your maturity and I’ll see you in two years.”

So, if you did that in the U.S. banking system you’d go to jail. You’re not allowed to do that. You’re throwing good money after bad and you’re supposed to right off a loan that is clearly not performing or where the borrower is unable to pay. But in this case, it’s just extend to pretend, and so it’s still on the books, in my example, 400 million dollar good loan with a two year maturity, but in fact it’s a rotten loan that the guy couldn’t pay in the first place, and now he just can’t pay a bigger amount. He’s probably going to go bankrupt and I’ll have to write it off at the end of the day. So, with that as background for the Chinese banking system, people kind of shrug and say, “Well, can’t China just bail it out? They’ve got all this money.”

Well, the answer is they could, and they’ve done so before, and they can bail it out, but it’s going to trust a trillion dollars, so you’ve got to put a trillion dollars to one side, for when the time comes, to bail out the banking system. Well, now you’re down to 900 billion, right? Remember, we started with four trillion, 1.1 trillion’s out door, 1 trillion’s illiquid, 1 trillion you’ve got to hold to one side to bail out the banking system, well now you only have 900 billion of liquid assets to defend your currency, to prop up the Chinese yuan. But the problem is the reserves are going out the door at a rate of, it varies month to month, 30, 40, 50 billion dollars a month. Some months more, some months over 100 billion dollars.

Read more …

Blair getting involved will be a huge boon for Brexit.

Brexit Was A Revolt Against Snobs Like Tony Blair (Spec.)

The brass neck of Tony Blair. The Brexit vote was ‘based on imperfect knowledge’, says the man who unleashed barbarism across the Middle East on the basis of a student dissertation he printed off the internet. Who marched thousands into unimaginable horror on the basis of myth and spin. That NHS claim on the side of the Leave bus is small fry, infinitesimally small fry, in comparison with the guff this bloke came out with. It didn’t cause anyone to die, for one. For Blair to lecture the British people about truth is an affront to memory and decency and reason. No self-respecting citizen should put up with it. Blair made his comments about our ‘imperfect knowledge’ – dimwits that we are – in a speech for Open Britain, a cross-party pro-EU group, in London this morning.

The speech sums up the elitism and arrogance and contempt for democracy of those Remainers who just cannot accept that they lost. ‘The people voted without knowledge of the true terms of Brexit’, Blair haughtily declared. Rubbish. We all knew what it meant to tick the box saying ‘Leave the European Union’ — it meant leaving the European Union. It meant what it said — and we meant what we said. Blair and the connected, moneyed weepers for the EU who make up Open Britain can’t get their heads around this. They think we didn’t know what we were doing. And so they’ve come to enlighten us and make us think again. Remainers must ‘rise up’, says Blair, and turn the throng’s ‘imperfect knowledge’ into ‘informed knowledge’ by giving us ‘easy to understand’ information about how Brexit will ‘cause real damage to the country’.

Risen, brave, ‘informed’ Remainers must hold back the ‘rush over the cliff’s edge’, he said. The whole thing stinks to the heavens of paternalism. Blair is positioning himself and his switched-on mates as the possessors of information that we the imperfect plebs lack. Like lemmings we’re leaping off the cliff, and this good man must save us. He must impart to us his wisdom — in ‘easy to understand’ ways, of course, because we can’t handle anything too complex — and in the process fulfil the duty of the political leader to ‘give answers’ rather than ‘ride the anger’ of the public. He depicts Open Britain as cool and knowledgable, and Leavers as uninformed and angry. It’s positively aristocratic, with Open Britain fancying itself as the small but beautiful font of wisdom in a land of madness.

[..] Blair spoke in the language of revolution. Remainers must ‘rise up’. He talked about the need for a ‘revolt’, by ‘force of argument’, against the Leave vote. Excitable media outlets have gone even further, describing his speech as a call ‘for people to “rise up” against Brexit’, a plea that ‘Britain must rise up against Brexit’.

Read more …

How to kill a city, part 826.

Small Businesses Face Being ‘Driven Out Of London’ (Ind.)

An increase in business rates is one of biggest issues concerning small businesses in London, easily trumping fears around economic uncertainty and worries relating to recruiting the right talent. According to a survey by the Federation of Small Businesses (FSB) and trade body Camden Town Unlimited, the average micro business in the city, defined as a company with fewer than 10 employees, will be paying business rates of £17,000 as of April this year under a Government hike. “London is in serious danger of losing its vital support system of micro and small businesses,” the FSB’s chair for London, Sue Terpilowski, said in a statement. “We need to realise that the hard costs of operating a business in the capital are starting to outweigh the benefits which simply does not make economic sense – and so tacking these burdens at the spring Budget is critical,” Ms Terpilowski added.

Business rates – which are sometimes referred to as non-domestic rates – are levies that companies occupying commercial properties pay. That tax goes towards covering the cost of services provided by local authorities and the emergency services. The survey found that close to three quarters – 74% – of businesses consider rates to be one of the biggest issues affecting them, while 36% cited economic uncertainty, and, one third said that the difficulty around recruiting the right staff was their biggest concern. “The new business rates will drive firms out of London, force some businesses to cut staff or close down altogether,” said Simon Pitkeathley, the chief executive of Camden Town Unlimited.

Read more …

Fast and furious. Caught in the oil wars.

Norway Central Bank Chief Warns Of Sharp Drop In Wealth Fund (BBG)

Norway’s central bank governor sharpened his warning on rising spending of oil revenue as he drew up scenarios for a 50% loss of capital over the next 10 years for the world’s biggest sovereign wealth fund. Governor Oystein Olsen said that the continued rise in oil cash spending, which now accounts for about 20% of the budget and 8% of GDP, must now be halted to protect the $900 billion fund, the world’s largest sovereign pool of cash. “With a high level of oil revenue spending, there’s a risk of a sharp reduction in the fund’s capital,” Olsen said in the traditional Annual Address in Oslo Thursday. “This could, for example, happen if a global recession triggers both a decline in oil revenue and low or negative returns on the fund’s capital.” Government withdrawals from the fund are estimated to jump about 25% this year after an historic first outflow last year. The Conservative-led government was last year forced to dip into the oil fund for the first time to cover budget needs and protect the economy amid a plunge in oil prices.

Read more …

Why the euro is doomed.

Only Germans Love the Euro These Days (BBG)

French presidential candidate Marine Le Pen unsettled investors with her pledge to pull France out of the euro and re-denominate all French debt in newly minted francs. Polls suggest Le Pen won’t get the chance; she is expected to lose a second-round runoff. Even if polls are correct this time, that doesn’t mean the euro is safe. In fact, political support for the single currency has been waning – especially in Germany’s two largest euro-zone trading partners. In both France and Italy, there is now a plurality of support for candidates who advocate a withdrawal from the euro, with pro-euro candidates gathering less than 30% in polls. In France, anti-euro candidates – Le Pen and Socialist Jean-Luc Melanchon – together have nearly 40% support.

Of course, that doesn’t mean that all of Le Pen’s supporters, or Melanchon’s, oppose the euro. Most French voters still tell pollsters they favor the euro; but clearly that support waning, as the latest Eurobarometer poll showed. Anti-euro sentiment, once a blip on the fringes of public opinion, is now credible and has found its way onto political platforms. Respondents are asked whether they think the euro is a good or bad thing for their country. In Italy, the euro gets even less love than in France, with 47% saying the euro is a “bad” thing for their country. That is in stark contrast to Germany, where there is now a clear majority in favor of the euro. This chart shows how opinion has changed over time:

This is a dramatic reversal in opinion: A German population that was initially reluctant to give up the Deutsche mark is now firmly wedded to the euro, while support in France and Italy has declined (particularly sharply in Italy’s case). But this shift is the logical result of the euro’s structural deficiencies. German industry, whose productivity has been increasing more than its European counterparts, now dominates the continental economy. While German unemployment was decreasing and its economy recovering from the financial crisis, Italy was stagnant with rising unemployment. Already saddled with a very large public debt (now over 130% of gross domestic product), Italy could neither reflate its economy, nor bail out its banks, while whole segments of its industry, particularly in lower and medium-cost goods, have disappeared.

Read more …

Damning: 56% of Greeks make less than €8,600 a year. And the Troika wants to tax them more. “..the tax- free income threshold, now at about €8,600 per person per year, a number the IMF maintains lets some 56% of wage-earning Greeks escape paying income tax.”

How Do You Say Deja Vu In Greek? (R.)

[..] it would not be trite to say that another festering row with Greece is the last thing the euro zone needs when faced with a protectionist U.S. president, Britain leaving the European Union, and anti-euro politicians vying for power or presence in French, Dutch and German elections. So EU officials have been urging speed in finding agreement and calmly warning of instability ahead if none is found. “There is a common understanding that time lost in reaching an agreement will have a cost for everyone,” the European commissioner responsible for the euro, Valdis Dombrovskis, told Greek news portal Euro2day. The issue, however, is multi-layered and thus particularly complex. Part of it is about what kind of primary surplus – what is left in a surplus budget before debt obligations – Greece must reach and run for some time.

The bailout, signed by Greece and euro zone lenders, says 3.5% of GDP(which would be by far the highest in the euro zone). The IMF, the other major lender, says that is undoable without further Greek belt-tightening. It says 1.5% of GDP and some form of debt relaxation – for example, over what is paid when – would be more realistic and sustainable. The IMF, furthermore, says it won’t participate in any bailout that it does not believe to be viable. Germany and others say that the IMF must be a part of the bailout or there is no deal. Both lenders have told Greece they want about €3.6 billion in additional savings, including a reduction in the tax- free income threshold, now at about €8,600 per person per year, a number the IMF maintains lets some 56% of wage-earning Greeks escape paying income tax.

Greece says no. Its economy contracted again in the fourth quarter of 2016, nearly one in four Greeks is unemployed and its pensioners have already seen 11 cuts to income. So plenty of scope for crisis – if not quite yet.

Read more …

Good example of why rising prices do not equal inflation. Greece is deflating like mad. Money velocity has plummeted, making recovery impossible.

Can Tax Increases Bring Inflation To Greece? (KTG)

Special consumption fees imposed on fuel, coffee, tobacco products and telecommunications beginning of the year skyrocketed consumer prices and led to the inevitable: inflation. According to Greek Statistics Authority ELSTAT inflation reached 1.5% in January from 0.3% in December. ‘This is almost a five-year high and above market expectations that were forecasting a 0.4% for January,’ Reuters notes. I do not know how ‘markets’ make their forecasts, but real Greek life shows a different picture. The supermarkets had massive discount offers in a plethora of goods in December. The special fees imposed as of 1.1.2017 were not immediately seen in supermarket prices but in fuel and tobaccoo products and telecommunications. Super markets kept offering discounts until around January 20th. Then the “households party” was over.

On February 1st, the price for half a kilo filter coffee went up to €7.68 from €5.46. Apparently sales stagnated, the import company lowered the price by 1 euro. A week later, the discount offer was just 50 cents. Officially, the special fee was supposed to be €2-3 per kilo of roasted coffee. In real life, the increase is higher €2.12 for just half a kilo. Similarly, the price for 400-gr package for a cocoa drink of a well known international brand went up to €3.40 from €2.60. At the same time, the cheaper soft package disappeared from the supermarket shelves. Here to note that for year the hard package used to contain 500gr. Sometime in 2010, I was badly surprised to see the package was down to 400gr, while the price remained the same.

In real life, I have to spend a total of €9 to €10 more per supermarket visit once a week. This makes a nice sum of €40 more per month. And that’s alone for the supermarket. Add the increases in other sectors and start the calculation.

Read more …

As the EU keeps stressing the importance of unity, the Troika inches ever closer to causing a civil war in Greece. Unity is not just a word.

Greek Labor Minister Says Pensioners Can Barely Make Ends Meet (K.)

Greece’s Minister of Labor, Social Security and Social Solidarity Effie Achtsioglou insisted in a letter published Friday in the Financial Times that Greek pensioners have barely enough to live on and urged IMF chief Christine Lagarde to listen. “We cannot accept IMF insistence on further cuts in pensions. As minister for pensions I must answer, hoping that IMF managing director Christine Lagarde will listen,” she said, ahead of Monday’s Eurogroup, in a bid to explain why Greece cannot make any more pension cuts. “The narrative about Greek pensions is driven by demands of its creditors. They argue that the pension system is overgenerous and a drain on the economy,” she said, adding that it is based on the crude statistic that pensions require annual transfers from the state budget of around 11% of GDP in Greece compared with the eurozone average of 2.25%.

This comparison, she said, is misleading. “Following the implementation of the new pension law last year, total state financing of pensions is projected at less than 9% of GDP,” she explained. “The bottom line is that Greece’s old people are much worse off than elsewhere in Europe because they do not have access to other benefits. Per capita income for individuals aged over 65 is about €9,000, compared with €20,000 in the eurozone.” she added, asking “how could the major problem confronting Greece be overgenerous pensions, when 43% of pensioners receive less than €660 a month?.”

Read more …

PRESS CONFERENCE

searching
inside his cranium

trying to find
a brain to rack,

he found the word
”uranium”

and launched
an unclear attack

Brian Bilston

Feb 142017
 
 February 14, 2017  Posted by at 10:09 am Finance Tagged with: , , , , , , , , , ,  2 Responses »
Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInShare on TumblrFlattr the authorDigg thisShare on RedditPin on PinterestShare on StumbleUponEmail this to someone


David Myers Theatre on 9th Street. Washington, DC July 1939

 


Top Trump Aide Flynn Resigns Over Russia Contacts (AFP)
Judge Grants Injunction Against Trump Travel Ban In Virginia (AP)
Is Trump the New Boris Yeltsin? (Max Keiser)
Bond Traders Fear Yellen Is Planning A ‘St. Valentine’s Day Massacre’ (MW)
Yellen Outlook ‘Irrelevant’ Because Trump Will Reshape Fed (CNBC)
The Fed Is Bad For America – But Getting Rid Of It Isn’t The Answer (DDMB)
Made For Each Other (Jim Kunstler)
Democracies Must Reclaim Power Over The Production Of Money (Pettifor)
China Factory Prices Surge Most Since 2011, Boosting Reflation (BBG)
Putin’s Central Banker Is on a Tear (BBG)
The Euro May Already Be Lost (ETT)
Greece To Exceed Its Primary Surplus Target In 2018 (R.)
Greece Lines Up Rothschild For Debt Advisory Role As Bankruptcy Looms (IW)
To Those Who Kept Me Alive All These Years: Thank You (Chelsea Manning)
Lesbos Doctors Accuse NGOs Of Failing To Care For Refugees (K.)

 

 

I still don’t fully get it. Was Flynn set up? Hard to believe he didn’t know his calls would be recorded and transcribed. He ran US -military- intelligence for a number of years, for pete’s sake. How could he not have known?

Top Trump Aide Flynn Resigns Over Russia Contacts (AFP)

Donald Trump’s national security advisor Michael Flynn resigned amid controversy over his contacts with the Russian government, a stunning first departure from the new president’s inner circle less than a month after his inauguration. The White House said Trump had accepted Flynn’s resignation amid allegations the retired three star general discussed US sanctions strategy with Russia’s ambassador Sergey Kislyak before taking office. Flynn – who once headed US military intelligence – insisted he was honored to have served the American people in such a “distinguished” manner. But he admitted that he “inadvertently briefed” the now Vice President Mike Pence with “incomplete information” about his calls with Kislyak. Pence had publicly defended Flynn, saying he did not discuss sanctions, putting his own credibility into question.

“Regarding my phone calls with the Russian Ambassador. I have sincerely apologized to the President and the Vice President, and they have accepted my apology,” read Flynn’s letter, a copy of which was released by the White House. The White House said Trump has named retired lieutenant general Joseph Kellogg, who was serving as a director on the Joint Chiefs of Staff, to be interim national security advisor. Flynn’s resignation so early in an American administration is unprecedented, and comes after details of his calls with the Russian diplomat were made public – upping the pressure on Trump to take action. Several US media outlets in Monday reported that top Trump advisors were warned about Flynn’s contacts with the Russians early this year. Questions will now be raised about who knew about the calls and why Trump did not move earlier to replace Flynn.

Read more …

The ban is now all but dead. But they’ll throw out another one soon.

Judge Grants Injunction Against Trump Travel Ban In Virginia (AP)

A federal judge Monday granted a preliminary injunction barring the Trump administration from implementing its travel ban in Virginia, adding another judicial ruling to those already in place challenging the ban’s constitutionality. The ruling is significant from a legal standpoint because U.S. District Judge Leonie Brinkema found that an unconstitutional religious bias is at the heart of the travel ban, and therefore violates First Amendment prohibitions on favoring one religion over another. She said the evidence introduced so far indicates that Virginia’s challenge to the ban will succeed once it proceeds to trial. A federal appeals court in California has already upheld a national temporary restraining order stopping the government from implementing the ban, which is directed at seven Muslim-majority countries.

But the ruling by the 9th Circuit Court of Appeals was rooted more in due process grounds, said Virginia Attorney General Mark Herring, a Democrat who brought the lawsuit against Trump in Virginia. “Judge Brinkema’s ruling gets right to the heart of our First Amendment … claim,” Herring said in a conference call Monday night. In her 22-page ruling, Brinkema writes that Trump’s promises during the campaign to implement what came to be known as a “Muslim ban” provide evidence that the current executive order unconstitutionally targets Muslims. “The president himself acknowledged the conceptual link between a Muslim ban and the EO (executive order),” Brinkema wrote. She also cited news accounts that Trump adviser Rudy Giuliani said the executive order is an effort to find a legal way for Trump to be able to impose his Muslim ban. Herring said that “the overwhelming evidence shows that this ban was conceived in religious bigotry.”

Read more …

“The creeping tide of kleptocracy will be appeased at every juncture.”

Is Trump the New Boris Yeltsin? (Max Keiser)

The hope that Trump would take on Wall Street crooks is dead. It was a long shot to begin with but it’s now clear that his level of financial illiteracy and corruption, a hallmark of Obama’s Presidency, is on par, or perhaps even exceeds Obama’s. What we see shaping up in the first few weeks of Trump’s Presidency is his emergence as the new Boris Yeltsin, the puppet idiot installed by America’s neo-cons and Wall St. bankers after the Soviet Union collapsed to drown the country in debt and deceit. Yeltsin was a drunk clown who gave away the country to oligarchs, who turned the country into a kleptocracy – all happening under the laughing approval of President Bill Clinton. Today Trump fills the Yeltsin role in American politics. As Wall St. laughs, Trump begins the process of giving away (read: privatizing) America’s assets to be owned by our new ruling kleptocracy.

Inflation is coming…But not because wages go up, but because price gouging and monopoly pricing starts to dominate our everyday lives with no cheap substitutes coming from overseas due to an increasing global level of distrust and illiquidity among trading partners. Leveraged buyouts fueled by bailouts and free money from the central bankers will continue to kill competition in America. Media, energy, pharmaceutical, finance and agriculture will all be controlled by impregnable monopolies (and Warren Buffett). It’s a pitiful sham and a godawful shame – a situation where Trump’s supporters will, in the not too distant future, turn on him after they’ve had their illusions shattered – but will it be too late? The creeping tide of kleptocracy will be appeased at every juncture. The vanishing middle class will cling to their guns and bibles – hoping for a miracle. They simply will not be able to believe that they could have been so wrong. The triumph of the will.

Read more …

The always colorful language of Albert Edwards.

Bond Traders Fear Yellen Is Planning A ‘St. Valentine’s Day Massacre’ (MW)

Is Federal Reserve Chairwoman Janet Yellen capable of conducting a bond-market bloodbath? That’s what some on Wall Street are wondering. Albert Edwards, market strategist at Société Générale and noted permabear, expects Yellen, who is set to deliver semiannual testimony to the Senate Banking Committee on Tuesday, will trigger a steep bond selloff by talking up the possibility that the central bank will raise interest rates in March. In a note, he refers to the possibility as “The St. Valentine’s Day Massacre,” a homage to the 1929 gangland murder of seven men in a garage in the Lincoln Park neighborhood on Chicago’s North Side. The killings were allegedly planned by famed mobster Al Capone, who was trying to wrest power away from Chicago’s Irish gangsters.

Edwards isn’t the only one who expects Yellen to remind investors that the central bank could raise interest rates at its next meeting for what would be the third time in a decade. “The market is bracing for the possibility that Yellen will talk up the chances of a rate increase in March,” said Guy LeBas, chief fixed income strategist at Janney. Treasury yields, which move inversely to prices, are on track to rise for the third straight day, a selloff that has largely been driven by these concerns, LeBas said. The yield on the 10-year Treasury note rose 3.6 basis points to 2.447%. But a March hike is still viewed as far from likely. Although the central bank back projected back in December that it would raise interest rates three times in 2017, investors have remained skeptical—probably because they’ve been burned by the Fed before.

Read more …

If Brainard leaves too, that makes five seats to fill with Yellen gone early next year.

Yellen Outlook ‘Irrelevant’ Because Trump Will Reshape Fed (CNBC)

With at least three vacancies expected on the Federal Reserve’s Board of Governors this year, the central bank may not be exempt from a Trump-led shakeup, strategist Mark Grant told CNBC on Monday. “The Fed of today is not going to be the Fed of tomorrow,” the chief strategist at Hilltop Securities told “Squawk Box.” Grant, who accurately predicted the Brexit vote and Donald Trump’s victory, said the president and Treasury Secretary nominee Steven Mnuchin will take advantage of filling key vacancies on the Fed board to further their agenda. Grant spoke a day ahead of Fed Chair Janet’s Yellen’s semiannual monetary report to the Senate. The Fed has said it expect to raise interest rates three times this year.

“I think what the Fed says at this point is, for all practical purposes, irrelevant, because Mr. Trump is going to be able to appoint three members of the Fed,” Grant said. “I think they’re going to be business people and the days of an academic, economist Fed are going to be over.” Removing academics from the Fed’s board remains a point of contention, but Grant said the Trump administration is likely to do so with the economic landscape and policy goals in mind. “I also believe that Trump and company, as I call them, know as they put in the infrastructure or the military expansion that there’s going to be a balance to the balance sheet, and … that the new people on the Fed are going to keep interest rates low,” Grant said. “So all this talk of a three interest rate or four interest rate hike, in my opinion, is baloney.”

On Friday, Fed Governor Daniel Tarullo announced plans to leave the board in April, creating a third vacancy. Danielle DiMartino Booth, author of “Fed Up: An Insider’s Take on Why the Federal Reserve Is Bad for America,” said that there is a high probability that board member Lael Brainard will also leave, creating yet another vacancy. She said Trump’s bold spending plan may require low interest rates (and, in turn, a more dovish Fed), but she wondered about whom the president would appoint to the board. “It’s really going to come down to whether or not he’s got the gumption to totally change the complexion of the Federal Reserve board, or if he steps back and says, ‘You know what, I’ve got to finance all this stuff, so I’m going to put more doves in.’ These are hard decisions,” she said.

Read more …

Fed insider Danielle DiMartino Booth’s new book Fed Up is here.

The Fed Is Bad For America – But Getting Rid Of It Isn’t The Answer (DDMB)

On September 20, 2005, Mark Olson did something ordinary that’s since proved to be extraordinary. Never heard of him? You’re not alone. Nevertheless, the banking expert had the gumption to lob a dissenting vote in his capacity as a governor on the Federal Reserve Board. He joined the estimable company of Edward “Ned” Gramlich, a fellow governor who dissented at the September 2002 Federal Open Market Committee meeting. Gramlich is best known for sounding an early warning on the subprime crisis, and being resolutely dismissed by Alan Greenspan. The two gentlemen represent central banking’s answer to the “Last of the Mohicans,” the sole two dissents that have been recorded by governors since 1995. And that’s a problem. At last check, ‘No” was not a four-letter word.

