Dec 222018
 
 December 22, 2018  Posted by at 10:14 am Finance Tagged with: , , , , , , , , , , ,  5 Responses »


Mattia Preti The Adoration of the Shepherds 1660-99

 

More Than Half A Million Americans Will Be Homeless This Christmas (F.)
Dow Dives 400 Points To End Its Worst Week In 10 Years (CNBC)
NY Fed President John Williams: Central Bank Is Listening To The Market (CNBC)
Shutdown Begins As Trump, Democrats Wrestle Over Border Wall (ZH)
A Fretful Holiday (Kunstler)
Chinese Leaders Promise Tax Cuts To Boost Flagging Economic Growth (CNBC)
Goldman Sachs Facing Class Action Lawsuits Over 1MDB Scandal (G.)
Corbyn: Brexit Would Go Ahead Even If Labour Won Snap Election (G.)
Der Spiegel To Run 23-Page Special On Reporter Who Faked Stories (AFP)
WikiLeaks Exposes US Embassies Stockpiling Spy Gear (RT)
UN Tells UK: Allow Assange To Leave Ecuador Embassy Freely (R.)
UN Experts Call For Assange’s Release As He Loses Last Appeal Over Rules (RT)
Risks Of ‘Domino Effect’ Of Tipping Points Greater Than Thought (G.)

 

 

That’s all? Hard to believe. But whatever the real number, isn’t this what Christmas is about, and what should dominate the news?

More Than Half A Million Americans Will Be Homeless This Christmas (F.)

More than half a million Americans are going to be homeless this coming holiday season. Despite seven years of steady progress and decline, the homeless population has now increased slightly for the second year running. A report from the Department of Housing and Urban Development has found that just under 553,000 people are homeless, with approximately 65% staying in sheltered accommodation. Out of every 10,000 people in the United States, 17 experienced homelessness on a single night in 2018.

Half of all people experiencing homelessness are in one of five states – California (129,972 people), New York (91,897), Florida (31,030), Texas (25,310) and Washington (22,304). Unsurprisingly, the problem is far more visible in urban areas and over half of all homeless people live in one of the country’s 50 largest cities. In fact, nearly a quarter of all people sleeping rough did so in either New York or Los Angeles. The Big Apple has one of the lowest levels of unsheltered homeless at 5% while in Los Angeles, 75% of people were found in unsheltered locations.

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Some serious money was lost. But no-one will admit it.

Dow Dives 400 Points To End Its Worst Week In 10 Years (CNBC)

Stocks plunged again on Friday, sending the Dow Jones Industrial Average to its worst week since the financial crisis in 2008, down nearly 7 percent. The Nasdaq Composite Index closed in a bear market and the S&P 500 was on the brink of one itself, down nearly 18 percent from its record earlier this year. The Federal Reserve’s rate hike on Wednesday drove the losses this week and fears of an extended government shutdown only added to the pain on Friday. The Dow Jones Industrial Average fell 414.23 points to finish at 22,445.37 in turbulent trading that sent the blue-chip index up as much as 300 points earlier in the day, only to trade back in negative territory less than one hour later.

The initial rally upward on Friday came as Federal Reserve Bank of New York President John Williams told CNBC that the central bank could reassess its interest rate policy and balance sheet reduction in the new year if