It’s no longer a secret that an abundance of anger is churning among many working men and women who feel they’ve been excluded by the current economic recovery and the longest span of job creation in postwar history. The funny thing about a sense of abandonment is that more often than not, anger follows. What too few Americans appreciate is how directly the inability to say “no” at the Fed has determined their station in life. But that’s just the case. The Fed directly impacts a slew of the most important decisions we make — the values we instill in our children, the things we buy and how they are financed and how we best prepare for what follows after a lifetime of laboring in the trenches.

Stop and think for a moment about the first time you discovered the miracle of compounding interest, that first bank statement that proved savings does pay. Can your children experience that same sensation? What about the roof over your head and the car you drive? Can you afford the payments or did you stretch to buy more than you could afford, out of sheer necessity? What about your mom and dad’s retirements? Do they say their prayers that the stock market will hang in there and that the safety of their bond holdings will protect them if that’s not the case? All of these dysfunctional dynamics lay at the feet of an academic-led Fed being hellbent on launching unconventional monetary policy with the false prerequisite that interest rates had to be zero before quantitative easing (QE) could be deployed.

Read more …

“The Republican Party is Norma Desmond’s house in Sunset Boulevard, starring Donald Trump as Max the Butler, working extra-hard to keep the illusions of yesteryear going.”

Made For Each Other (Jim Kunstler)

Don’t be fooled by the idiotic exertions of the Red team and the Blue team. They’re just playing a game of “Capture the Flag” on the deck of the Titanic. The ship is the techno-industrial economy. It’s going down because it has taken on too much water (debt), and the bilge pump (the oil industry) is losing its mojo. Neither faction understands what is happening, though they each have an elaborate delusional narrative to spin in the absence of any credible plan for adapting the life of our nation to the precipitating realities. The Blues and Reds are mirrors of each other’s illusions, and rage follows when illusions die, so watch out. Both factions are ready to blow up the country before they come to terms with what is coming down.

What’s coming down is the fruit of the gross mismanagement of our society since it became clear in the 1970s that we couldn’t keep living the way we do indefinitely — that is, in a 24/7 blue-light-special demolition derby. It’s amazing what you can accomplish with accounting fraud, but in the end it is an affront to reality, and reality has a way of dealing with punks like us. Reality has a magic trick of its own: it can make the mirage of false prosperity evaporate. That’s exactly what’s going to happen and it will happen because finance is the least grounded, most abstract, of the many systems we depend on. It runs on the sheer faith that parties can trust each other to meet obligations. When that conceit crumbles, and banks can’t trust other banks, credit relations seize up, money vanishes, and stuff stops working.

You can’t get any cash out of the ATM. The trucker with a load of avocados won’t make delivery to the supermarket because he knows he won’t be paid. The avocado grower will have to watch the rest of his crop rot. The supermarket shelves empty out. And you won’t have any guacamole. There are too many fault lines in the mighty edifice of our accounting fraud for the global banking system to keep limping along, to keep pretending it can meet its obligations. These fault lines run through the bond markets, the stock markets, the banks themselves at all levels, the government offices that pretend to regulate spending, the offices that affect to report economic data, the offices that neglect to regulate criminal misconduct, the corporate boards and C-suites, the insurance companies, the pension funds, the guarantors of mortgages, car loans, and college loans, and the ratings agencies.

The pervasive accounting fraud bleeds a criminal ethic into formerly legitimate enterprises like medicine and higher education, which become mere rackets, extracting maximum profits while skimping on delivery of the goods. All this is going to overwhelm Trump soon, and he will flounder trying to deal with a gargantuan mess. It will surely derail his wish to make America great again — a la 1962, with factories humming, and highways yet to build, and adventures in outer space, and a comforting sense of superiority over all the sad old battered empires abroad. I maintain it could get so bad so fast that Trump will be removed by a cadre of generals and intelligence officers who can’t stand to watch someone acting like Captain Queeg in the pilot house.

Read more …

Ann Pettifor’s new book is out too.

Democracies Must Reclaim Power Over The Production Of Money (Pettifor)

Today, the international monetary system is run by the equivalent of Goethe’s Sorcerer’s Apprentice. In the absence of the equivalent of the Sorcerer – regulatory democracy – financial risk-takers and fraudsters have, since 1971, periodically crashed the global economy and trashed the lives of millions of people. And let’s be clear: there is no such thing as effective global regulation. Ask the Bitcoiners – that is why they operate in the ‘dark web’. The question is this: who should control our socially constructed, publicly-backed financial institutions and relationships? Private, unaccountable, rent-seeking authority? Or public, democratic, regulatory authority? Policy and regulation requires boundaries. Pensions policy, criminal justice policies, taxation policies, policies for the protection of intellectual property – all require boundaries.

Finance capital abhors boundaries. Like the Sorcerer’s Apprentice, global financiers want to be free to use the magic of money creation to flood the global economy with ‘easy’ (if dear) money, and just as frequently to starve economies of any affordable finance. And they want to have ‘the freedom’ to do that in the absence of the Sorcerer – regulatory democracy. If we want to strengthen democracy, then we must subordinate bankers to their role as servants of the economy. Capital control over both inflows and outflows, is, and will always be a vital tool for doing so. In other words, if we really want to ‘take back control’ we will have to bring offshore capital back onshore. That is the only way to restore order to the domestic economy, but also to the global economy.

Second, monetary relationships must be carefully managed – by public, not private authority. Loans must primarily be deployed for productive employment and income-generating activity. Speculation leads to capital gains that can rise exponentially. But speculation can also lead to catastrophic losses. Loans for rent-seeking and speculation, gambling or betting, must be made inadmissible. Third, money lent must not be burdened by high, unpayable real rates of interest. Rates of interest for loans across the spectrum of lending – short- and long-term, in real terms, safe and risky – must, again, be managed by public, not private authority if they are to be sustainable and repayable, and if debt is not going to lead to systemic failure. Keynes explained how that could be done with his Liquidity Preference Theory, still profoundly relevant for policy-makers, & largely ignored by the economics profession.

Read more …

Remember: there can be no inflation without consumer spending going up. Prices may rise for other reasons, but that’s not the same.

China Factory Prices Surge Most Since 2011, Boosting Reflation (BBG)

China’s producer prices increased the most since 2011, with the world’s biggest exporter further lifting the outlook for global inflation. Producer price index rose 6.9% in January from a year earlier, compared with a median estimate of 6.5% in a Bloomberg survey and a 5.5% December gain. Consumer-price index climbed 2.5%, boosted by the week-long Lunar New Year holiday beginning in January this year, versus a 2.4% rise forecast by analysts. Producer prices for mining products surged 31% year-on-year while those for raw materials climbed 12.9%, the National Bureau of Statistics said Tuesday. China is again exporting inflation as factories increase prices after emerging from years of deflation. That fresh strength may moderate in coming months as year-ago comparisons gradually rise and Donald Trump’s policies add uncertainties to the global demand outlook.

Continued pressure for raw materials is forcing companies to increase prices, according to Tao Dong at Credit Suisse in Hong Kong. “Without strong demand, producers have limited space for price hikes,” he said. “But I see a wide range of price increases because the cost push is so severe.” Both consumer and producer inflation will peak soon, Julian Evans-Pritchard, an economist at Capital Economics in Singapore, wrote in a report. “Tighter monetary policy, slowing income growth and cooling property prices should keep broader price pressure contained over the medium-term,” he said. “The latest inflation data add to the case for a continued moderate tightening in monetary policy,” Tom Orlik, chief Asia economist at Bloomberg Intelligence in Beijing, wrote in a report.

“The central bank is likely to continue on that path in the months ahead, as policy makers lean against excess leverage, yuan weakness and capital outflows, and nascent inflationary pressure.” “We haven’t seen significant pass-through effect from PPI to CPI inflation yet, suggesting that the strong rebound in PPI inflation is a reflection of proactive fiscal policies,” Zhou Hao, an economist at Commerzbank in Singapore, wrote in a report. With the Communist Party Congress later this year, “local governments are keen to deliver decent growth figures. Against this backdrop, the infrastructure investment pipeline will remain solid.”

Read more …

It’s almost 2 years ago that I wrote Russia’s Central Bank Governor Is Way Smarter Than Ours. This is a pretty crazy story. Russian banking appears to take place in some kind of black hole, complete with event horizons.

Putin’s Central Banker Is on a Tear (BBG)

In Russia, Peresvet Bank had an edge no other big private financial institution could match. Its largest shareholder was the powerful Russian Orthodox Church. In a 2015 pitch to investors, Peresvet said the backing of the church and the bank s other big owner, Russia’s Chamber of Commerce and Industry, gave it a quasi-sovereign status. For more than two decades, big state companies stashed their cash with the bank, whose ponderous full name Joint Stock Commercial Bank for Charity and Spiritual Development of Fatherland suggested its grand standing. Even so, it took less than a month last fall for the bank, one of Russia’s 50 largest, to come undone and be taken over by the central bank. Peresvet was just the latest casualty in a financial purge presided over by Central Bank chief Elvira Nabiullina, a bookish economist who’s a favorite of Vladimir Putin.

The regulator closed almost 100 banks in 2016, and in a cleanup with few precedents, Nabiullina has shut almost 300 over the past three years. This may be only the beginning. There are about 600 banks left across the world’s largest country, but Fitch Ratings analyst Alexander Danilov, adjusting for population, calculates that as an emerging market Russia would be fine with about 1 in 10 of those. A warning from Fitch signaled Peresvet’s fall: Almost a tenth of its loans were to companies seemingly without real businesses. Then Russian media reported that the chief executive officer, Alexander Shvets, had disappeared. The bank issued denials and publicized positive comments from other analysts. But within days, as depositors clamored for their cash, the bank said it was “temporarily” limiting withdrawals. The regulator took control of the lender four days later.

As of late January the central bank was still trying to determine the scale of Peresvet’s financial woes. Nabiullina, 53, has emerged as one of Putin’s most influential economic advisers following a low-key government career that began in the 1990s, before the Russian leader’s rise to power. Soft-spoken and unassuming, she runs what in Russia is called a “megaregulator.” When it comes to the economics behind Putin’s overarching goal of restoring Russia’s place in the world, there’s no one more influential. As central bank governor, she’s in charge of a banking system whose weak links are an economic burden, driving up the cost of financing so badly needed in the face of stagnant growth. She’s also the chief guardian of Russia’s foreign currency reserves. Those holdings are more than just a tool of monetary policy; according to several senior officials, Putin views them as a vital safeguard of the country’s sovereignty. [..]

Read more …

The eurozone’s core problem: as soon as harder economic times come, the poorer countries are hit hardest. Solution: a transfer union like the US. But that will never be accepted in the EU, because it means giving up more sovereignty.

From Finland’s EuroThinkTank, h/t Mish

The Euro May Already Be Lost (ETT)

The 1st of January 2017 marked the 18th anniversary of the European common currency, the euro. Despite its success from 1999 to 2007, after 2008 the euro has become a burden for many of its members. For example, living standards in Italy and Greece are below the levels when they joined the euro. Finland is the only Nordic country using the euro and it is also the only Nordic country which has not yet recovered from the financial crash of 2008. There have been many proposals on how to fix the euro and the EMU, but they are politically unpopular and unrealistic. In this blog-entry, we will argue that the euro will almost surely fail; we just do not know the exact timing of its demise. The problem of the euro can be visualized in the development of the GDP per capita.

Germany has been successful in the Eurozone, while Greece and Italy have not. France is not doing well either. The jury is still out for Finland. The different growth paths are a symptom of a general problem that has haunted currency unions for centuries. Competitiveness and productivity develop at a different pace in different countries. Over time, this leads to large competitiveness differences among the members of a currency union. These differences do not usually pose a problem during economic booms because strengthening aggregate demand supports ailing fields of production. However, when a currency union faces an economic downturn or a crisis, falling aggregate demand hits less competitive industries and countries hard and the financing costs of less competitive countries jump. This is an asymmetric shock.

The detrimental effects of asymmetric shocks can be mitigated by transferring funds from prosperous to declining member states. When the dollar union of the US threatened to fall apart during the Great Depression, the federal government enacted federal income transfers from prosperous states to aid ailing ones. The federal budget also increased rapidly and, in practice, income transfers became permanent. The no bailout policy of crisis-hit states had already been enacted earlier. According to the ECB, competitiveness of the German economy has improved by around 19.3%, Greece’s competitiveness has improved by around 6.5%, France’s around 3.9%, Finland’s around 1.7% and Italy’s around 0.9% since 1999. Thus, for survival in its present form and size, the Eurozone needs a similar income transfer system, that is, a full political union as in the US.

Read more …

Meaningless numbers.

Greece To Exceed Its Primary Surplus Target In 2018 (R.)

Greece will have a primary surplus in the budget of 3.7% of GDP next year, exceeding the target of 3.5% agreed with its euro zone creditors, the European Commission forecast on Monday. The size of next year’s Greek primary surplus, which is the budget balance before debt-servicing costs, is a bone of contention between euro zone governments and the IMF, which believes it will be only 1.5%. A further disagreement between the two lenders to Greece is what surplus Athens will be able to maintain in the years after 2018. The higher the surplus and the longer it is kept the less is the need for any further debt relief to Greece.

The IMF insists Greek debt, which the Commission forecast on Monday would fall to 177.2% of GDP this year from 179.7% in 2016 and then decline again to 170.6% in 2018, is unsustainably high and that Greece must get debt relief. Germany and several other euro zone countries say that, if Greece does all the agreed reforms, then debt relief will not be necessary. The Commission forecast that Greek investment would triple to 12% of GDP this year and rise further to 14.2% of GDP next year as the economy expands 2.7% in 2017 and 3.1% in 2018 after years of recession. It also forecast Greek unemployment would fall to 22% of the workforce this year from 23.4% last year and decline further to 20.3% in 2018.

Read more …

If all else fails, sell your soul.

Greece Lines Up Rothchild For Debt Advisory Role As Bankruptcy Looms (IW)

Greece is reportedly planning to hire Rothschild as its debt adviser, replacing current adviser Lazard in the role, as it attempts to end a long-running stand off with creditors. According to the Financial Times, government officials in Greece hope to finalise the appointment before a gathering of euro-area finance ministers on 20 February. Unless Greece receives fresh funds it will not be able to make €7bn of debt payments due this July, including €2.1bn to private sector creditors. In the role, Rothschild will reportedly advise the country on negotiations with creditors, potential inclusion in the European Central Bank’s bond-buying programme, and the sale of Greek government bonds.

The deal would replace the Greek government’s current deal with Lazard, which guided the country through its original bailout in 2012. According to the FT, out of Greece’s €323bn of outstanding government debt just €36bn is owned by private investors who hold Greek bonds, while the rest is owned by sector creditors. Last week, yields on two-year Greek bonds rose to their highest level since June last year after the IMF and the EU failed to reach an agreement on how to lend the €7bn required by the country to avoid bankruptcy. The IMF refused to sign up to the aid programme unless the EU grants further debt relief to Greece. However, the head of the eurozone’s €500bn rescue fund has rejected this demand.

Read more …

Power to you, Chelsea.

To Those Who Kept Me Alive All These Years: Thank You (Chelsea Manning)

To those who have kept me alive for the past 6 years: minutes after President Obama announced the commutation of my sentence, the prison quickly moved me out of general population and into the restrictive housing unit where I am now held. I know that we are now physically separated, but we will never be apart and we are not alone. Recently, one of you asked me “Will you remember me?” I will remember you. How could I possibly forget? You taught me lessons I would have never learned otherwise. When I was afraid, you taught me how to keep going. When I was lost, you showed me the way. When I was numb, you taught me how to feel. When I was angry, you taught me how to chill out. When I was hateful, you taught me how to be compassionate. When I was distant, you taught me how to be close. When I was selfish, you taught me how to share.

Sometimes, it took me a while to learn many things. Other times, I would forget, and you would remind me. We were friends in a way few will ever understand. There was no room to be superficial. Instead, we bared it all. We could hide from our families and from the world outside, but we could never hide from each other. We argued, we bickered and we fought with each other. Sometimes, over absolutely nothing. But, we were always a family. We were always united. When the prison tried to break one of us, we all stood up. We looked out for each other. When they tried to divide us, and systematically discriminated against us, we embraced our diversity and pushed back. But, I also learned from all of you when to pick my battles. I grew up and grew connected because of the community you provided.

Read more …

I’ll get back to this soon. It’s good to see others address this issue too.

Lesbos Doctors Accuse NGOs Of Failing To Care For Refugees (K.)

State hospital doctors on the eastern Aegean island of Lesvos, which has been hard particularly hit by the refugee crisis, have complained that nongovernmental organizations receiving European Union funding to help migrants are not doing enough, resulting in them being forced to bear an excessive burden. In a statement released on Monday, the island’s union of state hospital doctors said the two refugee camps at Moria and Kara Tepe do not have any pediatricians, meaning that all sick children from the camps must be treated at local hospitals, which are seriously understaffed. Noting that the NGOs “get paid handsomely” by the EU to help refugees, the union claimed they had “totally failed to provide humane conditions for the refugees.” Several human rights groups have complained about conditions at Greek refugee camps, particularly Moria and Elliniko, in southern Athens.

Read more …

Feb 112017
 
 February 11, 2017  Posted by at 10:26 am Finance Tagged with: , , , , , , , , , , ,  No Responses »
Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInShare on TumblrFlattr the authorDigg thisShare on RedditPin on PinterestShare on StumbleUponEmail this to someone


Dorothea Lange Play street for children. Sixth Street and Avenue C, NYC 1936

 


Trump ‘May’ Not Appeal Travel Ban Ruling To Supreme Court (ZH)
What’s Really Behind Trump’s Bungling Of The Immigration-Ban Order? (MW)
White House: Cohn-Led Tax Plan Is Real and It’s Phenomenal
Daniel Tarullo, Federal Reserve Regulatory Point Man, to Resign (WSJ)
Foreigners Dump Debt, Offering Up a Test for Rates (WSJ)
Russia’s Exile From World Markets May Soon Be Over (BBG)
EU Foreign Policy Chief Tells Trump Not To Interfere In Europe’s Politics (G.)
EU In Disintegration Mode (Martin Armstrong)
Eurozone, IMF Agree On A Common Stance On Greece (R.)
Greek Bailout Talks Set to Drag Past February Amid Standoff (BBG)
Universal Basic Income ‘Useless’, Says Finland’s Biggest Union (Ind.)
Snowden Claims Report Russia May ‘Gift’ Him To Trump Proves He’s No Spy (G.)
‘We Are Silently Dying’: Refugees In Greek Camp Slip Into Despair (MEE)

 

 

Keep ’em guessing.

Trump ‘May’ Not Appeal Travel Ban Ruling To Supreme Court (ZH)

Update: In the latest moment of confusion for the new administration, chief of staff Reince Priebus said the administration was still considering an appeal to the Supreme Court after a lower court soundly rejected its request to reinstate the order. Priebus’s statement came one hour after a White House official said it was not planning to challenge the Ninth Circuit Court of Appeals ruling upholding a temporary restraining order (TRO) blocking the ban, while Trump himself has said a new order on security could come next week. Priebus told The Washington Post that “every single court option is on the table, including an appeal of the Ninth Circuit decision on the TRO to the Supreme Court. In short, the situation remains fluid.

What a difference a day makes. Less than 24 hours after an angry Trump tweeted “SEE YOU IN COURT, THE SECURITY OF OUR NATION IS AT STAKE!” in the aftermath of yesterday’s adverse Appeals Court ruling… … the President has changed his mind and has decided not to see anyone in court – if only for the time being – because according to Reuters, his administration is not currently planning to appeal the temporary hold on his travel ban to the Supreme Court, a White House official said Friday according to multiple media sources. The official noted, however, that the White House said it will forge ahead on the broader battle against a lawsuit challenging the executive order, if out of court. Which means, that as per the steps we laid out last night, the administration will now prepare a brand new immigration order.

Trump hinted as much earlier in the day when during his press conference with Abe, he said: “We’ll be doing something very rapidly having to do with additional security for our country; you’ll be seeing that sometime next week,” Trump said with Abe by his side. He offered no specifics. He then added “we are going to keep our country safe,” he said on Friday. “We are going to do whatever’s necessary to keep our country safe.” He added he would continue to fight for the travel ban in courts, and that “ultimately, I have no doubt we will win that particular case.” Trump later told reporters aboard Air Force One that he would likely wait until next week to respond with legal action. “Perhaps Monday or Tuesday,” he said.

Trump earlier Friday hinted a new order could be in the works, but he declined to detail what it would look like. And so, while his travel ban is held up in court, Trump said he is considering ordering his staff to draft a new executive order that will have an easier time clearing legal hurdles. “We also have a lot of other options, including just filing a brand new order,” he told reporters on the presidential aircraft.

Read more …

“The justices were very unlikely to second-guess a president’s national security intelligence. They don’t consider that to be their job, they don’t want to do it, and they know how dangerous that could be – for the country and, indeed, for the standing of the courts. Legal precedent strongly suggests that they’d support the president so long as he could reassure them he had a rational basis for his action. But that’s not what Trump’s lawyer did.”

What’s Really Behind Trump’s Bungling Of The Immigration-Ban Order? (MW)

What on Earth is wrong with Donald Trump? Did he actually set out to lose his immigration ban in the appeals court deliberately, so that he could whip up his base into ever more fury at the “elites”? Contrary to what you may hear, the U.S. Court of Appeals for the 9th Circuit on Thursday did not — repeat: did not — repudiate Trump’s legal right to suspend selective immigration. It just repudiated the bungling incompetence with which his administration made the case. Yes, the three justices ruled: “Courts owe substantial deference to the immigration and national security policy determinations” of the president and Congress. That is “an uncontroversial principle that is well-grounded in our jurisprudence.” Indeed, as I pointed out earlier this week, it is well established that the president has very broad discretion to suspend immigration where he deems it necessary.

But that was not what the Trump administration claimed. Instead, they argued that they were actually above the law, the Constitution or legal review. “The Government has taken the position that the President’s decisions about immigration policy, particularly when motivated by national security concerns, are unreviewable, even if those actions potentially contravene constitutional rights and protections,” the justices wrote with disbelief. They added: “There is no precedent to support this claimed unreviewability, which runs contrary to the fundamental structure of our constitutional democracy.” You couldn’t make this up. Trump is now raging at the judges. But the blame for this fiasco lies entirely with him, and no one else. All the administration had to tell the appeals court was that it had rational reasons for suspending immigration from the seven specific countries.

Even with national security details “redacted,” the president’s lawyer could have laid out a simple case. Call it Iraq War II. “Intelligence sources say .. intelligence sources warn .. We have received intelligence ..” And so on. He could have kept it vague and menacing. He could have made it up. So long as he offered something. All the courts needed was an excuse. Cue our old friend “Curveball.” The justices were very unlikely to second-guess a president’s national security intelligence. They don’t consider that to be their job, they don’t want to do it, and they know how dangerous that could be – for the country and, indeed, for the standing of the courts. Legal precedent strongly suggests that they’d support the president so long as he could reassure them he had a rational basis for his action. But that’s not what Trump’s lawyer did.

Read more …

Having Goldman do your tax policies can backfire in seconds.

White House: Cohn-Led Tax Plan Is Real and It’s Phenomenal

Former Goldman Sachs president Gary Cohn is leading the effort to craft President Donald Trump’s plan to overhaul taxes that will be released within weeks, a White House official said. Unnamed congressional leaders have been consulted on the blueprint, the official said. It’s separate from Trump’s proposed budget, the official said, requesting anonymity because the plan is still under development. During a meeting at the White House with U.S. airline executives Thursday, Trump said he had a “phenomenal” plan to revamp business taxes that would be revealed within the next two or three weeks, without offering details. White House Press Secretary Sean Spicer told reporters later that day that specifics would emerge only in the coming weeks.

Still, he said the White House is at work on an outline of the most comprehensive business and individual tax overhaul since 1986. Cohn, 56, stepped down as Goldman’s president and COO in December after agreeing to lead Trump’s National Economic Council, an influential panel that helps coordinate and develop the president’s economic program. He was long seen as the heir apparent to the bank’s CEO Lloyd Blankfein. During a news conference Friday with Japanese Prime Minister Shinzo Abe, Trump said he was working with House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell on the tax measure, which would be guided by an “incentive-based policy” and released “over the next short period of time.”

Read more …

3 seats now, Yellen’s in a year. Politicians deciding where a by law independent central bank will turn.

Daniel Tarullo, Federal Reserve Regulatory Point Man, to Resign (WSJ)

The Federal Reserve’s lead architect of postcrisis financial regulations plans to resign this spring, giving President Donald Trump more freedom to remake the central bank and to accelerate a deregulatory agenda by putting his own appointees in charge of overseeing Wall Street. Daniel Tarullo, a 64-year-old Fed governor and the government’s most influential overseer of the American banking system, wrote to Mr. Trump on Friday saying he would resign “on or about” April 5. The move had been expected, and will remove from the policy-making debate one of the strongest voices for imposing safeguards on big banks and nonbanks to protect against another meltdown. Mr. Trump and many of his advisers have criticized those rules as hampering economic growth, and have suggested they will fill vacancies with officials who will handle banking policy with a lighter touch.

Stock prices for megabanks jumped on the news of Mr. Tarullo’s imminent departure, with shares in Bank of America and Citigroup rising almost 1% in the half-hour following the announcement. Mr. Tarullo’s resignation will also give the Trump administration broad discretion to put its own stamp on the central bank at a time when critics—including top Republicans in Congress—have accused the institution of lacking transparency and accountability. The departure could leave vacant three of the seven slots on the Fed’s board of governors. In addition, Janet Yellen’s term as chairwoman expires early next year. Filling those vacancies would also give the new president the chance to redirect the course of monetary policy, though it is unclear whether he would seek officials who would alter Ms. Yellen’s current course of cautious rate increases.

Mr. Tarullo’s announcement came exactly a week after Mr. Trump signed an executive order instructing regulators to review the rules implemented since the 2010 Dodd-Frank financial overhaul, and as Republican lawmakers intensify their plans to rewrite that landmark law. But partisan gridlock on Capitol Hill makes it unlikely Congress can make big changes, leaving it to the regulators Mr. Trump nominates to change the way rules are written, implemented and enforced.

Read more …

I’m going with Tim Duy’s tweet on this one: “I would say “Foreigners back away from US Treasury, proving they aren’t necessary to finance deficits.”

Foreigners Dump Debt, Offering Up a Test for Rates (WSJ)

Foreign buyers, led by China, are taking a smaller slice of the debt issued by the U.S. and other major economies, a change that may test the long-held belief that overseas money has kept interest rates low in the developed world. For much of this century, the world’s money increasingly sought the harbors of the bond markets of big, Western nations, principally the U.S. but also Germany and Britain. During that period those countries, and their citizens and companies, borrowed money at remarkably low interest rates. The receding foreign tide comes amid other momentous changes for the global economy and interest rates, including a turn in many political corners away from the free-trading ethos that has defined modern capitalism and glimmers of inflation that are encouraging major central banks to pare back their unprecedented economic stimulus measures.

Foreigners are steadily pulling back: As of November, for the first time since 2009, less than 30% of the $20 trillion market for U.S. government debt was held overseas, according to the latest official data, released in January, from the Treasury Department and Federal Reserve. In the U.K., it is now 27%, compared with a record of 36% in 2008. In Germany, it is 49%, down from a peak of 57% in 2014. The consequences from this shift are uncertain. Strong demand helps push up prices, and lower yields, of government bonds, at least in the short term. And buyers such as the Chinese state have been ravenous sources of demand.

Between 2000 and 2014, Chinese authorities built up a $4 trillion currency reserve, mainly through buying Treasurys to keep the yuan weak and help the country’s exporters. In January, its reserves fell below $3 trillion, the lowest level in almost six years. China is now trying to boost its currency, and its Treasury holdings fell by about $200 billion between May and November. “You create an environment where yields are manipulated lower by captive investors,” said Paul Donovan, chief economist at UBS Wealth Management. “There is now a shift going on here, which is most significant for the U.S.”

Read more …

Russia did so well under the sanctions, perhaps it’s better for them to keep doing what they were.

Russia’s Exile From World Markets May Soon Be Over (BBG)

As Donald Trump edges the U.S. closer to a thaw in relations with Vladimir Putin’s Russia, commodity investors are already jumping in. A plan by United Co. Rusal, the biggest Russian aluminum maker, for a London sale of shares valued at about $1.7 billion is the latest sign that Russia’s exile from world markets is over for the nation’s metal and mining giants. It’s a turnaround from years in which slumping raw-materials prices, a weak economy and sanctions imposed by then-U.S. President Barack Obama over the annexation of Crimea punished valuations and drove away foreign investors. Share sales by Russian mining companies have been rare since 2010. Until two months ago, PhosAgro’s offering in April 2013 was the last major sale by a non-state Russian mining company.

The fertilizer miner and processor is among those that have returned since December. Offerings from Novolipetsk Steel and TMK bring the total raised by mining and metals producers since then to about $575 million. Others weighing offers include En+ Group and Polyus. Magnitogorsk Iron & Steel, also known as MMK, is also considering selling a small stake to the market, people familiar said on Friday. Billionaire Mikhail Prokhorov’s Onexim may offer up to 5% of Rusal to investors soon, people said late Thursday. It’s not just plain equities. In a sign of investor appetite, steelmaker Severstal sold $250 million of convertible bonds on Thursday paying a zero coupon. “Investors see less risk in Russian companies now as the geopolitical situation has eased,” Rusal Deputy Chief Executive Officer Oleg Mukhamedshin said in an interview in Moscow last week following a company sale of eurobonds. “That affects demand for both bonds and equities.”

Read more …

Brussels trembles ahead of multiple national elections. But faking your great achievements and position of strength doesn’t actually make you look strong.

EU Foreign Policy Chief Tells Trump Not To Interfere In Europe’s Politics (G.)

The EU foreign policy chief, Federica Mogherini, has warned the Trump administration not to interfere in European politics, advising it to “deal with America first”. Speaking during a two-day visit to Washington, Mogherini did not make specific accusations but said that she sometimes heard voices in the new administration “saying the European Union is not necessarily a good idea. Inviting us to dismantle what we have managed to build and which has brought us not only peace, but also economic strength.” “It’s not for me or another European to speak about domestic political choices or decisions in the US. The same goes with Europe – no interference,” Mogherini said, speaking at the Atlantic Council thinktank. “Maybe America first means also that you have to deal with America first.”

Mogherini’s tone echoed the increasing alarm in Brussels over the new administration’s attitudes. Donald Tusk, the head of the European Council, has listed the new US administration and its “worrying declarations” as one of the leading global threats to the EU. Trump has not missed a chance to deride the EU, going out of his way to praise Brexit, and in an interview just before taking office, he depicted the continent as being dominated by Germany and on the brink of collapse. “President Trump believes that dealing bilaterally with different European countries is in US interests, that we could have a stronger relationship with the countries individually,” said Ted Malloch, the man tipped to be Donald Trump’s nominee as ambassador to the EU. He also accused Europe of “blatant anti-Americanism”.

She also took the opportunity to remind the administration, which hosted the UK prime minister, Theresa May, as the president’s first foreign guest, and promised her a favourable trade deal, that Britain did not have the right to negotiate independently until it was outside the EU, which was two years away at least. “The strength of the EU and the unity of the EU I believe is more evident today than it was a few months ago. This has to be clearly understood here,” Mogherini said. “This also means respect for the EU not simply as an institution. It is a union of 28 member states.”

Read more …

“..the Trump Administration [..] fail to grasp that talking the dollar down will just not work if the political structure of the EU is breaking up.”

EU In Disintegration Mode (Martin Armstrong)

The EU leadership is really trying to make Great Britain pay dearly for voting to exit the Community. Like the socialists in America, it’s our way or no way. The left may call the right the “deplorables” but the left are the “intolerables” who refuse to ever consider they might be wrong. The EU thinks that if they can make it so bad for Britain, nobody else will leave. They refuse to examine why there is rising discontent within Europe. They refuse to let go of this dream of a federalized Europe to eradicate national identities along with sovereign rights. [..] Britain is not willing to surrender all domestic law to that of the EU. Indeed, EU law is no longer to be applied in Britain. Here we have the EU demanding Ireland retroactively charge Apple taxes simply because their tax rate is less that the highest EU member.

That is surrendering everything sovereign to Brussels. Laws are only to be decided by the British parliament – not Brussels. Jurisprudence is a matter for the British courts not the European Court. Britain is to leave the EU internal market and the EU Customs Union and seeks a free trade agreement to be concluded between the EU and Great Britain. The EU seeks to punish Britain for rejecting its dream. The EU forgets that Trump is now in and a trade deal with Britain will no longer be at the back of the queue as was the case under Obama. Free movement of people, together with the free movement of goods, free movement of services and the free movement of capital, are the four fundamental freedoms which are regarded as the foundation of the EU. The free movement of persons justifies the right of all EU citizens to settle in the Union and to accept work. However, this has not worked as smoothly as presumed.

The cost of living is significantly different throughout the EU. Eastern Europeans, mainly from Poland, have infiltrated Britain working for less money creating competition for domestic workers while foreign companies use cheaper labor in the East to undercut domestic companies on their home-turf. As the economy turns down and deflation prevails, the threat of foreign jobs is being addressed throughout Europe. Add to this the refugee crisis and you have a powder keg throughout Europe waiting to go off. In view of the high unemployment in almost all countries, domestic citizens have ALWAYS turned against foreign workers as the easy scapegoats for the economic decline. This only merges with the high taxes reducing disposable income.

The EU leaders [..] have no clear statement to challenge what is going on. The regulatory nightmare and outright rage that is rising among the people is simply ignored by Brussels. The legal uncertainty with the British exit on the banking system is something nobody even wants to speculate about. How do bail-ins work in Europe if abandoned in Britain? So while the EU thinks by punishing Britain they will discourage others from leaving, they are seriously mistaken. The dream of the EU is dead. It should have remained just a trade union – that was it. What the Trump Administration is clueless about is the ability of the EU to hold it together, they fail to grasp that talking the dollar down will just not work if the political structure of the EU is breaking up.

Read more …

All that’s left is emptiness.

Eurozone, IMF Agree On A Common Stance On Greece (R.)

Euro zone lenders and the International Monetary Fund have reached agreed between themselves to present a common stance to Greece later on Friday in talks on reforms and the fiscal path Athens must take, euro zone officials said. Such a united stance would be a breakthrough because the two groups have differed for months on the size of the primary surplus Greece should reach in 2018 and maintain for years later as well as the issue of debt relief. Those differences have hindered efforts to unlock further funding for Greece under its latest euro zone bailout program. “There is agreement to present a united front to the Greeks,” a senior euro zone official said, adding that the outcome of Friday’s meeting with the Greeks was still unclear and it was unclear if Athens would accept the proposals. “What comes out of it, we will see,” the official said. Financial markets took heart from the news, however.

Greece’s two-year bond yield fell almost 50 basis points to 9.55%. It hit the 10% mark on Thursday as worries about the bailout drove away buyers. The chairman of euro zone finance ministers, Jeroen Dijsselbloem, said in The Hague that Friday’s meeting, in which Greek Finance Minister Euclid Tsakalotos will take part, was to discuss the size of Greece’s primary surplus. The euro zone wants Greece to reach a primary surplus – which excludes interest repayments on debt – of 3.5% of GDP and keep it there for many years. But the IMF believes that with reforms in place now Greece will reach only 1.5% next year and in the following years and has therefore been pushing for Athens to legislate new measures that would safeguard the agreed euro zone targets. Officials said the lenders would ask Greece to take €1.8 billion worth of new measures until 2018 and another €1.8 billion after 2018, focused on broadening the tax base and on pension cutbacks.

Read more …

What a surprise.

Greek Bailout Talks Set to Drag Past February Amid Standoff (BBG)

Greece probably won’t complete its bailout review by the time the euro area’s finance ministers next meet, on Feb. 20, setting the stage for potentially thorny negotiations in the midst of next month’s bitter electoral campaign in the Netherlands. “We will take stock of the further progress of the second review during the next Eurogroup,” Dutch Finance Minister Jeroen Dijsselbloem said in a statement after a meeting with his Greek counterpart, Euclid Tsakalotos, in Brussels on Friday. “There is a clear understanding that a timely finalization of the second review is in everybody’s interest,” Dijsselbloem said after the meeting, in which representatives of creditor institutions also participated.

Greece is locked in talks with the European Commission, the ECB, the European Stability Mechanism and the IMF over the conditions attached to its latest bailout. During Friday’s meeting, bailout auditors asked the government to legislate additional fiscal cuts equal to about 2% of GDP if the country fails to meet certain budget targets, a person familiar with the matter said after the talks. These contingent measures are the basis for further discussions, the person said, asking not to be named as the matter is sensitive. While progress was made in the meeting, unreasonable demands from the IMF make a resumption of staff-level talks difficult, a Greek government official said in a text message, asking not to be named in line with policy.

The Greek government has been resisting calls to preemptively legislate contingent belt-tightening for 2018 and beyond, arguing that measures already in place should suffice to meet an agreed goal for a budget surplus – before interest payments – equal to 3.5% of GDP. Among the measures the IMF is demanding is pension cuts and a lowering of the threshold at which income tax is paid. Both are red lines the government says it’s not willing to cross. “Although we expect that the Greek government will implement the required measures, the risk of early elections is increasing given the rising political cost to the government and its slim majority in the parliament,” Moody’s analyst Kathrin Muehlbronner said. “Early elections might bring a new and more reform-minded conservative government, but Greece’s economy would be hit again by prolonged uncertainty, after having just started to record positive growth.”

Read more …

This must be the dumbest thing I’ve heard in a long time. And that’s saying something these days. The UBI trial started just weeks ago, and they already know it will fail?

Universal Basic Income ‘Useless’, Says Finland’s Biggest Union (Ind.)

Finland’s basic income experiment is unworkable, uneconomical and ultimately useless. Plus, it will only encourage some people to work less. That’s not the view of a hard core Thatcherite, but of the country’s biggest trade union. The labour group says the results of the two-year pilot program will fail to sway its opposition to a welfare-policy idea that’s gaining traction among those looking for an alternative in the post-industrial age. “We think it takes social policy in the wrong direction,” said Ilkka Kaukoranta, chief economist of the Central Organisation of Finnish Trade Unions (SAK), which has nearly 1 million members. Since January, a group of unemployed Finns aged between 25 and 58 have been receiving a stipend of €560 per month. The amount isn’t means-tested and is paid regardless of whether the recipient finds a job, starts a business or returns to school.

Popular in the 1960s, the idea of a guaranteed minimum income for everyone is gaining more proponents again amid resurgent populism. French Socialist candidate Benoit Hamon has made it a policy platform in his presidential campaign. A universal — or unconditional — basic income (UBI), which would replace means-tested welfare payments, has its share of supporters on both the left and the right of the political spectrum. Advocates say it eliminates poverty traps and redistributes income while empowering the individual and reducing paperwork. In Finland, which like other Nordic nations is seen as a trendsetter when it comes to the welfare state, the idea is being explored by a center-right government headed by a former businessman and self-made millionaire.

While limited in scope (it’s conditional on the beneficiary having received some form of unemployment support in November 2016) and size (it’s based on a randomly-selected sample of 2,000 jobless people), the Finnish trial may help answer questions like: “Does it work”? “Is it worth it”? And the most fundamental of all: “Does it incite laboriousness or laziness?”

Read more …

“Speak not because it is safe, but because it is right.”

Snowden Claims Report Russia May ‘Gift’ Him To Trump Proves He’s No Spy (G.)

Whistleblower Edward Snowden has seized on a report that Russia is considering sending him back to the US as a “gift” to Donald Trump, saying that the story vindicates him of charges that he is a spy. “Finally: irrefutable evidence that I never cooperated with Russian intel,” he said on Twitter. “No country trades away spies, as the rest would fear they’re next.” Snowden was responding to a report by NBC which stated that US intelligence had collected information that Russia wanted to hand Snowden over in order to “curry favor” with Trump, who has said that the former NSA contractor is a “traitor” and a “spy” who deserves to be executed. The report – based on two sources in the intelligence community – said the intelligence had been gathered since Trump’s inauguration.

Snowden’s ACLU lawyer, Ben Wizner, told NBC News he was unaware of any plan to return his client to the US. “Team Snowden has received no such signals and has no new reason for concern,” Wizner said. Russia granted Snowden asylum in 2013 and a three-year residency in 2014. Snowden has been living in exile in Moscow, facing charges in the US including violations of the US Espionage Act for leaking documents about secret mass surveillance programs. Speaking at a GOP candidate debate in March 2016, Trump said of Snowden: “I said he was a spy and we should get him back. And if Russia respected our country, they would have sent him back immediately, but he was a spy. It didn’t take me a long time to figure that one out.” The Kremlin publicly dismissed these claims.

Snowden offered a longer explanation of his feelings of vindication when he was interviewed by Katie Couric in December 2016, when rumours of a Russian handover first started circulating. He described the suggestion as vindication that he was“independent”. He added: “The fact that I’ve always worked on behalf of the United States and the fact that Russia doesn’t own me. In fact the Russian government may see me as a sort of liability.” Snowden suggested that a reason why Russia might want to return him was his recent criticism of the Kremlin’s human rights record and his suggestions that its officials had hacked US security networks. Previously Snowden has said that Moscow had “gone very far, in ways that are completely unnecessary, costly and corrosive to individual and collective rights” in monitoring citizens online.

When Couric asked if Snowden would mind being extradited, he replied: “That would obviously be something that would be a threat to my liberty and to my life. “But what I’m saying here is you can’t have it both ways. You can’t say this guy’s a bad guy – a Russian tool or something like that – at the same time you say he’s going to be traded away.” After reiterating his sense of vindication on Friday, Snowden posted again to Twitter: “Speak not because it is safe, but because it is right.”

Read more …

Incredible.

‘We Are Silently Dying’: Refugees In Greek Camp Slip Into Despair (MEE)

Poor living conditions, a sudden spate of deaths and a “complete loss of hope” are exacerbating mental health issues and leading to suicide attempts and self-harm in the Moria refugee camp on the Greek island of Lesvos, NGOs and refugees have warned. “More and more what we are seeing is people with severe depression linked to the conditions in which they are in and to the complete loss of hope,” said Louise Roland-Gosselin, an advocacy manager for the medical NGO, Doctors Without Borders (MSF). “[Refugees] in Moria are absolutely crushed and we hear more and more about how people are self-mutilating, how they want to commit suicide and we are aware of cases of suicide and attempted suicide, not only on Lesbos but also on other islands,” she added.

[..] For many of the camp’s residents the long and backlogged process of applying for asylum and the lack of activities in the camp has heightened their despair. “It’s still quite a depressing sight,” explained Roland-Gosselin. “You still have hundreds of people who are sleeping in tents, there is little access to water, hygiene conditions are not acceptable, there’s still hundreds of people without heating and they have absolutely no activity, they have nothing to do all day. So it’s an incredibly depressing place.” Some are turning to self-harm as a result of the situation. Cutting is common in the camp according to refugees MEE spoke to. “People here die inside, so when they die inside they either hurt someone else or they hurt themselves, that’s why they do it, to get the pain out. So they cut themselves. I’ve seen it happen to my friend. He’d cut himself, we’d bandage his arm and then he’d do it again the second day,” explained al-Anny.

Read more …

Jan 142017
 
 January 14, 2017  Posted by at 9:53 am Finance Tagged with: , , , , , , , ,  2 Responses »
Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInShare on TumblrFlattr the authorDigg thisShare on RedditPin on PinterestShare on StumbleUponEmail this to someone


Arnold Genthe 17th century Iglesia el Carmen, Antigua, Guatemala 1915


Investors Are Bracing For A Massive Stock-Market Selloff (MW)
Trump Suggests He May Drop Russia Sanctions If Moscow ‘Is Helpful’ (G.)
Tucker Carlson and Glenn Greenwald Discuss Deep State War Vs. Trump (ZPN)
As VW Settles, Probes Open Into Fiat, Renault Emissions Test Cheating (BBG)
Senior VW Managers Warned Not To Travel To US (R.)
Tulsi (Midweek)
Generate Your Own Personalized Insulting Trump Tweets (TG)
Deutsche Bank Rejects Claims of ‘Economic Terror’ in Turkey (BBG)
Greek Supreme Court Rules Against Extradition of Turkish Officers (GR)
UNCHR Calls On Greece To Fix ‘Dire’ Situation For Migrants (Kath.)
Refugees, Migrants Dying Of Cold, ‘Dire’ Situation In Greece (R.)
Woman Dies From Superbug Resistant To All Available Antibiotics In US (CBS)

 

 

Trump volatility, sort of like an aftertaste of the Trump effect.

Investors Are Bracing For A Massive Stock-Market Selloff (MW)

If options traders are correct, stocks are in for a wild ride in February. Demand for one-month call options tied to the CBOE Volatility Index, a popular gauge of stock-market volatility, has spiked in the past week, a sign that some are bracing for a sharp downturn following the inauguration of President-elect Donald Trump. In that time, investors have purchased 250,000 VIX call options with a strike price at 21, and another 100,000 with the strike at 22, according to Brian Bier, head of sales and trading at Macro Risk Advisors, an options brokerage. The options cost roughly 49 cents per contract, Bier said. By comparison, the CBOE Volatility Index was at 11.16 in midday trading on Friday as the Dow Jones Industrial Average and the S&P 500 were on track to record modest daily gains. It would take a massive selloff to make these options profitable, Bier said.

Call options represent bets that the level or price of a given asset or index will rise during a given time—in this case, the period between Friday and Feb. 15, when these options expire. Investors frequently use VIX futures and options as a hedge against volatility. That way, if stocks tank, they can offset some of those losses with the profits from their options trades. “Even in the current low volatility environment, we’ve seen a lot of people still looking at the VIX as a hedge,” Bier said. Since the beginning of the year, stock-market volatility has been relatively subdued despite increasing uncertainty surrounding the future direction of fiscal and monetary policy in the U.S. The Daily Shot, a popular market newsletter, illustrates this divergence in the chart below.

Read more …

The right thing to say.

Trump Suggests He May Drop Russia Sanctions If Moscow ‘Is Helpful’ (G.)

Donald Trump has suggested he might drop sanctions against Russia and that the communist party rulers in Beijing needed to show good faith on currency and trade practices before he committed to a “One China” policy on Taiwan. In fresh signs that the US president-elect is prepared to reshape longstanding Washington foreign policy, he told the Wall Street Journal that he would keep sanctions against Russia in place “at least for a period of time”. But he added: “If you get along and if Russia is really helping us, why would anybody have sanctions if somebody’s doing some really great things?” Trump’s policy towards Russia is the subject of intense interest in Washington amid a Senate inquiry into allegations that the Kremlin ordered a hacking operation against the Democratic party to help the billionaire politician win the November election.

Trump – who has praised Vladimir Putin for being “very smart” – said he was willing to meet the Russian president in the months after he moves into the White House following his January 20 inauguration. “I understand that they would like to meet, and that’s absolutely fine with me,” he said. Controversy also surrounds the Trump administrations’s attitude towards China, with soon-to-be secretary of state Rex Tillerson warning Beijing this week that China would “not be allowed access” to its artificial islands in the South China Sea. Asked if he supported the “One China” policy on Taiwan that has underpinned US relations with Beijing for decades, Trump said: “Everything is under negotiation including ‘One China’,” the Journal reported.

Read more …

Who could have predicted a year ago that the Democrats would fall in love with the CIA, and Tucker and Glenn Greenwald would become friends?

Tucker Carlson and Glenn Greenwald Discuss Deep State War Vs. Trump (ZPN)

Journalist Glenn Greenwald, who is not a fan of President-elect Trump, appeared on Tucker Carlson tonight to discuss the dangerous ongoing effort among powerful anti-Trump factions within the US Government’s “Deep State,” who have collaborated with members of the Democratic Party and the traditionally liberal media to inflict maximum damage on the incoming President. Recall Senate Minority Leader Chuck Schumer’s ominous “six ways from Sunday” comment from 10 days ago. Greenwald, an accomplished litigator, journalist, and author, does a masterful job illustrating the players, motives, and potential fallout from this dangerous effort within the US Government’s intelligence apparatus. Greenwald goes deep, discussing how Trump’s election ruined the plan for regime change in Syria, specifically mentioning, among other things, that the deep state was waiting for Obama to leave office before executing their plan:

“The number one foreign policy priority of the CIA over the last four to five years has been the proxy war they’re waging in Syria to remove Bashar Al Assad – and Hillary Clinton was quite critical of Obama for constraining them. She wanted to escalate that war to unleash the CIA, to impose a no-fly zone in Syria to confront Russia, whereas Trump took the exact opposite position. He said we have no business in Syria trying to change the government, we ought to let the Russia and Assad go free and killing ISIS and Al Quaeda and whoever else they want to kill. He [Trump] was a threat to the CIA’s primary institutional priority of regime change in Syria.

Beyond that, Clinton wanted a much more confrontational and belligerent posture towards Moscow, which the CIA has been acrimonious with for decades, whereas Trump wanted better relations. They viewed Trump as a threat to their institutional pre-eminence to their ability to get their agenda imposed on Washington. What you’re seeing is actually quite dangerous. There really is at this point obvious open warefare between this un-elected, but very powerful faction that resides in Washington and sees Presidents come and go – on the one hand, and the person that the American democracy elected to be elected on the other. There’s clearly extreme conflict and subversion taking place.”

Read more …

[Fiat] CEO Sergio Marchionne called the allegations “unadulterated hogwash.”

I said when this broke in late 2015 that it was unpossible that VW’s competitors would not have known. Nobody had succeeded in making ‘clean’ engines’. Then VW claims it has. So the others go out, buy a VW car and take it completely apart, including software. They knew. Simple as that. And some will have used that knowledge.

As VW Settles, Probes Open Into Fiat, Renault Emissions Test Cheating (BBG)

Pressure weighing on the global auto industry for more than a year finally appeared to ease on Wednesday as Volkswagen agreed to $4.3 billion in fines for cheating on emissions tests, largely putting the scandal to rest. Less than a day later, the outlook darkened again as Renault and Fiat Chrysler were hit with similar allegations of violating clean-air regulations. Paris prosecutors, who raided Renault a year ago in an initial emissions investigation, opened a probe into the automaker on Thursday. About the same time, the U.S. Environmental Protection Agency accused Fiat Chrysler of installing software in 104,000 Jeep Grand Cherokees and Ram 1500 pickups that allowed them to exceed pollution limits on the road. The Justice Department also is investigating Fiat Chrysler over its diesel emissions, according to people familiar with the matter, Bloomberg reported Friday.

Both companies denied using software like Volkswagen’s, which was designed to lower emissions to legal limits when it senses the car is being tested and then easing pollution controls on the road to improve performance. Nonetheless, the prospect of a fight with authorities sent shares of the two automakers tumbling. Fiat fell 16% on Thursday before clawing back some of those losses today after CEO Sergio Marchionne called the allegations “unadulterated hogwash.” Renault lost as much as 6% in Paris trading Friday morning, its sharpest drop since June, after word of the probe filtered out. The shares finished the day down 3.2%.

[..] “There will be many more probes,” said Matthias Holweg, a management professor at Oxford University’s Said Business School. “The scope for manipulation is very present for every car company.” Renault, whose biggest shareholder is the French government with a 20% stake, says it hasn’t received any official notification about the latest developments in the probe, which French prosecutors announced in a brief statement on Friday. The company insists its vehicles comply with French and European Union legislation and aren’t equipped with software to cheat on emissions.

Read more …

There must be a lot of data on them then.

Senior VW Managers Warned Not To Travel To US (R.)

Senior Volkswagen managers have been warned not to travel to the United States, legal and company sources told Reuters, after six current and former managers were indicted for their role in the German carmaker’s diesel test-cheating scheme. One of the six charged, Oliver Schmidt, was arrested at Miami International Airport on Saturday as he was about to fly home from holiday in Cuba. Schmidt, who is caught up in the “Dieselgate” investigation by the U.S. Department of Justice, was ordered to be charged and held without bail on Thursday pending trial. Under the constitution, German citizens can be extradited only to other European Union countries or to an international court.

But leaving Germany at all could pose a risk of being extradited to the United States from a third country. “Several Volkswagen managers have been advised not to travel to the United States,” one legal adviser to Volkswagen said on condition of anonymity because the matter is confidential. A second legal adviser said this also applied to managers who had not yet been charged with any offense in the United States. “One doesn’t need to test the limits,” the adviser said. Schmidt was among those who had been warned by lawyers working for the company not to travel to the United States, one of the legal sources said.

Read more …

I’m still hoping she takes a job with Trump. If only as an antidote to all the hysteria emanating from Washington.

Tulsi (Midweek)

Tulsi Gabbard has had a banner year. She resigned as vice chairwoman of the Democratic National Committee, broke ranks with her colleagues in Hawaii’s congressional delegation by throwing her support to Bernie Sanders rather than Hillary Clinton, drew the largest applause at the Hawaii Democratic Party Convention, and entered the national spotlight by putting Sanders’ name in nomination at the Democratic National Convention in August. But Gabbard wasn’t done. Following Clinton’s loss to Donald Trump in the last half-century’s most vile campaign, she was invited to Trump Tower to meet with the president-elect. Worse in the eyes of some of the bluest of blue Democrats, she accepted the invitation. Gabbard offers no apologies, starting with the Trump meeting.

“He invited me to talk about Syria,” she says. “I’ve been focused on Syria for a long time. It’s a counterproductive regime-change war. “We had an hour-long, very substantive discussion about Syria and the Middle East. On some things we seemed to agree, on others we didn’t. I think the issue provides an opportunity for bipartisanship.” Nor does Gabbard have second thoughts about her support for Sanders. “I don’t make decisions based on political expediency,” she insists. “I supported him because of his positions on the issues, particularly on foreign policy. He opposed destructive regime-change wars, like Iraq and Syria. He called for Wall Street reform, reinstating the Glass-Steagall Act. I thought he was right on trade, opposing the Pacific Partnership that, like NAFTA, undermines our sovereignty.”

Nor to those who feel that, as a woman, she should have been supporting Clinton: “I’m offended that I must think with my gender regarding the candidacy of Hillary Clinton for president. I’m interested in the issues.” For Gabbard, a major in the Hawaii National Guard and veteran of two deployments to the Middle East, “issues of war and peace can’t be dealt with like other issues. I’ve seen firsthand the cost of war, the deaths of fellow soldiers — the billions of dollars spent on regime-change wars that could have been used for our own domestic needs. “That’s why I supported Bernie Sanders. That’s why I took the meeting with Trump. I wanted to share my views on these subjects, to get to him before the neoconservative voices get behind another regime-change war.”

Read more …

Some things in life are inevitable.

Generate Your Own Personalized Insulting Trump Tweets (TG)

Have Trump insult your friends!

Read more …

The Turkish lira is getting hammered. Erdogan needs scapegoats.

Deutsche Bank Rejects Claims of ‘Economic Terror’ in Turkey (BBG)

Deutsche Bank’s Turkish unit rejected claims by a pro-government newspaper that it’s plotting to undermine the economy, and said it’s “unacceptable” for the lender’s name to be associated with terrorism. The daily Yeni Safak on Thursday reported that Deutsche Bank and other German institutions were attempting “economic terror” against Turkey by recalling loans to companies before their their due dates. It didn’t identify the debtors or the other German institutions. “Claims in the story about calling loans before their maturity and conducting operations in coordination with other institutions are totally groundless,” the lender’s Istanbul-based business said in an e-mailed statement Friday. Deutsche Bank hadn’t been approached for comment before the publication of the article, it said.

President Recep Tayyip Erdogan and his aides often invoke a conspiracy against Turkey by outside powers when the lira declines, saying other nations are jealous of the country’s economic growth under his leadership. On Thursday, Erdogan accused Turkey’s enemies of speculating in the lira and called on Turks to “thwart these games” by selling their holdings in other currencies. Deutsche Bank, which has been in Turkey since 1987, employs 143 people at its Turkish unit, which posted net income of 72.5 million lira ($19.2 million) at the end of 2015, according to its annual report. It’s not the first time that Deutsche Bank has attracted the fury of the Turkish press. In January 2014, the German lender denied local reports that it deliberately drove down shares of a Turkish state-run lender that had been implicated in a corruption scandal.

Deutsche Bank said most of the shares it processed in that episode were owned by its clients, and it wasn’t trading sufficient volumes to affect the company’s share price. More recently, the Frankfurt-based institution figured in a different way in government rhetoric. At the height of the bank’s share slide and capital concerns last September, Yigit Bulut, a chief adviser to Erdogan, said Turkey should consider buying Deutsche Bank. “Some very good companies in the EU are going to fall into trouble and we need to be ready to buy a controlling stake in them,” Bulut wrote on Twitter. “Wouldn’t you be happy to make Germany’s biggest bank into a Turkish Bank!!”

Read more …

How to make friends with Erdogan. Politicians can still overrule this, but that’s a slippery slope.

Greek Supreme Court Rules Against Extradition of Turkish Officers (GR)

Supreme Court prosecutor Nikos Pantelis on Friday suggested that the remaining four Turkish army officers who sought asylum in Greece should not be extradited to Turkey. The four Turkish military men are part of a group of eight who fled to Greece after the July 15 failed coup attempt in the neighboring country and request asylum. Earlier in the week, the Supreme Court also ruled against the extradition of the other four. Nikos Pantelis cited the risk of torture and the prospect of an unfair trial in Turkey as the key reasons behind his recommendation that Greek authorities refuse Ankara’s extradition request. Earlier this week, in two separate sessions at the Supreme Court, two other prosecutors also opposed extradition for the other four men, citing the same concerns.

Read more …

Question: what is the UNCHR doing to help? Who got paid to winterize the camps but didn’t deliver?

UNCHR Calls On Greece To Fix ‘Dire’ Situation For Migrants (Kath.)

Governments along the Western Balkan route into the European Union must do more to help migrants and refugees who are dying in the cold winter weather rather than just violently push them back from the border, the UN Refugee Agency (UNHCR) said on Friday, adding that the “situation in Greece is dire.” “Children are particularly prone to respiratory illnesses at a time like this,” said UNICEF spokesperson Sarah Crowe at a UN briefing in Geneva, while the UNHCR called for the transfer of some 1,000 people, including children, who are living outdoors in tents with no heating on the island of Samos to shelters on the Greek mainland.

Meanwhile, locals on the island of Lesvos are reportedly dismayed by the presence of the Lesvos, a navy vessel which has become a temporary shelter for just 40 asylum seekers. In a letter to Migration Policy Minister Yiannis Mouzalas, the island’s mayor, Spyros Galinos, called for the transfer of a sizable number of asylum seekers from camps on Lesvos in order to “finally decongest the island.” Galinos accused Mouzalas of transforming the port into a reception center and slammed what he described as the minister’s failed policies which have had “tragic consequences for the island.” Despite the presence of the vessel, migrants at the Moria camp are refusing to move there as they prefer to remain close to the nearby Asylum Service to get information and updates on their applications.

Read more …

The deaths of 5-6 human beings have been, let’s say, underreported so far. Wonder why.

Refugees, Migrants Dying Of Cold, ‘Dire’ Situation In Greece (R.)

Refugees and migrants are dying in Europe’s cold snap and governments must do more to help them rather than pushing them back from borders and subjecting them to violence, the U.N. refugee agency UNHCR said on Friday. “Children are particularly prone to respiratory illnesses at a time like this. It’s about saving lives, not about red tape and keeping to bureaucratic arrangements,” Sarah Crowe, a spokeswoman for the U.N. children’s agency UNICEF told a U.N. briefing in Geneva. “The dire situation right now is Greece.” UNHCR spokeswoman Cecile Pouilly cited five deaths so far from cold and said about 1,000 people including children were in unheated tents and dormitories on the Greek island of Samos, calling for them to be transferred to shelter on the mainland.

Hundreds of others had been moved to better accommodation on the islands of Lesbos and Chios in the past few days. In Serbia, about 80% of the 7,300 refugees, asylum seekers and migrants are staying in heated government shelters, but 1,200 men were sleeping rough in informal sites in Belgrade. The bodies of two Iraqi men and a young Somali woman were found close to the Turkish border in Bulgaria and two Somali teenagers were hospitalized with frostbite after five days in a forest, Pouilly said. The body of a young Pakistani man was found along the same border in late December. A 20-year-old Afghan man died after crossing the Evros River on the Greece-Turkey land border at night when temperatures were below -10 degrees Celsius.

The body of a young Pakistani man was found on the Turkish side of the border with Bulgaria. “Given the harsh winter conditions, we are particularly concerned by reports that authorities in all countries along the Western Balkans route continue to push back refugees and migrants from inside their territory to neighboring countries,” Pouilly said. Some refugees and migrants said police subjected them to violence and many said their phones were confiscated or destroyed, preventing them from calling for help, she said. “Some even reported items of clothing being confiscated thus further exposing them to the harsh winter conditions,” she said. “These practices are simply unacceptable and must be stopped.”

Read more …

“This is not some future, fantasized armageddon threat..”

Woman Dies From Superbug Resistant To All Available Antibiotics In US (CBS)

A Nevada woman has died from an infection resistant to all available antibiotics in the United States, public health officials report. According to the Centers for Disease Control and Prevention, the woman’s condition was deemed incurable after being tested against 26 different antibiotics. Though this isn’t the first case of pan-resistant bacteria in the U.S., at this time it is still uncommon. Still, experts note that antibiotic resistance is a growing health concern globally and call the newly reported case “a wake up call.” “This is the latest reminder that yes, antibiotic resistance is real,” Dr. James Johnson, a professor specializing in infectious diseases at the University of Minnesota Medical School, told CBS News. “This is not some future, fantasized armageddon threat that maybe will happen after our lifetime. This is now, it’s real, and it’s here.”

According to the report, the woman from Washoe County was in her 70s and had recently returned to America after an extended trip to India. She had been hospitalized there several times before being admitted to an acute care hospital in Nevada in mid-August. Doctors discovered the woman was infected with carbapenem-resistant Enterobacteriaceae (CRE), which is a family of germs that CDC director Dr. Tom Frieden has called “nightmare bacteria” due to the danger it poses for spreading antibiotic resistance. The woman had a specific type of CRE, called Klebsiella pneumoniae, which can lead to a number of illnesses, including pneumonia, blood stream infections, and meningitis. In early September, she developed septic shock and died. The authors of the report highlight the need for doctors and hospitals to ask incoming patients about recent travel and if they have been hospitalized elsewhere.

Read more …

Jan 082017
 
 January 8, 2017  Posted by at 9:35 am Finance Tagged with: , , , , , , , , ,  2 Responses »
Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInShare on TumblrFlattr the authorDigg thisShare on RedditPin on PinterestShare on StumbleUponEmail this to someone


Trump: Only ‘Fools’, ‘Stupid People’, See Good Ties With Russia as Bad (BBG)
At Home and Abroad, Obama’s Trail of Disasters (BGlobe)
Russians Ridicule US Charge That Kremlin Meddled to Help Trump (NYT)
How RT Became The Star Of CIA, FBI & NSA’s Anticlimactic ‘Big Reveal’ (McD)
No One Can Afford To Stop The New Consumer Credit Crisis (G.)
China’s Foreign Exchange Reserves Fall To Lowest Since February 2011 (R.)
The Growing Threat to Global Trade: a Currency War (Forsyth)
Fed’s Powell Urges Congress to Take Another Look at Volcker Rule (BBG)
New Policies Coming To America Could Take Weight Off Fed: Powell (R.)
Economists Want to Be Members of Donald Trump’s Team (BBG)
EU Collapse ‘No Longer Unthinkable’ – German Vice Chancellor Gabriel (R.)
Greeks’ Mental Health Suffering (Kath.)

 

 

This is Trump’s Trump Card. Stop the empty rhetoric, and stop the warfare. If he can do that, he’ll go down in history as a great president.

Trump: Only ‘Fools’, ‘Stupid People’, See Good Ties With Russia as Bad (BBG)

Facing calls to strike back at Russia for what U.S. intelligence agencies have termed Moscow’s interference with the 2016 U.S. presidential election campaign, Donald Trump instead suggested warmer relations between the two countries. The president-elect took to Twitter on Saturday to discuss the potential U.S.-Russia relationship under his administration, a day after U.S. spy chiefs briefed him on the Russian measures they said were directed by President Vladimir Putin. “Having a good relationship with Russia is a good thing, not a bad thing,” Trump said in a series of three tweets. “Only ‘stupid’ people, or fools, would think it is bad! We have enough problems around the world without yet another one.” “When I am President, Russia will respect us far more than they do now,” Trump assured his 19 million Twitter followers.

On Friday, top U.S. intelligence officials met with the president-elect at Trump Tower in New York to present evidence that Putin personally ordered cyber and disinformation attacks on the U.S. campaign. Putin developed “a clear preference” for Trump to win, the agencies said in a declassified summary of their findings. The agencies said they “assess Putin and the Russian government aspired to help President-elect Trump’s election chances when possible by discrediting Secretary Clinton and publicly contrasting her unfavorably to him,” according to the report. “All three agencies agree with this judgment. CIA and FBI have high confidence in this judgment; NSA has moderate confidence,” the report said. “Moscow will apply lessons learned from its Putin-ordered campaign aimed at the U.S. presidential election to future influence efforts worldwide, including against U.S. allies and their election processes.”

On Saturday, posts from the Twitter account of the Russian Embassy in the U.K. dismissed the report, calling it “a pathetic attempt at tainting Americans’ vote by innuendo couched in Intel new-speak.” “All accusations against Russia are based on ‘confidence’ and assumptions,” Alexey Pushkov, a member of the Russian Parliament’s upper house, said on Twitter. As Trump’s transition team did in a statement in December, Pushkov drew a parallel with the U.S. intelligence finding of the early 2000s that Iraq’s Saddam Hussein had weapons of mass destruction. The report was released shortly after intelligence chiefs briefed Trump on their findings that Russia was responsible for the hacking of Democratic Party computers and the leaking of e-mails damaging to Democratic presidential nominee Hillary Clinton. Russia has repeatedly denied the accusations.

Trump said negligence by the DNC had allowed the hacking to go ahead. “Only reason the hacking of the poorly defended DNC is discussed is that the loss by the Dems was so big that they are totally embarrassed!” Trump tweeted on Saturday. By contrast, “the Republican National Committee had strong defense!” he said — although the intelligence report said that Russia had targeted both major parties.

Read more …

I guess kudo’s are due to the Boston Globe, generally in the same false news camp as the WaPo and NYT, for publishing this.

At Home and Abroad, Obama’s Trail of Disasters (BGlobe)

As he prepares to move out of the White House, Barack Obama is understandably focused on his legacy and reputation. The president will deliver a farewell address in Chicago on Tuesday; he told his supporters in an e-mail that the speech would “celebrate the ways you’ve changed this country for the better these past eight years,” and previewed his closing argument in a series of tweets hailing “the remarkable progress” for which he hopes to be remembered. Certainly Obama has his admirers. For years he has enjoyed doting coverage in the mainstream media. Those press ovations will continue, if a spate of new or forthcoming books by journalists is any indication. Moreover, Obama is going out with better-than-average approval ratings for a departing president. So his push to depict his presidency as years of “remarkable progress” is likely to resonate with his true believers.

But there are considerably fewer of those true believers than there used to be. Most Americans long ago got over their crush on Obama, as they repeatedly demonstrated at the polls. In 2010, two years after electing him president, voters trounced Obama’s party, handing Democrats the biggest midterm losses in 72 years. Obama was reelected in 2012, but by nearly 4 million fewer votes than in his first election, making him the only president ever to win a second term with shrunken margins in both the popular and electoral vote. Two years later, with Obama imploring voters, “[My] policies are on the ballot — every single one of them,” Democrats were clobbered again. And in 2016, as he campaigned hard for Hillary Clinton, Obama was increasingly adamant that his legacy was at stake. “I’m not on this ballot,” he told campaign rallies in a frequent refrain, “but everything we’ve done these last eight years is on the ballot.” The voters heard him out, and once more turned him down.

As a political leader, Obama has been a disaster for his party. Since his inauguration in 2009, roughly 1,100 elected Democrats nationwide have been ousted by Republicans. Democrats lost their majorities in the US House and Senate. They now hold just 18 of the 50 governorships, and only 31 of the nation’s 99 state legislative chambers. After eight years under Obama, the GOP is stronger than at any time since the 1920s, and the outgoing president’s party is in tatters. Obama urged Americans to cast their votes as a thumbs-up or thumbs-down on his legacy. That’s what they did. In almost every respect, Obama leaves behind a trail of failure and disappointment.

Read more …

Yes, even the NYT lets slip a line or two about the lack of evidence in the ridiculous US intelligence ‘report’. The article should have stopped at that, but continues in a sort of Macchiavellian spirit (actually uses the term too), trying to save some face.

Russians Ridicule US Charge That Kremlin Meddled to Help Trump (NYT)

Spies are usually thought of as bystanders who quietly steal secrets in the shadows. But the Russian versions, schooled in techniques used during the Cold War against the United States, have a more ambitious goal — shaping, not just snooping on, the politics of a nation that the Soviet-era K.G.B. targeted as the “main adversary.” That at least is the conclusion of a declassified report released on Friday that outlines what America’s top intelligence agencies view as an elaborate “influence campaign” ordered by President Vladimir V. Putin of Russia aimed at skewing the outcome of the 2016 presidential race. But the absence of any concrete evidence in the report of meddling by the Kremlin was met with a storm of mockery on Saturday by Russian politicians and commentators, who took to social media to ridicule the report as a potpourri of baseless conjecture.

In a message posted on Twitter, Alexey Pushkov, a member of the defense and security committee of the upper house of the Russian Parliament, ridiculed the American report as akin to C.I.A. assertions that Iraq had weapons of mass destruction: “Mountain gave birth to a mouse: all accusations against Russia are based on ‘confidence’ and assumptions. US was sure about Hussein possessing WMD in the same way.” Margarita Simonyan, the editor in chief of RT, a state-funded television network that broadcasts in English, who is cited repeatedly in the report, posted her own message on Twitter scoffing at the American intelligence community’s accusations. “Aaa, the CIA report is out! Laughter of the year! Intro to my show from 6 years ago is the main evidence of Russia’s influence at US elections. This is not a joke!” she wrote.

Even Russians who have been critical of their government voiced dismay at the United States intelligence agencies’ account of an elaborate Russian conspiracy unsupported by solid evidence. Alexey Kovalev, a Russian journalist who has followed and frequently criticized RT, said he was aghast that the report had given so much attention to the television station. “I do have a beef with RT and their chief,” Mr. Kovalev wrote on Twitter, “But they are not your nemesis, America. Please chill.”

Read more …

And Bryan McDonald finished off what the NYT started: “..it appears that we should swallow how RT succeeded where the combined might of CNN, NBC, CBS, The WaPo and the NYT and others failed in influencing the US election.”

How RT Became The Star Of CIA, FBI & NSA’s Anticlimactic ‘Big Reveal’ (McD)

The eagerly awaited Director Of National Intelligence’s (DNI) report “Assessing Russian Activities and Intentions in Recent US Elections” didn’t need such a long winded title. They could have just called it: “We Really Don’t Like RT.” Almost every major western news outlet splashed this story. But it was probably the New York Times’ report which was the most amusing. America’s “paper of record” hailed the DNI’s homework as “damning and surprisingly detailed.” Then a few paragraphs later admitted the analysis contained no actual evidence. Thus, in a few column inches, the Gray Lady went from describing the DNI’s release as something conclusive to conceding how it was all conjecture. “The declassified report contained no information about how the agencies had collected their data or had come to their conclusions,” the reporter, one David E. Sanger, told us.

He then reached further into his bag of tricks to warn how it is “bound to be attacked by skeptics.” Yes, those skeptics. Aren’t they awful? Like, imagine not accepting an intelligence document at face value? Especially when it warns that a nuclear armed military superpower is interfering in the American democratic process, but then offers not a smidgen of proof for its assertions. Not to mention how it appears to have been put together by a group of people with barely a clue about Russia. For instance, RT progams such as “Breaking The Set” and “The Truthseeker” are mentioned in a submission supposed to be about how RT supposedly cost Hillary Clinton the US Presidential Election. But both of these programmes went off air around two years ago. And, back then, Clinton wasn’t even the Democratic Party candidate for the 2016 contest.

[..] So how bad is this report? You’d have to say on a scale of 1-10, it’d be eleven. The core message appears to be that having a point of view which is out of sync with the liberal popular media is considered a hostile act by US spooks. And it’s specifically the liberal press’ worldview they are defending here. Now, it’s up to you to judge whether this support, from state actors, is justified or not. The DNI’s submission is ostensibly the work of highly qualified intelligence experts, but everything you learn about RT comes from publicly available interviews and Tweets posted by this channel’s own people. Yet, we are supposed to believe how the best Russia brains of three agencies – the CIA, FBI and NSA – laboured to produce this stuff? That said, the latter doesn’t appear to be fully on board, offering “moderate” confidence, in contrast to the other’s “high confidence.”

Approximately a third of the document centers on RT. And it appears that we should swallow how RT succeeded where the combined might of CNN, NBC, CBS, The WaPo and the NYT and others failed in influencing the US election. Not to mention the reality where 500 US media outlets endorsed Clinton and only 25 President-elect Donald Trump. It’s time to scream: “stop the lights!” [..] The DNI’s report is beyond bad. And it’s scary to think how outgoing President Obama has stirred up a nasty diplomatic battle with Russia based on intelligence so devoid of insight and quality. There is nothing here which suggests the authors have any special savvy or insight. In fact, you could argue how a group of students would’ve assembled something of similar substance by simply reading back issues of The New York Times. But the biggest takeaway is that it’s clear how the calibre of Russia expertise in America is mediocre, if not spookily sparse. And while this report might be fodder for amusement, the actual policy implications are nothing short of dangerous.

Read more …

And that’s by no means only true for Britain.

No One Can Afford To Stop The New Consumer Credit Crisis (G.)

Consumer debt has raised its ugly head again. According to the latest figures, the total has soared back to a level last seen just before the 2008 financial crash. To the untrained eye, the dramatic increase in spending using credit cards and loans might appear to prefigure a disaster of epic proportions. Excessive consumer debt played a big part in the collapse of Northern Rock, and looking back, this landmark banking disaster appears to have been the harbinger of an even bigger catastrophe when, a year later, Lehman Brothers fell over. This is not a view shared by the Bank of England, which says it need only keep a watching brief. Its complacency is born of forecasts of the ratio between household debt and GDP made by the Office for Budget Responsibility.

At the moment, the household debt to GDP ratio is around 140%, compared with almost 170% in 2008. The OBR’s latest analysis predicts that, over the next five years, the combination of consumer and mortgage debt will rise only gradually and fall well short of its pre-crisis peak. There is nothing wrong with judging household debt as a proportion of annual national income to gauge sustainability and the likelihood that borrowers can afford to pay it back. There is nothing wrong with it as long as you assume that GDP has been evenly shared out since the crash and that the people doing the borrowing have higher incomes, thanks to the higher GDP, to cope with repayments. Except that the Bank of England knows most people’s incomes have flatlined for years. It need look no further than official figures, which make it clear that the vast majority have missed out on the gains from GDP growth.

Incomes per head have barely recovered since 2008 and are only marginally ahead. Figures put together by the TUC last year from the official annual survey of hours and earnings paint an even gloomier picture. If they are only half right, the capacity of workers on low and average pay to manage debt payments is significantly diminished. It has estimated that, nationally, workers are more than £2,000 a year worse off after inflation is taken into account than they were in 2008 and more than £4,000 worse off in London. This should tell the central bank and the Treasury that a rise to £192bn in unsecured consumer debt in November – only a little short of the £208bn peak – is most definitely a cause for concern. And it therefore makes no sense to brush aside fears about rising debt levels by pointing to higher GDP. A debt-to-GDP figure is just not that relevant when the incomes of the people taking on the debt are stagnant.

Read more …

Beijing counting down the days till january 20. It still has $3 trillion left, but 90% or so of that is not available.

China’s Foreign Exchange Reserves Fall To Lowest Since February 2011 (R.)

China’s foreign exchange reserves fell for a sixth straight month in December but by less than expected to the lowest since February 2011, as authorities stepped in to support the yuan ahead of U.S. President-elect Donald Trump’s inauguration. China’s reserves shrank by $41 billion in December, slightly less than feared but the sixth straight month of declines, data showed on Saturday, after a week in which Beijing moved aggressively to punish those betting against the currency and make it harder for money to get out of the country. Analysts had forecast a drop of $51 billion. For the year as a whole, China’s reserves fell nearly $320 billion to $3.011 trillion, on top of a record drop of $513 billion in 2015. While the $3 trillion mark is not seen as a firm “line in the sand” for Beijing, concerns are swirling in global financial markets over the speed with which the country is depleting its ammunition to defend the currency and staunch capital outflows.

Some analysts estimate it needs to retain a minimum of $2.6 trillion to $2.8 trillion under the IMF’s adequacy measures. If pressure on the yuan persists, analysts suspect China will continue to tighten the screws on outflows via administrative and regulatory means, while pouncing sporadically on short sellers in forex markets to discourage them from building up excessive bets against the currency. But if it continues to burn through reserves at a rapid rate, some strategists believe China’s leaders may have little choice but to sanction another big “one-off” devaluation like that in 2015, which would likely roil global financial markets and stoke tensions with the new Trump administration. The yuan depreciated 6.6% against the surging dollar in 2016, its biggest one-year loss since 1994, and is expected to weaken further this year if the dollar’s rally has legs.

Adding to the pressure, Trump has vowed to label China a currency manipulator on his first day in office, and has threatened to slap huge tariffs on imports of Chinese goods. That has left Chinese eager to get money out of the country, creating what some researchers describe as a potentially destructive negative feedback loop, where fears of further yuan falls spur outflows that pile fresh pressure on the currency. “For 2016 as a whole we estimate total capital outflows to have been around $710 billion,” Capital Economics’ China economist Chang Liu told Reuters in an email. Capital Economics estimated net outflows in November and December alone were $76 billion and $66 billion, respectively.

Read more …

Trump will be willing to negotiate, but there’s doesn’t seem to be much, if any, room for China to move.

The Growing Threat to Global Trade: a Currency War (Forsyth)

While Trump has talked of imposing a so-called border tax on imports or tariffs, currencies are at the nexus of trade and are the quickest means to try to influence trade flows. In that regard, he has threatened to declare China a “currency manipulator” on Day One of his administration for allegedly pushing down the yuan to gain an export advantage. The risk is that this will escalate into a currency war, with both sides attempting to gain a trade advantage, and that it ultimately ends up disrupting global trade and financial markets. As with any war, this one should be avoided at all costs. But the events of the past year suggest never say never. [..] China, of course, is central to Trump’s strategy to reduce the U.S. trade deficit.

Harris writes that this includes three actions: naming China a currency manipulator; bringing trade cases against it under the WTO and U.S. rules; and using “every lawful presidential power to remedy trade disputes if China does not stop its illegal activities, including its theft of American trade secrets.” In addition, last week the president-elect named Robert Lighthizer as U.S. trade representative, adding him to the hawkish team of Peter Navarro, director of the new National Trade Council, and Commerce Secretary-designate Wilbur Ross. While the U.S. and China may find common ground on environmental regulation in China, given the unbreathable air in Beijing and other cities, Harris thinks it’s unlikely China would concede that it is manipulating its currency.

“China is currently fighting to prevent currency weakness, selling its foreign currency reserves to offset private capital flight from the country,” he continues. China’s reserves have fallen by about $1 trillion, to just over $3 trillion as of November; the latest data, due this weekend, will be closely watched to see how much Beijing’s cache has been depleted. That said, “some academics in China are suggesting the country should respond to being declared a ‘manipulator’ by letting the currency float, triggering even more weakness,” adds Harris. Other observers see such a course as dangerous. Danielle DiMartino Booth, writing in her latest Money Strong missive, quotes Leland Miller, president of China Beige Book, a private research group, that the last thing Beijing wants is a floating yuan.

“It would hurt them much more than anyone else and be greeted with massive retribution from every corner of the world. There would be countervailing devaluations and would cause global contagion,” he contends. “It would also be a major blow to [President] Xi’s credibility during a politically sensitive year, since he’s pledged to not float the currency. And it would NOT stanch outflows; all it would do is exacerbate them.”

Read more …

The independent Fed talking politics?!

Fed’s Powell Urges Congress to Take Another Look at Volcker Rule (BBG)

Federal Reserve Governor Jerome Powell urged Congress to rewrite the Volcker Rule that restricts proprietary trading, while urging “a high degree of vigilance” against the buildup of financial risks amid improving U.S. growth. “What the current law and rule do is effectively force you to look into the mind and heart of every trader on every trade to see what the intent is,” Powell said Saturday at the American Finance Association meeting in Chicago. “Is it propriety trading or something else? If that is the test you set yourself, you are going to wind up with tremendous expense and burden.” Powell’s comments compare to Fed Chair Janet Yellen, who has supported the sweeping bank rules of the 2010 Dodd-Frank Act in the wake of the global financial crisis. President-elect Donald Trump has vowed to dismantle Dodd-Frank. The Volcker Rule restricts banks with taxpayer-backed deposits from making certain types of speculative “proprietary” trades.

“We don’t want the largest financial institutions to be seriously engaged in propriety trading,” Powell said. “We do want them to be able to hedge their positions and create markets.” Powell said that the Volcker Rule, as enacted by U.S. lawmakers, doesn’t achieve that goal. “I feel the Congress should take another look at it.” In the text of his remarks, Powell urged more monitoring of financial risks following a period of record low interest rates, citing commercial real estate as one area of concern. “More recently, with inflation under control, overheating has shown up in the form of financial excess,” Powell said. “The current extended period of very low nominal rates calls for a high degree of vigilance against the buildup of risks to the stability of the financial system.”

Read more …

Is this simply the Fed trying to pass on the blame?

New Policies Coming To America Could Take Weight Off Fed: Powell (R.)

A push by Washington for more business-friendly regulation and fiscal support for the economy could improve America’s mix of policies which in recent years have relied too much on the Federal Reserve, Fed Governor Jerome Powell said. Powell, speaking on Saturday at a conference, did not mention the incoming Trump administration by name but his comments suggest some Trump policies will be welcomed by U.S. central bankers who have been urging other institutions to do more to help the economy. “We may be moving more to a more balanced policy with what sounds like more business-friendly regulation and possibly more fiscal support,” Powell told an economics conference in Chicago. President-elect Donald Trump, who takes office on Jan. 20, has promised to double America’s pace of economic growth, “rebuild” its infrastructure and slash regulatory burdens.

About half of the Fed’s 17 policymakers factored a fiscal stimulus into their economic forecasts published in December, according to minutes from the Fed’s December policy meeting. That expected stimulus has led several policymakers to say the Fed will likely raise rates more quickly, but Powell said new policies could also ease the Fed’s burden. “Monetary policy (might be) able to hand it off and I think that’s a healthier thing,” he said. “We may be moving to a more balanced policy mix.” Following a Congress-enacted fiscal stimulus during and immediately after the 2007-09 recession, the Fed in recent years has been widely seen as the economic authority working the hardest to help the economy. But throughout 2016, Fed policymakers worried publicly that the U.S. economy was stuck in a low growth path and central banking tools could do little to fix this. Central bankers urged Congress and the U.S. president to pass laws that would help make U.S. businesses and workers more productive.

Read more …

“..it might be more of a matter of Trump not wanting many economists in his administration..”

Economists Want to Be Members of Donald Trump’s Team (BBG)

Economists aren’t shying away from joining Donald Trump’s administration and would be willing to pitch in if asked, according to former economic policy makers now in academia. “The president will be able to get any economist he asked for,” said Glenn Hubbard, who served President George W. Bush as chairman of his Council of Economic Advisers from 2001 to 2003 and is now dean of Columbia University’s Graduate School of Business. Hubbard spoke Saturday in Chicago at the American Economic Association annual conference. A delay in naming a new CEA chair and reports that the position might go to CNBC commentator Lawrence Kudlow spawned speculation that leading academic economists were reluctant to join a team headed by an avowed skeptic of free trade.

“I don’t see that,” said John Taylor, an economics professor who served in the Bush administration as under secretary of Treasury for international affairs and now teaches at Stanford University. “It’s a pretty exciting time and lots of things are going on,” said Taylor, who worked in three other administrations as well. Alan Krueger, who led the CEA in the White House of President Barack Obama from 2011 to 2013 before passing the torch to incumbent Jason Furman, suggested that it might be more of a matter of Trump not wanting many economists in his administration, rather than the other way around. “I worry more about the demand side than the supply side,” said the Princeton University professor said. The audience laughed.

Read more …

Should have thought of that earlier. Because this has been evident for a very long time: Germany is the biggest beneficiary of the European community – economically and politically.” Just look at the graph I inserted at the bottom of this article.

EU Collapse ‘No Longer Unthinkable’ – German Vice Chancellor Gabriel (R.)

Germany’s insistence on austerity in the euro zone has left Europe more divided than ever and a break-up of the European Union is no longer inconceivable, German Vice Chancellor Sigmar Gabriel told Der Spiegel magazine. Gabriel, whose Social Democrats (SPD) are junior partner to Chancellor Angela Merkel’s conservatives in her ruling grand coalition, said strenuous efforts by countries like France and Italy to reduce their fiscal deficits came with political risks. “I once asked the chancellor, what would be more costly for Germany: for France to be allowed to have half a percentage point more deficit, or for Marine Le Pen to become president?” he said, referring to the leader of the far-right National Front. “Until today, she still owes me an answer,” added Gabriel, whose SPD favors a greater focus on investment while Merkel’s conservatives put more emphasis on fiscal discipline as a foundation for economic prosperity.

The SPD is expected to choose Gabriel, their long-standing chairman who is also economy minister, to run against Merkel for chancellor in September’s federal election, senior party sources said on Thursday. Asked if he really believed he could win more votes by transferring more German money to other EU countries, Gabriel replied: “I know that this discussion is extremely unpopular. But I also know about the state of the EU. It is no longer unthinkable that it breaks apart,” he said in the interview, published on Saturday. “Should that happen, our children and grandchildren would curse us,” he added. “Because Germany is the biggest beneficiary of the European community – economically and politically.”

Read more …

Thanks, Angela.

Greeks’ Mental Health Suffering (Kath.)

More than half of Greeks complain of mental health problems, with stress, insecurity and disappointment among the issues most commonly cited, according to the results of a nationwide survey by the National School of Public Health, known by its acronym ESDY. Over half of the 2,005 adults polled (53.9%) said their mental health had not been good over the past month due to stress, depression or other emotional problems. A quarter (24.8%) of respondents, identified poor physical or mental health as causing problems in their daily lives. A total of 15% said they felt insecurity, anxiety and fear, with 14% citing anger and frustration, 9.7% complaining of depression and sadness, 8.2% of stress and 44.6% citing all these ailments.

Four in 10 (42.6%) said they only enjoyed their lives “moderately” and one in 10 said they thought their lives had little or no meaning. The findings came as official figures showed that cases of depression rose from 2.6% of the population in 2008 to 4.7% in 2015. Responding to broader questions about their health and lifestyle, 20% of those polled said their diets had been insufficient over the past month due to low finances. According to health sector experts, however, the repercussions of the economic crisis on citizens’ health are less severe than many had feared. In comments to Kathimerini, Yiannis Kyriopoulos, a professor of health economics at the ESDY, said the findings of the study “simply observe a slowdown in the improvement of health indicators.”

Read more …

Jan 012017
 
 January 1, 2017  Posted by at 11:29 am Finance Tagged with: , , , , , , , , , ,  3 Responses »
Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInShare on TumblrFlattr the authorDigg thisShare on RedditPin on PinterestShare on StumbleUponEmail this to someone


Claude Monet The Japanese Bridge 7 1924


Trump Leaves Open Possible Taiwan Meet, Questions Russia Hacking (R.)
Was Claim by DHS and FBI About Russian Hacking Fake News? (Spring)
Is the “Trump Trade” Already Unwinding? (WS)
Senator McCain Says US Stands With Ukraine Against Russia (R.)
Here’s How Much Each EU Nation Puts In And Takes Out Of The EU Budget (BI)
Universal Basic Income Trials Being Considered In Scotland (G.)
China’s Xi Offers Populist Message In New Year’s Eve Address (AP)
Narendra Modi Just Dug Himself a Great Big Hole (Varadarajan)
Turkish Policy Sets Syria On New Path (Sayigh)
Humanity May Self-Destruct, But The Universe Can Cope Perfectly Without Us (G.)

 

 

Trump’s been -partially- briefed: ”I also know things that other people don’t know so we cannot be sure..”. And he’s obviously not convinced, to say the least.

Trump Leaves Open Possible Taiwan Meet, Questions Russia Hacking (R.)

U.S. President-elect Donald Trump on Saturday left open the possibility of meeting with Taiwan’s president if she visits the United States after he is sworn in on Jan. 20 and also expressed continued skepticism over whether Russia was responsible for computer hacks of Democratic Party officials. In remarks to reporters upon entering a New Year’s Eve celebration at his Mar-a-Lago estate, Trump said, “We’ll see,” when pressed on whether he would meet Tsai Ing-wen, Taiwan’s president if she were to be in the United States at any point after he becomes president. Taiwan’s president will be in transit in Houston on Jan. 7 and again will be in transit in San Francisco on Jan. 13. Beijing bristled when Trump, shortly after his Nov. 8 victory, accepted a congratulatory telephone call from the Taiwan leader and has warned against steps that would upset the “one-China” policy China and the United States have maintained for decades.

Talk of a stop-over in the United States by the Taiwan president has further rattled Washington-Beijing relations. On another foreign policy matter, Trump warned against being quick to pin the blame on Russia for the hacking of U.S. emails. The Washington Post also reported on Friday that Moscow could be behind intrusion into a laptop owned by a Vermont electric utility. U.S. intelligence officials have said that they are confident Russia was behind the hacks, which could have played a role in Trump’s defeat over Democratic presidential candidate Hillary Clinton. “I think it’s unfair if we don’t know. It could be somebody else. I also know things that other people don’t know so we cannot be sure,” Trump said. Asked what that information included, the Republican President-elect said, “You will find out on Tuesday or Wednesday.” He did not elaborate.

Read more …

Seems to depend on who reports on it.

Was Claim by DHS and FBI About Russian Hacking Fake News? (Spring)

An important research principle is to follow the money. People around the world need to ask themselves who has the money and technical ability to be running hundreds and perhaps thousands of real servers and real IP addresses from fake corporations using fake websites in fake locations in more than 40 nations around the world? What agency has already been proven to be running mass surveillance on billions of people in more than 40 nations all around the world? Whose military cyber budget is more than 10 times larger than the cyber warfare budget of the rest of the world combined? There is certainly an elephant in the room – but it is not a Russian elephant. At a televised press conference in April 2016, former NSA agent Edward Snowden asked the Russian leader Vladimir Putin if the Russian government engaged in mass surveillance of millions of people in a manner similar to the NSA.

Putin replied that Russian law prohibited the Russian government from engaging in mass surveillance. Putin then pointed out that the Russian military budget was less than 10% of the US military budget. So even if they wanted to engage in mass surveillance, they simply did not have the money. People also need to ask themselves why the FBI/DHS chose to place their evidence in a CSV file and XML file rather than a normal document or spreadsheet. If this were real evidence, it would have been placed directly in the PDF report for everyone to read – not hidden away in a file the general public has little ability to read. Finally, for the FBI or the DHS to claim that the XML-CSV file contains evidence or even indicators of Russian hacking is simply a false statement. It is a perfect example of fake news. Any news agency promoting this claim without doing even the most basic of research that would easily confirm it is false should be listed as a fake news agency.

The real question that we should all be asking is why the DHS and FBI would destroy their reputation by posting such a fake report? Several years ago, our CIA claimed that Iraq had weapons of mass destruction. We now know that Iraq had no weapons of mass destruction – meaning that we went to war and spent over a trillion dollars on a fake report. Is this new fake report a pretext for launching a cyber war against Russia? Is it intended to justify increasing US military spending? It is hard to say what the real purpose of this fake DHS-FBI report is. But the fact that this silly list of IP addresses was the best evidence they could provide should be a strong indication that there really is no evidence of Russian hacking. Instead, it is more likely that Wikileaks is telling the truth in stating that they got the emails from a disgruntled Democratic Party insider.

Read more …

There’s so much downside there it’s scary.

Is the “Trump Trade” Already Unwinding? (WS)

The S&P 500, after having ended 2015 down 0.7%, ended 2016 up 9.5%, including a big swoon early in the year. From February 11, when it bottomed out at 1,810, it has surged 23.6%. And bonds went on a wild ride. The 10-year Treasury yield ended 2016 at 2.445% up from 2.273% at end of 2015. It hit 2.57% at peak Trump Trade, up over a full percentage point from the summer. Over the fourth quarter, the yield jumped 84 basis points, the largest quarterly jump since 1994. And prices, which move inverse to yields, clobbered bondholders. But note the decline in yield since December 20:

And stocks partied. Since the election, financials surged, bringing the gain for the year to 29.1%, the best-performing sector in the S&P 500. Goldman Sachs, whose ex-executives are now heavily represented in the Trump administration, shot up 36% since the election and 51% since the beginning of October when Trump’s victory became more than just a possibility. GS was one of the best Trump Trades out there. Alas, it too has started to peter out. GS is now down 2.5% from peak Trump-Trade, and other banks have followed. Insiders at the banks were preparing for it, it seems, because on December 9, just before bank stocks started losing ground, we found…

Mortgage rates have soared from around 3.4% for much of the summer to 4.32%, according to Freddie Mac. This is now reverberating through the housing market in multiple ways, with some people rushing to buy to lock in the rates before they go even higher, and others waiting for rates to come down and not buying, and still others being completely priced out by mortgage rates that are nearly a percentage point higher than they’d been a few months ago, and the first red flags on home sales are now cropping up:

Read more …

Oh, go away!

Senator McCain Says US Stands With Ukraine Against Russia (R.)

Republican U.S. Senator John McCain promised on Saturday continued support for Kiev in the face of aggression from Moscow, as he spent New Year’s Eve on the front line in Ukraine’s eastern conflict zone. McCain was one of a bipartisan group of 27 U.S. senators who sent a letter to President-elect Donald Trump in December, urging him to take a tough line against Russia over what they termed its “military land grab” in Ukraine. “I send the message from the American people – we are with you, your fight is our fight and we will win together,” McCain was quoted as saying by Ukrainian President Poroshenko’s press service. “In 2017 we will defeat the invaders and send them back where they came from. To Vladimir Putin – you will never defeat the Ukrainian people and deprive them of their independence and freedom,” McCain said after a visit to a military base in the southeastern town of Shyrokyne.

Trump signaled during his campaign that he might take a softer line in dealings with Moscow, repeatedly praising Russian President Putin’s leadership. Trump’s election caused jitters in Ukraine but officials in Kiev hope that the incoming president’s policies, influenced by Republican hawks and a Republican-voting Ukrainian diaspora, will be friendlier towards Ukraine than his campaign rhetoric might have suggested. Ukraine has relied on Western support and economic aid since street protests in 2014 which toppled a Kremlin-backed president and were followed by a war with pro-Russian separatists and Russia’s annexation of the Crimea peninsula from Ukraine.

Read more …

The enormous amounts going to France, Spain, Italy, Belgium are something to be very concerned about.

Here’s How Much Each EU Nation Puts In And Takes Out Of The EU Budget (BI)

One of the biggest political stories of 2016 has been Brexit and much of the debate both before and after June’s vote to leave the EU has focused around whether Britain will be financially better or worse off after leaving the EU. The “Vote Leave” campaign famously emblazoned their battle bus with a figure of £350 million, claiming that was what the UK sent to Brussels each week and that sum could be spent on the NHS instead. The figure was subsequently discredited, as it was a gross sum and didn’t take into account the fact that Britain also benefits from EU grants and funding. However, a recent House of Commons briefing paper on the UK’s funding from the EU shows that Britain does, in fact, put more into the EU budget than it takes out.

The UK has averaged around €12 billion in EU funding each year between 2011-15 but over that same period made an average net contribution of €15 billion. Britain is one of nine EU members that are net contributors to the European Union’s budget (meaning they put in more money than they take out.) Here’s the House of Commons chart showing each member states net contributions against their EU funding:EU funding House of Commons Briefing Paper The fact that Britain is a net contributor means that, in theory, the UK could stand to gain money after it leaves the EU. However, this does not account for any potential economic fluctuations as a result of Brexit — if the economy suffers then any gains from not paying into the budget could easily be wiped out by falling tax receipts.

There is also a very real possibility that the UK may have to keep paying into the EU budget if it wants to maintain access to the EU Single Market. The UK will also have to continue paying into the EU budget until it formally leaves the EU and senior European negotiators have signalled they will try and make Britain pay up to €60 billion to leave, to cover previous budget commitments, pension liabilities, and other costs. In other words, while on paper it might look like leaving the EU will give Britain more money for inward investment, Brexit could end up costing the UK just as much as EU membership — or worse, more.

Read more …

I’m all for a good basic income trial. But I’m very afraid that none of them will be adequate, and that this will be used to discredit the entire idea. And please don’t use the term universal for small scale experiments, it’s misleading.

Universal Basic Income Trials Being Considered In Scotland (G.)

Scotland looks set to be the first part of the UK to pilot a basic income for every citizen, as councils in Fife and Glasgow investigate trial schemes in 2017. The councillor Matt Kerr has been championing the idea through the ornate halls of Glasgow City Chambers, and is frank about the challenges it poses. “Like a lot of people, I was interested in the idea but never completely convinced,” he said. But working as Labour’s anti-poverty lead on the council, Kerr says that he “kept coming back to the basic income”. Kerr sees the basic income as a way of simplifying the UK’s byzantine welfare system. “But it is also about solidarity: it says that everyone is valued and the government will support you. It changes the relationship between the individual and the state.”

The concept of a universal basic income revolves around the idea of offering every individual, regardless of existing welfare benefits or earned income, a non-conditional flat-rate payment, with any income earned above that taxed progressively. The intention is to provide a basic economic platform on which people can build their lives, whether they choose to earn, learn, care or set up a business. The shadow chancellor, John McDonnell, has suggested that it is likely to appear in his party’s next manifesto, while there has been a groundswell of interest among anti-poverty groups who see it as a means of changing not only the relationship between people and the state, but between workers and increasingly insecure employment in the gig economy.

Kerr accepts that, while he is hopeful of cross-party support in Glasgow, there are “months of work ahead”, including first arranging a feasibility study in order to present a strong enough evidence base for a pilot. “But if there is ever a case to be made then you need to test it in a place like Glasgow, with the sheers numbers and levels of health inequality. If you can make it work here then it can work anywhere.”

Read more …

Now Xi is designated populist too, because he said: “On this new year, I am most concerned about the difficulties of the masses: how they eat, how they live, whether they can have a good New Year, or a good Spring Festival..” And I thought when incumbents say these things, that’s not populist. I may never understand.

China’s Xi Offers Populist Message In New Year’s Eve Address (AP)

Chinese President Xi Jinping said Saturday that his government would continue to focus on poverty alleviation at home and resolutely defending China’s territorial rights on the foreign front. Xi made the televised remarks in his annual New Year’s Eve address, in which he touted China’s scientific accomplishments, highlighting its large new radio telescope and space missions, and the country’s growing role as a leader in global affairs. Standing before a mural of the Great Wall, Xi said his administration successfully hosted a G-20 summit, pushed forward with China’s “One Belt One Road” pan-Eurasian infrastructure project and established the Asian Infrastructure Investment Bank.

China has upheld its peaceful development while resolutely defending its territorial sovereignty and maritime rights, Xi said, making a reference to an international tribunal ruling last summer against China’s claims in the contested South China Sea. “If anyone makes this an issue of question, the Chinese people will never agree!” he said, one of the few points in his 10-minute address when his voice rose noticeably. For most of his address, Xi struck a populist tone, saying he was above all concerned about the living conditions of the people and vowed that improving employment, education, housing and health care would be a responsibility that his ruling Communist Party would never shirk from. China lifted 10 million people out of poverty in 2016, Xi said.

“On this new year, I am most concerned about the difficulties of the masses: how they eat, how they live, whether they can have a good New Year, or a good Spring Festival,” Xi said, as the television broadcast cut to footage of his visits this year to impoverished rural areas. Xi also promised to shore up Communist Party discipline and “unwaveringly” maintain his anticorruption campaign against high- and low-ranking officials alike. He said that “supply-side” economic reforms were making progress and that the party would continue to push reform and rule by law during the 19th National Congress, scheduled for late 2017. “As long as the party forever stands with the people, we will be able to walk the long march of our generation,” he said.

Read more …

A Lakh is one hundred thousand. Still confusing as f**k.

Narendra Modi Just Dug Himself a Great Big Hole (Varadarajan)

It was a speech of not just shifting goalposts but vanishing playing fields, and yet Narendra Modi couldn’t resist making a rhetorical point about black money that might well prove costly for him by the time 2019 comes around. “I wish to share some information with you, which will either make you laugh, or make you angry,” he said, with a flourish half-way through his speech. This was the point where everyone expected him to reveal how many old Rs 500 and 1000 notes had become ‘worthless paper’ thanks to demonetisation but he had another number in mind: “According to information with the government, there are only 24 lakh people in India who accept that their annual income is more than 10 lakh rupees. Can we digest this? Look at the big bungalows and big cars around you… If we look at any big city, it would have lakhs of people with annual income of more than 10 lakh.”

Until then, the prime minister had sought to sweep the growing public concerns about the effects of his demonetisation decision under a fraying carpet of nationalism. But by drawing attention to a stark statistic in an attempt to provide some justification for the chaos he has unleashed in the lives of hundreds of millions of poor Indians, Modi has unwittingly laid down a new metric by which the success or failure of his supposed drive against black money must be judged: will he manage to add the “lakhs of people” who have an income of more than Rs 10 lakh to the list of those who pay income tax? If he doesn’t, then what was the point of subjecting the whole country to so much disruption and pain? Finance minister Arun Jaitley initially claimed that a certain proportion of the demonetised notes would remain outside the banking system and get extinguished, thus providing a blow to the black economy and a fiscal boost to the government.

When they realised there was unlikely to be significant extinguishing and that most of the high denomination notes in circulation would probably end up getting deposited, Modi and Jaitley claimed the income tax authorities would be able to track down the owners of black money since their funds had entered the banking system. Now that it is apparent the IT department will not find it that easy to undertake such a massive exercise – its inefficiency is the reason the list of those with official incomes of Rs 10 lakh and over is just 24 lakh to begin with and is unlikely to grow – Modi has tried to sell another bizarre idea to the public about why the cashless hardship they are putting up with is in the national interest.

Read more …

Putin is tightening his grip on Erdogan. Who held a speech yesterday proclaiming that Turkey is in the first independence war in 93 years, or something like that. But that’s strictly for domestic use.

Turkish Policy Sets Syria On New Path (Sayigh)

Turkish policy has been evolving at a quickening pace. The decision to lean on the opposition to allow thousands of its fighters to abandon the effort to lift the regime siege of eastern Aleppo in order to spearhead a Turkish-backed push against Kurdish-held areas to the north last August ensured the fall of one of the most important opposition strongholds in Syria four months later. Remaining opposition forces in the northwest have significant stockpiles of weapons and ammunition, but are wholly dependent on Turkey for further military resupply and for the flow of trade and international humanitarian assistance. Turkey has not abandoned the opposition completely, but it is clearly working to a new set of policy assumptions and objectives in Syria.

That these include a strategic decision to abandon the effort to force Assad from power is already plain. Talk of setting up a safe zone in northern Syria has never been credible, despite considerable bluster. Moscow insiders claim Turkish President Recep Tayyip Erdogan is also abandoning his categorical rejection of significant Kurdish autonomy in northern Syria, so long as he can block the same thing in Turkey. With President-Elect Donald Trump about to take office in the US, there is little reason for Turkey to expect to counter-balance Russian policy proposals on Syria. These calculations prompted Turkey to accept the fate of Aleppo – which it had long presented as a “red line” that the Assad regime should not cross – and then to broker a ceasefire with Russia immediately after its fall.

The alacrity with which the main political and military opposition groupings have announced their support for the latest ceasefire is the surest measure of the extent of the shift in Turkey’s policy and of its determination to enforce compliance, whatever the provocations from the government side. The real question, then, is not whether the latest ceasefire will hold, but how far Turkey will go in making the Syrian opposition accept what comes next, should the peace talks jointly sponsored by Russia and Turkey take place within the next month as officially scheduled. Indeed, even if the ceasefire fails or if the talks are unsuccessful – or not held at all – Turkish policy towards Syria is set on a new path.

Read more …

Destruction as a religious comfort zone. Oh well, people go for what feels good.

Humanity May Self-Destruct, But The Universe Can Cope Perfectly Without Us (G.)

In a Scandinavian hotel a few years ago, I came across a documentary I didn’t expect to watch for more than a minute or two, but at least it was in English. It was past time to go to bed, but I ended up watching the whole thing. Aftermath: Population Zero imagines that overnight humanity vanishes from the planet. You may have seen it. The immediate effects of human departure are sentimentally saddening: pets die, no longer competent to fend for themselves. Some livestock fares poorly, though other domesticated animals romp happily into the wild. Water cooling fuel rods of nuclear power plants evaporate, and you’d think that would be the end of everything – but it isn’t. Radioactivity subsides. Mankind’s monuments to itself decay, until every last skyscraper has rusted and returned to dirt.

Animals proliferate, flora thrive, forests rise. Bounty, abundance and beauty abound. Antelopes leap from wafting golden grasses. It was all very exhilarating, really. I went to sleep that night with a lightened heart. Ever since, that wafting grasses image has been a comforting touchstone. We speak often of “destroying the planet” when what we mean is destroying its habitability for humans. The humblingly immense else-ness of what is, in which our species is collectively a speck, extant for an eye blink, lets us off the hook. Global warming, Syrian civil war, domestic violence, Donald Trump? This too shall pass.

I’m not a religious person. Chances are that the universe neither treasures nor regrets us. It permits us, with a marvellous neutrality, and later it may permit artificial intelligence, humanity 2.0, or a lot more bugs instead. We can’t comprehend all that phantasmagorical stuff out there, but we also can’t kill it. That gives me hope. Although we’re a remarkably successful biological manifestation – and so is mould – our aptitude for annihilation is largely limited to wiping ourselves out. The gift of self-destruction is a minor, not to mention stupid, power, and apparently humanity’s suicide would be relatively safe, like a controlled explosion. The universe would get on perfectly well without us once we’d gone.

I strongly associate the notion of aftermath with TC Boyle’s short story Chicxulub. While relating the intimate, personal account of learning that his teenage daughter has been hit, perhaps fatally, by a car, the narrator digresses to explain the shockingly high likelihood that our planet will be hit by an asteroid large enough to extinguish our species. For the narrator, his daughter’s death and the end of the world are indistinguishable. The text is shot through with a piercing sorrow, over all our pending losses – of children, of the world we’ve made together as a race. This, too, gives me hope – that I’m not a misanthrope after all. I would miss my brother, my husband; with all our shortcomings, I would also miss the family of man. The capacity for grief, the flipside of love, consoles me as much as the detached long view of aftermath.

Read more …

Dec 182016
 
 December 18, 2016  Posted by at 9:43 am Finance Tagged with: , , , , , , , , , , ,  3 Responses »
Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInShare on TumblrFlattr the authorDigg thisShare on RedditPin on PinterestShare on StumbleUponEmail this to someone


Dorothea Lange Country store, Person County, NC Jul 1939


Here’s How Americans Spent Their Money In The Last 75 Years (MW)
Global Debt, Equity Markets Lose $1 Trillion In Value This Week (ZH)
January 2017 Earnings Is Going To Be a Bloodbath (EconMatters)
Trump Talked, the Fed Listened: Shrink the Balance Sheet, Bullard Says (WS)
Pentagon Says China to Return Drone; Trump Says They Can Keep It (BBG)
Free Cash in Finland. Must Be Jobless. (NYT)
Monte dei Paschi to Start Taking Orders for Shares on Monday (BBG)
Hillary’s Campaign The Most Incompetent In Modern History (Davis)
Just Who Is Undermining Election? Russians Or CIA? (Albuquerque Journal Ed.)
‘Shocking’ Rise in Number of Homeless Children in UK B&Bs at Christmas (G.)
Tsipras’s Spending Spree May Be Relief To Greeks But It Won’t End Crisis (G.)

 

 

The rise in spending on housing should initiate a national debate. And not just in the US. It makes you wonder about the real dimensions of the ‘housing bubble’. Is it perhaps 75 years old already?

Here’s How Americans Spent Their Money In The Last 75 Years (MW)

Housing expenses have almost always been the largest drain on American budgets, unchanged in over 70 years. Between 1941 and 2014, Americans spent money on most of the same things, with a few changes. Housing has persisted as a large area of spending for Americans, as has the food category. However, spending on food and clothing has fallen when adjusting for inflation while spending on education and health care has risen quickly. That’s according to Bureau of Labor Statistics data, adjusted for inflation and representing median spending of all Americans, charted here.


click for larger version

There is one exception to housing’s dominance, in 1941, when spending on food averaged $8,311 annually, topping the $7,537 spent on shelter that year. Interestingly, in 1941 the government included alcohol in the food spending category, which inflates the food spending data for that year. In other years, alcohol was given its own category. Americans spent the most on clothing in 1961, at an average of $4,157. In every year measured since 1961, spending on clothing fell, even when accounting for inflation. At the same time, Americans began spending more on education, transportation and health care. Spending on education has increased far more than any other category, jumping from $242 in 1941 to $1,236 in 2014. Education spending increased at a particularly fast rate between 1984 and 1994 and onward. While spending on health care increased between 1941 and 2014, overall spending dipped between 1973 and 1984, but then began rising rapidly thereafter.

Read more …

@Boomfinance: “Bonds are collateral assets. Collateral is needed to expand Credit. This is Debt Deflation writ large. Yes?”

Global Debt, Equity Markets Lose $1 Trillion In Value This Week (ZH)

Thanks to Janet Yellen’s rate-hike-hawkishness (but, but, but, we’re still ultra-easy), global equity and debt markets lost over $1 trillion in value – the biggest weekly loss since early May (weak China data and huge surge in dollar). Global bonds lost over $430 billion in market value this week (Yellen hawkishness and China bond carnage) but stocks lost even more ($525 billion) as China financial turmoil added to the world’s woes (and “three rate hikes next year” and fiscal stimulus efficacy questions did not help).

Having retraced back to pre-Trump levels before The Fed statement this week, the combination of China turmoil and Janet’s un-dovishness sent global stocks and bonds down over $1 trillion on the week – the worst week globally since May 2016 (when the dollar surged amid China weakness and slowing EU growth forecasts)

In fact, while US bank stockholders are ebullient at The Trump presidency-to-be, the rest of the world has lost a combined $1.5 trillion in market value across its bonds and stocks (thanks in major part to Janet’s help this week).

Read more …

No holding back here.

January 2017 Earnings Is Going To Be a Bloodbath (EconMatters)

We discuss a preview of January`s Earnings releases and how massive the gap down in most of these stocks will be when they report in a month. There have already been two earning`s guide downs from industrial companies this past week in UTX, and HON. But with the run up in financials and energies for the last month we are going to experience big $5 chunks taken out of these stocks and massive after hours and pre-market gap downs that will cause entire sectors to sell off during earnings in January. It is just going to be brutal, expect 500 point down days in the Dow during this upcoming earnings period. You have seasonal stocks that selloff every year like Apple and Amazon, as the 4th quarter is their best by far for sales and revenues.

And you have energy companies with exorbitant p/e ratios like COP, XOM, CVH that are priced for $115 dollar oil not $55 oil that 4th quarter earnings releases are going to bring some fundamental realities back to investors of how overpriced these stocks are right here. You have “dogshit” stocks like C, BAC that are serial underperformers in the financial sector along with WFC with its legal problems and operating distractions of the past year, and JPM which has moved too far entirely too fast and the amount of Monkey Hammering Selling Smack downs of these financials upon reporting is going to be outright brutal for investors stupid enough not to have taken profits before earnings. Not to mention all the other broken companies that have been lifted up in this 4th quarter rally, and are going to be taken out to the woodshed for a red beating when they report.

Throw in all those idiot investors who don`t take profits for tax reasons who will wish they did as everybody sells in the new year at the same time running for the tax exits together, and this January 2017 Earnings period is going to be outright one of the worst we have seen since last January`s massive stock selloff. It is the difference between being able to use a selling algorithm program that gets a decent price for the closing of the position versus taking what the market gives you during selloff and gap down closing of positions where profits are annihilated in a very short timespan. Investors need to evaluate all of the parameters when making tax deferral decisions, and it isn`t as simple as they always mistakenly calculate when making these boneheaded simpleton calculations.

No wonder they cannot outperform the market, you have to take profits into strength, not weakness when everybody and their brother is selling. Why Investors continue to exhibit the same stupid patterns is beyond me, but the smart ones will be selling in the next two weeks to beat the carnage selling that occurs in January due to tax deferral selling, and reality setting in that no amount of Trump Magic can make these pig stocks earnings for the 4th quarter look good relative to the current stock prices. It is going to get ugly folks!

Read more …

Nice piece from Wolf Richter. He recognizes the inherent risks: “Trump, as President, would be more than embarrassed to see financial markets sag under his watch.”

Trump Talked, the Fed Listened: Shrink the Balance Sheet, Bullard Says (WS)

Bullard would start by allowing maturing securities to roll off the balance sheet without replacing them with new asset purchases, he said. That would shrink the balance sheet. And it would make financial conditions more restrictive. Shedding assets accumulated on the Fed’s balance sheet is the ultimate form of tightening. It would pull liquidity out of the markets and force them to stand on their own wobbly feet. And he’s a dove! He sees only one rate hike next year. Until recently, he saw only one rate hike, period – the one we just got – and no additional hikes over the next few next years. But he’s ogling the balance sheet. If shrinking the balance sheet is too radical for now, the Fed could replace longer term securities as they mature with short-dated securities, he said. This would make unwinding the balance sheet easier, once the decision is made.

These short-dated securities could just be allowed to mature without replacement. It could go pretty quickly. “My preference would be to allow some runoff in the balance sheet,” he said. But before markets could spiral into a paroxysm, he added that he didn’t think efforts to shrink the balance sheet were “imminent.” He has been a voting member of the Federal Open Market Committee, which makes the decisions on rates, QE, and balance sheet shrinkage. But next year, he’ll rotate into a non-voting slot. So he’s just setting some trial balloons adrift. A few Fed heads have dared to suggest that they’d want to shrink the balance sheet eventually, possibly after everyone’s life expectancy expires. They’d want to raise rates first, and if the economy hasn’t fallen into a recession or worse by then, it might be time to think about letting the balance sheet contract.

But the economy might never get to where there are some sort of normal rates without a recession. And a recession would start the whole process of rate cutting and perhaps QE all over again, and the balance sheet might never be shrunk in this scenario. Bullard doesn’t want to wait that long. For good reason. QE has caused enough distortions. Shrinking the balance sheet by allowing bonds to roll off, while keeping the fed funds rate relatively low, for example at 1.5% by next year, would cause long term rates to rise sharply while keeping a lid on short-term rates. It would steepen the yield curve. In this scenario, the 10-year yield – at 1.38% in July and now at 2.6% – might go to 4% or beyond.

It would have an epic impact on Trump’s “artificial stock market.” It would cause all kinds of mayhem, because Trump was right: The epic bond market bubble and the stock market rally that has pushed all conventional metrics off the charts have been fueled by the Fed. The effects of removing, to use Trump’s term, the “artificial” elements from the stock market could be interesting. We’d have to avert our eyes from the carnage in the bond market. And Housing Bubble 2, with 30-year fixed-rate mortgages at 6%? That’s historically low and worked just fine ten years ago (it helped create Housing Bubble 1). But with the inflated home prices of today, it would mark a big reset.

Today’s equations won’t work at these interest rates. The fireworks could be astounding. But in the big picture, it would just unravel some of the excesses of the past few years, bring a hue of normalcy to the markets, and refocus attention on the real economy instead of wild financial speculations. Trump, as he was talking during the campaign, should appreciate that. Trump, as mega-investor, might get queasy. And Trump, as President, would be more than embarrassed to see financial markets sag under his watch.

Read more …

China knows Trump is a dealmaker. Just like they are. They must have chuckled at his response. But not officially of course.

Pentagon Says China to Return Drone; Trump Says They Can Keep It (BBG)

The Pentagon said China will return a U.S. Navy underwater drone after its military scooped up the submersible in the South China Sea late this week and sparked a row that drew in President-elect Donald Trump, who said on Twitter the Chinese stole it, so they can keep it. “Through direct engagement with Chinese authorities, we have secured an understanding that the Chinese will return the UUV to the United States,” Pentagon spokesman Peter Cook said in a statement on Saturday, referring to the unmanned underwater vehicle the U.S. said had been operating in international waters. China’s ministry of defense pledged an “appropriate” return of the drone on its Weibo social media account, while also criticizing the U.S. for hyping the incident into a diplomatic row.

It followed assurances from Beijing that the governments were working to resolve the spat, punctuated by a tweet from Trump denouncing the seizure as “unprecedented.” The drone incident was disclosed by the Pentagon on Friday. China’s ministry said the U.S. “hyped the case in public,” which it said wasn’t helpful in resolving the problem. The U.S. has “frequently” sent its vessels and aircrafts into the region, and China urges such activities to stop, the ministry said in its Weibo message. Trump slammed the Chinese navy’s capture of the vehicle in a message to his 17.4 million Twitter followers. “China steals United States Navy research drone in international waters – rips it out of water and takes it to China in unprecedented act,” Trump wrote Saturday hours after the Chinese government said it had been in touch with the U.S. military about the incident.

In a follow-up Twitter message, the president-elect said: “We should tell China that we don’t want the drone they stole back – let them keep it!” The tensions unleashed by the episode underscored the delicate state of relations between the two countries, weeks before Trump’s inauguration. Trump has threatened higher tariffs on Chinese products and questioned the U.S. approach to Taiwan, which Beijing considers part of its territory. Meanwhile, China is growing more assertive over its claims to disputed sections of the South China Sea.

Read more …

An ‘experiment’ targeted at 2000 specific people has nothing to do with Universal Basic Income. These ‘experiments’ are only valid when it’s truly universal, or at least nationwide. And when they involve people with AND without jobs. You simply can’t do ‘universal’ on a small scale.

Free Cash in Finland. Must Be Jobless. (NYT)

No one would confuse this frigid corner of northern Finland with Silicon Valley. Notched in low pine forests just 100 miles below the Arctic Circle, Oulu seems more likely to achieve dominance at herding reindeer than at nurturing technology start-ups. But this city has roots as a hub for wireless communications, and keen aspirations in innovation. It also has thousands of skilled engineers in need of work. Many were laid off by Nokia, the Finnish company once synonymous with mobile telephones and more recently at risk of fading into oblivion. While entrepreneurs are eager to put these people to work, the rules of Finland’s generous social safety net effectively discourage this. Jobless people generally cannot earn additional income while collecting unemployment benefits or they risk losing that assistance.

For laid-off workers from Nokia, simply collecting a guaranteed unemployment check often presents a better financial proposition than taking a leap with a start-up in Finland, where a shaky technology industry is trying to find its footing again. Now, the Finnish government is exploring how to change that calculus, initiating an experiment in a form of social welfare: universal basic income. Early next year, the government plans to randomly select roughly 2,000 unemployed people — from white-collar coders to blue-collar construction workers. It will give them benefits automatically, absent bureaucratic hassle and minus penalties for amassing extra income. The government is eager to see what happens next. Will more people pursue jobs or start businesses? How many will stop working and squander their money on vodka?

Will those liberated from the time-sucking entanglements of the unemployment system use their freedom to gain education, setting themselves up for promising new careers? These areas of inquiry extend beyond economic policy, into the realm of human nature. The answers — to be determined over a two-year trial — could shape social welfare policy far beyond Nordic terrain. In communities around the world, officials are exploring basic income as a way to lessen the vulnerabilities of working people exposed to the vagaries of global trade and automation. While basic income is still an emerging idea, one far from being deployed on a large scale, the growing experimentation underscores the deep need to find effective means to alleviate the perils of globalization.

Read more …

Covered by taxpayers.

Monte dei Paschi to Start Taking Orders for Shares on Monday (BBG)

Banca Monte dei Paschi di Siena SpA will begin taking orders for shares as soon as Monday as it aims to complete raising €5 billion of capital before Christmas, people with the knowledge of the matter said. Monte Paschi will attempt to sell stock through Thursday, said the people, who asked to not be named because the plan isn’t public yet. The price and total number of shares to be sold will be determined based on investor demand and on the outcome of the separate debt-to-equity swap, the people said. CEO Marco Morelli, who took over in September, is racing to find backers for his effort to clean up the bank’s balance sheet.

The failure of the recapitalization would be a blow to Italy’s sputtering efforts to revive a banking industry that’s burdened with about €360 billion in troubled loans, dragging down the economy by limiting lending. The lender earlier this week extended a debt-for-equity swap that is one of the three main interlocking pieces of the bank’s capital-raising plan. The bank also plans a cash infusion from anchor investors and a share sale. The offer, involving the exchange of about 4.5 billion euros of Tier 1 and Tier 2 securities, is set to end at 2 p.m. on Dec. 21. Monte Paschi, facing a Dec. 31 deadline to complete the fundraising, also will promote an exchange on 1 billion euros of hybrid securities issued in 2008 known as FRESH at 23.2% of face value, the lender said in a filing on its website.

Read more …

Almost funny.

Hillary’s Campaign The Most Incompetent In Modern History (Davis)

It wasn’t sexism, or racism, or the FBI, or fake news, or the Russians, which cost Hillary Clinton the presidential election. According to a blockbuster campaign dispatch published by Politico on Wednesday, sheer incompetence was the real cause of Clinton’s electoral implosion in November. Clinton’s loss was caused not by one bad decision here or there, the Politico report shows, but by a cascade of mind-bogglingly stupid decisions made throughout the campaign. For example, there was the time campaign surrogates were ordered to stay and campaign in Iowa, which Clinton lost by 10 points, instead of working to get out the vote for Clinton in Michigan:

Everybody could see Hillary Clinton was cooked in Iowa. So when, a week-and-a-half out, the Service Employees International Union started hearing anxiety out of Michigan, union officials decided to reroute their volunteers, giving a desperate team on the ground around Detroit some hope. They started prepping meals and organizing hotel rooms. SEIU — which had wanted to go to Michigan from the beginning, but been ordered not to — dialed Clinton’s top campaign aides to tell them about the new plan. According to several people familiar with the call, Brooklyn was furious. Turn that bus around, the Clinton team ordered SEIU. Those volunteers needed to stay in Iowa to fool Donald Trump into competing there, not drive to Michigan, where the Democrat’s models projected a 5-point win through the morning of Election Day.

Then there was the time the campaign, instead of spending its cash in competitive states the candidate needed to win to clinch an electoral college victory, sent millions to the Democratic National Committee, which used the money to run up vote totals in uncompetitive states so Clinton would win the popular vote:

But there also were millions approved for transfer from Clinton’s campaign for use by the DNC — which, under a plan devised by Brazile to drum up urban turnout out of fear that Trump would win the popular vote while losing the electoral vote, got dumped into Chicago and New Orleans, far from anywhere that would have made a difference in the election.

There was also the time Clinton didn’t even bother to show up at a Michigan event for the United Auto Workers, a key union constituency on which Democrats traditionally rely for get-out-the-vote (GOTV) efforts throughout the Rust Belt:

Clinton never even stopped by a United Auto Workers union hall in Michigan, though a person involved with the campaign noted bitterly that the UAW flaked on GOTV commitments in the final days, and that AFSCME never even made any, despite months of appeals.

The Clinton campaign also completely ignored cries for last-second, all-hands-on-deck GOTV help in Michigan on election day. According to Politico, Brooklyn-based campaign staff waved off data showing massive shortfalls in urban turnout and insisted the Democrat would win the state by at least five points:

On the morning of Election Day, internal Clinton campaign numbers had her winning Michigan by 5 points. By 1 p.m., an aide on the ground called headquarters; the voter turnout tracking system they’d built themselves in defiance of orders — Brooklyn had told operatives in the state they didn’t care about those numbers, and specifically told them not to use any resources to get them — showed urban precincts down 25%. Maybe they should get worried, the Michigan operatives said. Nope, they were told. She was going to win by 5. All Brooklyn’s data said so.

Clinton would eventually lose the state by 11,000 votes, less than one quarter of one %age point of all votes cast in the state. In the end, though, it appears that hubris may have been Hillary’s ultimate downfall. Hours before polls closed and long before returns began trickling in, Clinton’s top staffers weren’t scrambling for every last vote. Instead, they were busy measuring the Oval Office curtains and searching for champagne bottles to uncork to celebrate their historic victory. “In at least one of the war rooms in New York, they’d already started celebratory drinking by the afternoon, according to a person there,” Politico reported. “Elsewhere, calls quietly went out that day to tell key people to get ready to be asked about joining transition teams.” Oops.

Read more …

An editorial that means sense. Maybe America’s papers are not all doomed to oblivion after all.

Just Who Is Undermining Election? Russians Or CIA? (Albuquerque Journal Ed.)

Congress needs to dust off its Magic 8 Ball. At this point, how else are our elected representatives going to get to the bottom of allegations that Russia and its president, Vladimir Putin, tried to influence the U.S. general election? After all, the CIA isn’t being very open – at least not with our elected representatives. Instead of briefing the House Intelligence Committee about the alleged Russian role in hacked emails made public during the campaign – which Democrats desperately seek to blame for Hillary Clinton’s loss – the agency is leaking conclusions without facts to the Washington Post, New York Times and television networks. The media, naturally, are quick to report the anonymous bits of “blame Putin” information to the public. So to the extent Putin meddled, our own spies have at least matched his efforts to discredit our electoral system.

To recap: Private emails from the Democratic National Committee and Clinton campaign were made public via WikiLeaks, allegedly through hacking, even though the FBI had tried to warn the DNC back in September 2015 of problems with its security system. The agency couldn’t get past the party’s technical help desk – harking back to Hillary’s email security problems on her own private server. The media reported on the leaks daily – and if a reporter had obtained the same information from inside sources, there would be no controversy at all. Today’s uproar is over the source – not the substance. But the CIA’s alleged conclusion – that Russia intervened to help Trump win – does not square with comments made Nov. 17 by James Clapper, director of National Intelligence. He said he lacked “good insight” about whether there was a connection between the WikiLeaks releases and Russia.

Congressional Republican leaders are taking the allegations seriously. “The Russians are not our friends,” Senate Majority Leader Mitch McConnell said. House Speaker Paul Ryan called any Russian intervention “especially problematic because, under President Putin, Russia has been an aggressor that consistently undermines American interests.” But Intelligence Committee member Peter King of New York flatly accused the U.S. intelligence community of waging a disinformation campaign aimed at undermining Trump’s credibility – if not changing the course of the Electoral College. Not surprisingly, President Obama is seizing a newfound political opportunity and is taking a new interest despite earlier claims of knowing all along of Russian shenanigans but choosing not to go public with whatever evidence he had – none of which he has produced.

[..] The source of the campaign leaks remains an interesting question, but one unlikely to be answered credibly unless the CIA coughs up its findings to Congress. Cooperation also might help answer the question of possible Russian motives if it was involved: Was it to cast doubt on the U.S. election system? If so, it was highly successful with the help of our own intelligence community and desperate Democrats who simply can’t accept that Trump won 306 Electoral College votes. Though the CIA based its supposed findings of pro-Trump intervention on the fact that no Republican emails were leaked before the election, the Republican National Committee says it wasn’t hacked. And Wikileaks co-founder Julian Assange stands firm in his claim the Russians were not the source of the leaks.

Cyber hacking has become one of the mainstays of life – Yahoo most recently was hacked of more than one billion user accounts. And intervention into foreign elections is something many nations, including the United States, do regularly. Obama recently tried to influence the Brexit vote. And while nobody should feel good about foreign interests intervening in U.S. elections, the reluctance of the U.S. intelligence community to share its information with official sources charged with making decisions about national security, while leaking information via media outlets, is very disturbing, raising the spectre of a political coup by our nation’s intelligence forces.

Read more …

Maybe Britain needs a full-size reboot.

‘Shocking’ Rise in Number of Homeless Children in UK B&Bs at Christmas (G.)

The number of children living in temporary accommodation this Christmas, including in bed and breakfasts, has risen by more than 10% since last year to 124,000, according to the latest government figures. The numbers of children forced into temporary housing in the run up to Christmas have described as “shocking” by the country’s leading charity for the homeless. The data, released by the Department for Communities and Local Government, also reveals a rise of more than 300% since 2014 in the number of families in England who are being housed illegally (for more than the statutory maximum period of six weeks) in B&Bs by local authorities, because they cannot find any alternative places. Campbell Robb, Shelter’s chief executive, said: “The latest figures show that councils are increasingly struggling to help homeless families.

“But the number of children placed in B&Bs illegally is truly shocking, and there’s a worrying rise in families moved away from their support network to a new area. We know first-hand the devastating impact this can have on their lives.” He blamed a “perfect storm” of welfare cuts and rising rents, together with a lack of social and affordable housing, that was creating impossible pressure for local authorities. “Councils know that neither option is acceptable but increasingly find themselves with no alternatives,” he said. “Welfare cuts have made private rents unaffordable and that – combined with unpredictable rent rises and a lack of genuinely affordable homes – mean many families are struggling to get by.

“With the loss of private rented homes the single biggest cause of homelessness, it’s no wonder that’s so many families are turning to their council, desperate for help.” [.] The number of households that have become homeless after an eviction over the last year is up 12% compared to a year ago at 18,820 while the total number of households in temporary accommodation has risen to 74,630, up 9% on a year earlier. While 21,400 homeless households have been moved away to a different council area – a 15% rise in the last year.

Read more …

Helena Smith is the Guardian’s Athens correspondent. I haven’t met a Greek who knows of her and had positive things to say. But this is insane. I know editors make headlines, not reporters, but calling Tsipras’ move to soften the crisis blow a little for pensioners, and to feed children at school who don’t eat at home, a “spending spree”, that is way beyond the pale. Shameless.

Tsipras’s Spending Spree May Be Relief To Greeks But It Won’t End Crisis (G.)

Alexis Tsipras, the Greek prime minister, likes to shake things up and, in recent days, he has reverted to form. After 16 months of faithfully toeing the line, the leader rebelled, cautiously at first and then almost jubilantly, casting off the fiscal straightjacket that has encased his government with thinly veiled glee. First came the announcement that low-income pensioners, forced to survive in tax-heavy post-crisis Greece on €800 or less a month, would receive a one-off, pre-Christmas bonus. Then came the news that Greeks living on Aegean isles which have borne the brunt of refugee flows would not be subject to a sales tax enforced at the behest of creditors keeping the debt-stricken country afloat.

Finally, another announcement both antagonising and pointed: 30,000 children living in poverty-stricken areas of northern Greece will henceforth be entitled to free meals in schools. The reaction wasn’t instant but, when it came, it was delivered with force. The European Stability Mechanism, the eurozone’s financing arm, announced that short-term relief measures, agreed only a week before to ease Greece’s debt pile, would be frozen with immediate effect. It did not take long before the German finance ministry, under the unwavering stewardship of Wolfgang Schäuble, followed suit, requesting that creditor institutions assess whether Tsipras had acted in flagrant violation of Athens’ bailout commitments with his unilateral moves.

The leftist insisted that the aid – €61m in supplementary support for pensions and €11.5m for the school meals – would be taken from the primary surplus his government, unexpectedly, had managed to achieve. The assistance would help “heal the wounds of crisis”. “We want to … alleviate all those who have over these difficult years made huge sacrifices in the name of Europe,” he announced before holding talks with German chancellor Angela Merkel late Friday.

Read more …

Nov 252016
 
 November 25, 2016  Posted by at 9:53 am Finance Tagged with: , , , , , , , , ,  10 Responses »
Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInShare on TumblrFlattr the authorDigg thisShare on RedditPin on PinterestShare on StumbleUponEmail this to someone


Robert Capa Anti-fascist militia women at Barcelona street barricade 1936


America’s Trade Advantage: Large Deficits (Pettis)
All Aboard Post-TPP World (Escobar)
The Bank of Japan Can’t Keep Stores From Cutting Prices (BBG)
China Banking Regulator Wrestles With $2.9 Trillion Off-Balance Sheet WMPs (R.)
China Central Bank Warns Against Outflows Disguised As Investment (R.)
ECB Says It Can Shield Eurozone From Global Finance Instability (BBG)
The Snowball of Debt (HowMuch/VC)
Russia to OPEC: Oil Freeze Is All You Get
Germany, 15 Other Countries Press For Arms Control Deal With Russia (R.)
Fillon Calls Hollande’s Hardline Policy On Russia ‘Absurd’ (EuA)
EU Parliament President Martin Schulz to Step Down, Run Against Merkel (WSJ)
Increasingly Rapid Ice Melt Could Trigger Uncontrollable Climate Change (G.)
Erdogan Threatens To Open Borders To Refugees After EU Vote (AFP)
Refugees Torch Lesbos Camp After Gas Explosion Kills Two (AFP)

 

 

Interesting point of view. What Pettis ignores is that the issuer of a global reserve currency MUST always run a deficit, or the world will be starved of money.

America’s Trade Advantage: Large Deficits (Pettis)

Even China’s official voice, the People’s Daily, pointed out Monday how unlikely it was that China could “overtake the U.S. to lead the world.” This is because China must accommodate high and rising trade surpluses to moderate a stark trade-off between rising debt and rising unemployment. After years of deep imbalances and accelerating credit growth, China this year met its 6.7% GDP-growth target—needed to stabilize employment—only by growing debt in a frightening amount equal to more than 40 percentage points of GDP. Debt limits are a major constraint on China’s difficult adjustment. The country must therefore rely on its trade surplus for crucial breathing space, with each percentage point of surplus substituting for about 10 percentage points of debt.

To see how this affects China’s leadership role, consider how the U.S., only after 50 years as the world’s largest economy and a negligible governance role, finally came to dominate global trade. This occurred over two separate periods. The first ran for roughly five decades beginning with World War I. Two highly destructive world wars left all the world’s major economies acutely short of capital—all except for the U.S., which began the period as the world’s largest surplus nation and its main exporter of savings. This inevitably put America at the center of the emerging economic order. By the 1970s, conditions were very different. The other advanced nations had rebuilt their economies, global savings were abundant and other forms of demand determined the growth rates for most economies.

Rather than receive access to scarce capital, these countries wanted instead to export capital, i.e., to expand demand by increasing exports of tradable goods while constraining imports. With its flexible financial system and the gradual elimination by the 1970s of all capital restrictions, the U.S. quickly adapted and began running large deficits, the costs of which, in the form of unemployment and consumer debt, America was willing to absorb for political advantage. This is the key reason why China cannot replace the U.S. as the leader of global trade.

[..] Opposition to trade, particularly among Americans most vulnerable to unemployment and consumer debt, was therefore inevitable. But rather than other countries reorganizing around the surpluses China requires, it is more likely that over time global trade will become unstable and increasingly contentious. That is in fact closer to the historical norm than the anomalous stability of the four decades before 1914 and the six after 1945. A U.S. retreat from trade would clearly be damaging to global prospects. Many economists argue that it will also damage U.S. prospects. But they are almost certainly wrong. History suggests that intervention usually benefits diversified economies with large, persistent trade deficits, especially when driven at least in part by distortions abroad.

Read more …

Escobar should read Pettis.

All Aboard Post-TPP World (Escobar)

A half-hearted near handshake between US President Barack Obama and Russian President Vladimir Putin before and after they spoke ‘for about four minutes’, standing up, on the sidelines of the APEC summit in Lima, Peru, captured to perfection the melancholic dwindling of the Obama era. A whirlwind flashback of the fractious relationship between Obama and ‘existential threats’ Russia and China would include everything from the Washington-sponsored Maidan in Kiev to Obama’s ‘Assad must go’ in Syria, with special mentions to the oil price war, sanctions, the raid on the ruble, extreme demonization of Putin and all things Russian, provocations in the South China Sea – all down to a finishing flourish; the death of the much vaunted TPP treaty, which was reconfirmed at APEC right after the election of Donald Trump.

It was almost too painful to watch Obama defending his not exactly spectacular legacy at his final international press conference – with, ironically, the backdrop of the South American Pacific coast – just as Chinese President Xi Jinping all but basked in his reiterated geopolitical glow, which he already shares with Putin. As for Trump, though invisible in Lima, he was everywhere. The ritual burial, in Peru’s Pacific waters, of the «NATO on trade» arm of the pivot to Asia (first announced in October 2011 by Hillary Clinton) thus offered Xi the perfect platform to plug the merits of the Regional Comprehensive Economic Partnership (RCEP), amply supported by China. RCEP is an ambitious idea aiming at becoming the world’s biggest free trade agreement; 46% of global population, with a combined GDP of $17 trillion, and 40% of world trade.

RCEP includes the 10 ASEAN nations plus China, Japan, South Korea, India, Australia and New Zealand. The RCEP idea was born four years ago at an ASEAN summit in Cambodia – and has been through nine rounds of negotiations so far. Curiously, the initial idea came from Japan – as a mechanism to combine the plethora of bilateral deals ASEAN has struck with its partners. But now China is in the lead. [..] Meanwhile, Putin and Xi met once again – with Putin revealing he’s going to China next spring to deepen Russian involvement in the New Silk Roads, a.k.a. One Belt, One Road (OBOR). The ultimate objective is to merge the Chinese-led OBOR with the development of the Russia-led Eurasia Economic Union (EEU).

That’s the spirit behind 25 intergovernmental agreements in economy, investment and nuclear industry signed by Russian PM Dmitry Medvedev and Chinese PM Li Keqiang in St. Petersburg in early November, as well as the set up of a joint Russia-China Venture Fund. In parallel, almost out of blue, and with a single stroke, Turkey President Tayyip Erdogan, on the way back from a visit to Pakistan and Uzbekistan, confirmed what had been all but evident for the past few months; “Why shouldn’t Turkey be in the Shanghai Five? I said this to Mr. Putin, to (Kazakh President) Nazarbayev, to those who are in the Shanghai Five now… I think if Turkey were to join the Shanghai Five, it will enable it to act with much greater ease”.

Read more …

How is it possible that this is still allowed to continue?

The Bank of Japan Can’t Keep Stores From Cutting Prices (BBG)

While Governor Haruhiko Kuroda’s vow to overshoot the Bank of Japan’s 2% inflation target caused a stir among monetary policy watchers in September, it’s yet to have an impact among retailers. Stores as diverse as supermarket operator Aeon, Mister Donut and Wal-Mart have all announced price cuts since Kuroda’s pledge, underscoring the weakness in Japanese consumer spending and the difficulty of overcoming the “deflationary mindset” that the BOJ set out to eradicate. Consumer prices fell for an eighth straight month in October, a government report showed Friday. “Companies are just being practical,” said Masamichi Adachi at JPMorgan. “No one is buying the BOJ’s new commitment. There is strong doubt that the BOJ can even achieve the 2% target and the name ‘overshooting commitment’ itself is hard to understand for ordinary people.”

Falling prices and expectations for more of the same could also drag on annual wage talks, which start soon. Kuroda said last week that he’s “paying close attention” to these, as weak growth in pay has been hampering efforts to generate inflation. It’s essential for Japanese companies to set salaries based on the premise of 2% inflation, he said. Base salaries, which exclude bonuses and overtime, will rise this year by less than last year, Dai-ichi Life Research Institute forecast in a report this month. This reinforces frugality among shoppers and encourages retailers to compete by discounting.

Read more …

Beijing does not control its own economy. It’s hostage to the shadow banks.

China Banking Regulator Wrestles With $2.9 Trillion Off-Balance Sheet WMPs (R.)

China’s banking regulator may be getting serious about how lenders provision for the more than 20 trillion yuan ($2.9 trillion) of wealth management products (WMPs) that have been issued as non-guaranteed off-balance sheet liabilities. The China Banking Regulatory Commission (CBRC), in new draft rules released on Wednesday, demanded banks apply a more “comprehensive” approach to cover “substantive risks” related to off-balance sheet activities, or shadow banking. The guidelines, which would replace 2011 regulations and are awaiting comment, proposed such measures as adding impairment loss allowances and properly calculating risk-weighted assets for off-balance sheet activity.

It was the latest measure announced by CBRC to curb shadow banking risks and address the rapid growth of WMPs, which amounted to 26.28 trillion yuan ($3.8 trillion) by end-June, data from the Banking Sector Wealth Management Product Registration and Custodian Centre showed. That amounts to around 39% of China’s GDP in 2015. About 77%, or 20.18 trillion yuan, of the products are non-guaranteed bank WMPs, a major component of shadow banking activity, the data showed. CBRC Chairman Shang Fulin warned banks in September the rampant growth of their off-balance sheet operations must be curtailed, and represented a “hidden credit risk that potentially threatens financial safety”.

[..] China’s mid-tier and small lenders, which have raised a greater proportion of their funding using WMPs, are more vulnerable to off-balance sheet liquidity risks. One important obstacle is capital. A very strict interpretation of the draft regulations, requiring banks to hold reserves against all off-balance sheet issuance, would require banks to raise as much as 1.7 trillion yuan to maintain current capital levels, said Jack Yuan, a banking analyst at Fitch. “The incentives for banks to issue more off-balance sheet WMPs still exists,” said Yuan. “There’s nothing in these rules that disincentivizes banks from continuing on with more off-balance sheet activity.” “It’s like driving a car,” said a risk manager at another mid-size lender. “If you don’t follow the rules, there’s a mess. But if you follow the rules, that doesn’t mean you have to slow down.”

Read more …

How do you tell them apart though?

China Central Bank Warns Against Outflows Disguised As Investment (R.)

China’s central bank has urged commercial banks in Shanghai to guard against money outflows via the Shanghai Free Trade Zone (FTZ) disguised as foreign investment, two sources with knowledge of the instructions said on Friday. The Shanghai headquarters of the People’s Bank of China asked for particular vigilance against money originating in other provinces or cities in China that flowed into the FTZ en route abroad, the banking industry sources said. The guidance from the PBOC’s was the latest in a string of measures to stem surging capital outflows as the yuan currency plumbs 8-1/2 year lows against the surging U.S. dollar.

“The central bank has urged lenders to strengthen due diligence to prevent capital outflows disguised as outbound investment,” said one source, who declined to be identified because he was not authorized to speak publicly about the matter. On Wednesday it said it would crack down on capital flight and closely monitor abnormal capital flows through the FTZ. In a report on Tuesday, Capital Economics estimated that capital outflows last month were the largest since January, and posed a threat to China’s exchange rate regime. The Shanghai FTZ was launched in 2013 to promote international trade and cross-border investment, but three years later the city government is trying to balance efforts to accelerate financial reforms in the zone while preventing capital outflows.

Read more …

But of course….

ECB Says It Can Shield Eurozone From Global Finance Instability (BBG)

The ECB is confident it will be able to continue shielding the euro area from the risk of a sudden correction in asset prices, after political events such as the election of Donald Trump threaten to increase volatility in coming months. “We are certainly seeing a correction coming from the U.S.,” ECB Vice President Vitor Constancio said on Thursday in an interview with Bloomberg TV’s Matt Miller. “The ECB will continue to exert its stabilizing role, so I don’t think there will be significant contagion to Europe.” Constancio spoke on the occasion of the publication of the ECB’s twice-yearly Financial Stability Review.

The report warns that the risk of an abrupt global market correction has intensified on the back of widespread political uncertainty, posing a threat to banks, stability and economic growth. While the policies of incoming President Trump may lead to higher spending and faster inflation in the U.S., their effect on the euro area is difficult to gauge given the possibility of protectionist tit-for-tats and higher chances of populist victories in votes across the continent. “More volatility in the near future is likely and the potential for an abrupt reversal remains significant,” according to the bank. “Elevated geopolitical tensions and heightened political uncertainty amid busy electoral calendars in major advanced economies have the potential to reignite global risk aversion and to trigger a major confidence shock.”

Read more …

A similar graph of private debt would be more revealing.

The Snowball of Debt (HowMuch/VC)

With the U.S. National Debt closing in on the $20 trillion mark, there has been a lot of conversation in Washington about debt and its role in government. And most of that conversation right now revolves around President-elect Donald Trump. On one hand, the Trump campaign had early rhetoric in the Presidential campaign that the elimination of the deficit and existing government debt would be paramount if elected. The Trump administration has also been highly critical of the Federal Reserve, saying that the Fed’s policies create a “false economy”. As a result, some see Trump embracing the unique opportunity to put his stamp on how the Federal Reserve does business in early 2017.

On the other hand, even many conservative think tanks are concerned about what Trump policies mean for government debt. Rebuilding infrastructure is not cheap, and widely-cited estimates see the national debt increasing by anywhere from $5.3 trillion to $11.5 trillion over the next 10 years. While giant numbers like $20 trillion sound abstract and meaningless, converting them to debt-per-capita can make things more intuitive. The per-capita amount shows the amount of debt that exists per citizen, and makes things plain and simple. Today’s infographic from HowMuch.net, a cost information site, shows government debt-per-capita in every country in the world, including the United States.

Here are the countries where people owe the most debt per person:
Japan: $85,694.87 per person
Ireland: $67,147.59 per person
Singapore: $56,112.75 per person
Belgium: $44,202.75 per person
United States: $42,503.98 per person
Canada: $42,142.61 per person
Italy: $40,461.11 per person
Iceland: $39,731.65 per person
Australia: $38,769.98 per person
United Kingdom: $36,206.11 per person
Of course, debt-per-capita isn’t the only lens to view government debt.

Read more …

Manipulating prices with empty words. If they ever sign an agreement, it will be a hollowed out one, and it won’t last more than two weeks.

Russia to OPEC: Oil Freeze Is All You Get

Facing pressure from OPEC to make a significant output reduction, Russia reiterated its readiness to freeze oil production at current levels, arguing that the offer amounted to a cut compared with next year’s plans. A production cap would mean Russia pumping 200,000 to 300,000 barrels a day less than planned in 2017, Energy Minister Alexander Novak told reporters in Moscow on Thursday. That means a freeze would be “quite a difficult and harsh situation for us as our plans envisioned an output growth next year,” he said. OPEC, which is seeking to finalize its own supply cuts of as much as 1.1 million barrels a day next week, asked non-members to contribute by cutting daily production by about 500,000 barrels, Novak said.

OPEC reached a preliminary deal in September to reduce collective output to 32.5 million to 33 million barrels a day, compared with the group’s estimate of 33.6 million in October. Talks on individual production quotas continued this week with the aim of securing a final pact by the ministerial meeting in Vienna on Nov. 30. The group will meet lower-level OPEC officials to discuss cooperation on Nov. 28, followed by a Nov. 30 breakfast meeting between ministers and non-members, including Russia, before the ministerial summit, according to people familiar with the matter.

Read more …

Merkel’s anti-Putin stance will be used against her. Germany and Russia should always try to talk. They are too close to not talk.

Germany, 15 Other Countries Press For Arms Control Deal With Russia (R.)

Fifteen European countries have joined Germany in its push for a new arms control agreement with Moscow, saying more dialogue is needed to prevent an arms race in Europe after Russia’s actions in Crimea and eastern Ukraine, a German newspaper said. “Europe’s security is in danger,” German Foreign Minister Frank-Walter Steinmeier told Die Welt newspaper in an interview published on Friday. “As difficult as ties to Russia may currently be, we need more dialogue, not less.” Steinmeier, a Social Democrat who has been nominated to become German president next year, first called for a new arms control deal with Russia in August to avoid an escalation of tensions in Europe.

Fifteen other countries – all belonging to the Organization for Security and Cooperation in Europe – have since joined Steinmeier’s initiative: France, Italy, Austria, Belgium, Switzerland, the Czech Republic, Spain, Finland, the Netherlands, Norway, Romania, Sweden, Slovakia, Bulgaria and Portugal. The group plans to issue a joint statement on Friday and will meet again on the sidelines of a Dec. 8-9 ministerial level OSCE meeting in Hamburg that will be hosted by Germany, which now holds the rotating presidency of the OSCE. Steinmeier condemned Russia’s annexation of Crimea and its support for separatists in eastern Ukraine, saying such acts undermined delicate bonds of trust built up over decades and threatened to unleashed a new arms race.

U.S. officials are skeptical about the initiative, citing Russia’s failure to abide by existing agreements and treaties. Steinmeier also drew criticism from U.S. and NATO officials in June after warning that Western military maneuvers in eastern Europe amounted to “saber-rattling and shrill war cries” that could worsen tensions with Russia.

Read more …

I’ve said it before: it’s never a good feeling when the looses cannons make most sense. But that’s 2016 for you.

Fillon Calls Hollande’s Hardline Policy On Russia ‘Absurd’ (EuA)

In a televised debate last night (24 November) French conservative frontrunner François Fillon said Russia must be anchored to Europe, or else Moscow would couple with China, to the detriment of the continent. The debate was largely seen as the last chance for Alain Juppé, who came second in the first round of the primary elections of the conservatives last Sunday, to impress the conservative electorate and catch up on Fillon ahead of the 27 November run-off. The one-and-a-half hour debate was generally uncontroversial. One of the rare contentious exchanges was when Juppé questioned Fillon’s perceived closeness to Russian President Vladimir Putin. Putin knew Fillon when they were both prime ministers.

In an unusual televised appearance the Russian president praised him Wednesday as a “great professional” and a “very principled person”. “This must be the first presidential election in which the Russian president chooses his candidate,” Juppé said. Fillon brushed off Putin’s comments but said the West must work more closely with Russia at a time when relations are at their worst since the Cold War. “Russia is a dangerous country if we treat it as we have treated it for the last five years,” Fillon said. He said the real danger to Europe was not Russia but the economic threat of “the Asian continent”. Fillon argued that Russia should be anchored to Europe geopolitically or risk seeing Moscow forge alliances with China instead.

He called “absurd” the hardline policy of French President François Hollande with regard to Russia, saying it only made Moscow harden its positions and exacerbate its nationalist reflexes. The French conservative frontrunner said the EU would not change alliances and would not abandon its transatlantic link, but added that Paris didn’t need the permission from Washington to talk to Moscow. “What I am asking is that we sit down at a table with the Russians without asking for the agreement of the United States and that we re-establish a link, if not a relation based on confidence, which will make it possible to anchor Russia to Europe.”

Read more …

His EU pension for life will be stunning. And now he can add a German one.

EU Parliament President Martin Schulz to Step Down, Run Against Merkel (WSJ)

European Parliament President Martin Schulz said on Thursday that he would stand down in January and run in next year’s elections in Germany, where he is seen as a potential rival to Chancellor Angela Merkel. The 60-year-old, who has been a member of the European Union’s legislature for the past 22 years, said it was “not an easy decision” to quit. Mr. Schulz’s return to German politics after more than 20 years in Brussels is fueling speculation that he could lead his Social Democratic Party’s ticket at next year’s general election, to run against Ms. Merkel’s conservatives. “My commitment to the European project is unwavering. From now on I will be fighting for this project from the national level, but my values don’t change,” Mr. Schulz said.

He noted that as the largest country in the EU, Germany “bears a special responsibility” which he will strive to fulfill, as of next year, from Berlin. Mr. Schulz didn’t comment on the possibility that he could succeed Frank-Walter Steinmeier as Germany’s foreign minister after the latter vacates his post early next year to run for the largely ceremonial office of German president. The SPD has said it would decide in January who would lead it into the general election next fall. SPD officials said Sigmar Gabriel, party chairman and economics minister, had the first shot, and would have to voluntarily yield to Mr. Schulz. The two men are longtime friends.

Read more …

We play around, very much at our own peril. with systems far too complex for us to understand. We simply deny we don’t understand. And there’s something ironically stupid in the Trump team taking away funding from NASA to be used in … space exploration. That you don’t make up.

Increasingly Rapid Ice Melt Could Trigger Uncontrollable Climate Change (G.)

Arctic scientists have warned that the increasingly rapid melting of the ice cap risks triggering 19 “tipping points” in the region that could have catastrophic consequences around the globe. The Arctic Resilience Report found that the effects of Arctic warming could be felt as far away as the Indian Ocean, in a stark warning that changes in the region could cause uncontrollable climate change at a global level. Temperatures in the Arctic are currently about 20C above what would be expected for the time of year, which scientists describe as “off the charts”. Sea ice is at the lowest extent ever recorded for the time of year. “The warning signals are getting louder,” said Marcus Carson of the Stockholm Environment Institute and one of the lead authors of the report. “[These developments] also make the potential for triggering [tipping points] and feedback loops much larger.”

Climate tipping points occur when a natural system, such as the polar ice cap, undergoes sudden or overwhelming change that has a profound effect on surrounding ecosystems, often irreversible. In the Arctic, the tipping points identified in the new report, published on Friday, include: growth in vegetation on tundra, which replaces reflective snow and ice with darker vegetation, thus absorbing more heat; higher releases of methane, a potent greenhouse gas, from the tundra as it warms; shifts in snow distribution that warm the ocean, resulting in altered climate patterns as far away as Asia, where the monsoon could be effected; and the collapse of some key Arctic fisheries, with knock-on effects on ocean ecosystems around the globe.

The research, compiled by 11 organisations including the Arctic Council and six universities, comes at a critical time, not only because of the current Arctic temperature rises but in political terms. Aides to the US president-elect, Donald Trump, this week unveiled plans to remove the budget for climate change science currently used by Nasa and other US federal agencies for projects such as examining Arctic changes, and to spend it instead on space exploration.

Read more …

More power away from Merkel.

Erdogan Threatens To Open Borders To Refugees After EU Vote (AFP)

Turkish President Recep Tayyip Erdogan on Friday threatened to throw open Turkey’s borders to illegal migrants after the European Parliament voted to back a freeze in membership talks with Ankara. “Listen to me. If you go any further, then the frontiers will be opened, bear that in mind,” Erdogan told the EU in a speech in Istanbul. On March 18, Ankara and Brussels forged a deal for Turkey to halt the flow of migrants to Europe – an accord that has largely been successful in reducing numbers crossing the Aegean Sea.

Read more …

It’s a miracle we haven’t seen much moe of this kind of thing happen.

Refugees Torch Lesbos Camp After Gas Explosion Kills Two (AFP)

Angry migrants set fire to a camp on the Greek island of Lesbos after a woman and a six-year-old child died following a gas cylinder explosion, local police said. The explosion occurred while the 66-year-old woman was cooking, police said, adding that the child’s mother and four-year-old sibling were hospitalised with serious injuries. In an apparent act of rage, migrants then set fire to the Moria camp on Lesbos, causing significant damage, police said. Firefighters arrived at the scene to try to put out the flames. Ensuing clashes between migrants and police left six refugees slightly injured. Some migrants fled the camp after the blast but had since returned and calm was being restored, a police source said.

Several fires have erupted in refugee camps on the Greek islands, where some 16,000 people became stranded after the European Union signed a deal that was aimed at stemming the influx of migrants. Moria has a capacity for 3,500 people but currently houses more than 5,000. Part of the camp was badly damaged in a fire on September 19 during clashes between migrants and police, and thousands had to be moved out before returning two days later. Nearly 66,000 refugees and migrants are currently stranded in Greece, according to official figures.

Read more …

Nov 132016
 
 November 13, 2016  Posted by at 5:57 pm Finance Tagged with: , , , , , , , , ,  16 Responses »
Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInShare on TumblrFlattr the authorDigg thisShare on RedditPin on PinterestShare on StumbleUponEmail this to someone


Esther Bubley Waiting for Greyhound bus trip from Memphis to Louisville, KY 1943

 

Been scribbling several some post-election notes over the past few days, it seemed a good idea to not publish things too soon after the upset, even if I at least had the advantage that it wasn’t that much of a surprise or upset. But I’ve read far too many people too eager to write about how they haven’t moved an inch, and too many others who have -mostly reluctantly- moved but don’t know how or where to. It’s okay to think about such matters first, guys and dolls. Make that: it’s better. There’s too much nonsense out there as is. Why bother adding to the pile? Here’s a few thoughts in no particular order:

 

 

The transition we find ourselves in, into an era as profoundly different as it will be from the one that preceded it, can only possibly be chaotic. Smooth is not an option. Because it takes much time for people to recognize let alone accept that there is such a transition to begin with, and not everyone acknowledges or accepts it at the same time. Many never will at all, they will be left behind in their own realities tied down by the chains of what once was.

This transition is the one away from economic growth and globalization -centralization in general- and towards smaller, less centered and grandiose, politics and markets. It is not an idealistic transition towards self-sufficiency, it’s simply and inevitably what’s left once unfettered growth hits the skids. It doesn’t have to be anywhere near as bad as people would have you believe, or at least not necessarily so. What could make it real bad, though, is the widespread resistance and denial which seem certain to meet it.

Our entire worldviews and ‘philosophies’ are based on ever more and ever bigger and then some, and our entire economies are built upon it. That has already made us ignore the decline of our real markets for many years now. We focus on data about stock markets and the like, and ignore the demise of our respective heartlands and flyover countries, even as we experience Brexit and Trump and similar movements set to come to many more countries.

Donald Trump looks very much like the ideal fit for this transition – but nor because he understands the issue itself, or its implications. What matters is he promises to bring back jobs to America, and that’s what the country needs. Not so they can then export their products, but to consume them at home, and sell them in the domestic market.

That is the future of the world post-growth, and post-globalization. Every country and every society needs to focus on self-reliance, not as some idealistic luxury choice, but as a necessity. And that is not as bad or terrible as people would have you believe, and it’s not the end of the world. What would be terrible is if all we do is try and restart growth and globalization, because that would be a hideous waste of time and resources.

You’ll be flooded in the years to come, even more than today if you can imagine, with terms like protectionism and isolationism and even populism, but ignore all that. There’s nothing economically -let alone morally- wrong with people producing what they and their families and close neighbors themselves want and need without hauling it halfway around the world for a meagre profit, handing over control of their societies to strangers in the process.

There’s nothing wrong or negative with an American buying products made in America instead of in China. At least not for the man in the street. It’s not a threat to our ‘open societies’, as many claim. That openness does not depend on having things shipped to your stores over 1000s of miles, that you could have made yourselves at a potentially huge benefit to your local economy. An ‘open society’ is a state of mind, be it collective or personal. It’s not something that’s for sale.

 

 

Earlier this week I read what looks to be an apt observation: ‘Every white person in New York who didn’t vote for Trump is now out in the streets protesting against him’. But the people who protest now are miles off target and months too late: they should have stood up for Bernie when it became clear that the Hillary camp and the DNC conspired to oust him. Indeed, Bernie himself should have stood up back then, not for himself but for his supporters; they would have stood up with him.

Whether they all like it or not, being asleep and/or silent when big things happen that count, does carry a price. If you drop the ball, you can’t just pick it back up again and pretend it didn’t fall. Shouting ‘not my president’ in the wake of an election is a sign of weakness, no matter how well-intentioned. The protests should have taken place before the election, not after.

Moreover, to a large extent people are up in protest against the image the Hillary campaign and the media have painted of Trump, not the man himself. A difference they cannot see. Would these same people have been protesting if Hillary had won? No, they wouldn’t. But why?

Many voices expressed the wish that Americans would vote for Hillary, a story about a woman and a glass ceiling, instead of for the male and allegedly sexist and misogynist Donald Trump. Simply because she’s a woman, and it’s time for a female president.

These voices have been consistently and for a long time been blind to the fact that Hillary’s campaign and Foundation, in legal, shady and downright illegal ways, have long been financed to a substantial degree by uber-rich men in charge of Middle East oil extracting nations who have far more misogynist views and attitudes towards women than Trump will ever have.

These men carry things like misogyny, racism, xenophobia and homophobia high and proudly in their banners. Also, they’re well on their way towards obliterating not just an entire country in Yemen, but indeed an entire people, all with the enthusiastic support of Obama, Hillary and their friends and donors in the arms industry. And lest we forget, they sponsor ISIS too. Is that the future Americans want?

 

 

The bright side is the chances of a war with Russia have gone down substantially. While the odds have gone up dramatically of much fewer US servicemen and -women being sent abroad to engage in endless and countless battles and wars that never seemed to have much to do with the US, going back all the way to Korea and Vietnam.

How can either of these things can be perceived as negative? The continuation and expansion of -often proxy- hostilities versus Moscow would have been cast in stone had Hillary been elected, it was a milestone of her entire campaign. And a major part of this would have been fought at some desert location in the Middle East.

Where America has needlessly squandered the lives of many of its young and finest, to and in a mad scramble over control of oil resources which has resulted in nothing but a shapeless chaos that has equally needlessly killed millions of people, sent millions of others fleeing their homes and razed entire ancient civilizations, accomplishments that will follow America around the world for many years to come. Is that the future Americans want? Double down?

There’s -undeniably- still a risk that Donald Trump will succumb to the mighty hand of the military industrial complex. But at the same time, he may well be the country’s -and the world’s- best if not only chance at making that hand that much less mighty. There may be many things wrong with Trump -there are- but being in the pockets of arms manufacturers and other doctors of death is so far not among them, to our best knowledge.

 

 

Hillary and her crowd ran the entire election process from inside a cocoon, built largely on hubris and a lack of contact with the world outside. They had the media so much on their side that TV and newspapers became part of the Hillary cocoon, and reporters got locked into a groupthink mode that then in its turn infected the campaign itself.

What I mean is you can’t stop at saying Trump is a disaster, so let’s pick the other side, it was always very much a choice between two disasters. And at the same time, as I wrote at the Automatic Earth the day of the election, the US presidency is a poisoned chalice. There’s nothing simple about this.

Trump means a big clean-up for the GOP, and the Hillary loss means the chance for the Democrats to do the same. You bet those folks realize achingly well they could have won with Bernie. Hopefully that wing can take over substantially from the lying conniving machinery the DNC has turned out to be.

Someone summed it up as: Trump swept aside the Republicans, the Democrats, the Bush dynasty and the Clinton dynasty, all in one fell swoop, and we should perhaps be thankful to him for that.

 

 

Trump has run his campaign catering to the anger that exists among Americans. And people experience and label that as ‘terrible’ and ‘awful’. His Republican friends and opponents find it terrible, because it scares the bejeezus out of them, and they’re too scared to go anywhere near that anger. Trump embraced the anger. Because he knew from the start, instinctively, that it was the only way he could win.

And you can think like the majority of your peers do, that all that commingling with the anger, with racists and bigots and what have you, is inexcusable. But what you miss out on if you take that approach and hold on to it, is that in that case the anger does not get addressed at all. It’s instead left free to just wander over the land and fester and grow on society, out of reach of politics, media, everything.

A certain by now very vilified cartoonist explained that what Trump does is to ‘feel’ what the angry crowd wants, and then play into it by making over the top statements targeted at the anger. That way this crowd will follow him, gather around him. This has worked like a charm. But no, that doesn’t make him look like a certain German dictator.

Because it does not mean that Trump is going to literally do everything he said in the over the top statements he made. It’s all just a basic sales trick. Trump makes the angry people feel like he knows, and cares about, their grievances. Just like a car salesman makes you think he knows just what you want and need in a car, and praises the assets of that car in such a way that it touches that part of you which makes you want the car.

But that doesn’t mean at the end of the day he’ll drive the same car home that you just bought off of him. He makes you think he is like you, and knows what you want, so he can sell you that car. That’s all. He’s judged you to be the right ‘target’ for that vehicle.

That is how Trump has reeled in America’s hidden anger, how he has gathered its lost hidden mob. And before you say anything else, it’s perhaps a good idea to wonder where that anger would go without Trump. Because it’s not going to go away by itself. It’s been growing and festering for a long time, and it’s well-armed, lest you forget.

The question then becomes: would America be a better, or a safer, place if the entire angry part of its population had again, and still, been ignored by everyone? Or is it better to have them gathered under the umbrella of Donald Trump? Take your pick. Don’t be shy.

Another way to phrase the issue is this: without the exact same sales tactics that Trump used to ‘gather the anger’ around him, the TV ads (most ads in general) you see on a daily basis would look completely different. Whatever products these ads sell, from detergents to cars, they do it by referring to your unconscious, not your rational abilities.

The ads, like Trump, sell feelings, not facts (if you don’t get that, you’re lost).

Yet nobody would think of taking the companies whose products are advertized this way to court -nobody even gets really angry with them- because the happy smily people and unending open roads bathed in sunshine from the ads do not magically appear once you purchase the product. We would even find that crazy, that anyone might take the images shown in the ads, literally.

We should interpret Trump’s campaign words along those same lines, the same way we ‘undergo’ the ads that play to our subconscious. The problem is, how do you do that? How do you interpret what you are largely unaware of on a rational level?

The president-elect will now need the same skills in order to ‘come down that mountain’ without antagonizing each and every side of the discussion, of the nation. He’ll have to convince the liberal camp that he didn’t mean everything he said in a literal sense, while at the same time keeping his ‘angry mob’ satisfied that he will do enough of what he promised them.

That will take a lot of persuading. But at the same time that happens to be the one thing he’s really good at. He’ll have to convince his voters that he’s not breaking his promises, just adjusting them in ways that will, if at all possible, be even more beneficial to them than the original ones.

Difficult, but if he can convince them that there are signs, delivered relatively fast, that their living conditions are improving, he may succeed. They just vent their anger at people that are visibly not themselves, but that’s not where the anger stems from.

 

 

There are all sorts of nasty things going on, racists and supremacist etc. But you can’t say that Trump caused that to happen. The most you could say is that he gives the people involved in that stuff the idea that because someone finally hears them, they can, are allowed to, make themselves heard.

But just because a few loose cannons let loose, doesn’t mean America has 60 million loose cannons who all voted for Trump and should all be condemned including Trump himself for good measure because there’s a few incidents. Not only is that a misinterpretation of what goes on, it prevents you from understanding what lies behind.

Those incidents at least have a lot to do with the fact that so many ignored Americans live in what Washington has long considered flyover country. It would be a lot more positive and productive at this point in time if everyone looks at what they themselves have gotten wrong over the past years -not just this election campaign- before pointing fingers at everyone but themselves.

But seeing the dug-in heels in Britain almost five months after the Brexit vote, it’s hard to get your hopes up about people coming together, or even doing some genuine introspection. It’s easier to just remain stuck in your comfy little rut.

Thing is, the world is rapidly changing -it already has-, America is changing, Britain is, and many more countries will, it just takes an election to show how much. We’re transitioning to a next phase, and trying to deny we are with all our might, good luck and good night.

Or in a more poetic fashion – we can do that too-:

 

the blizzard of the world
has crossed the threshold
and it has overturned
the order of the soul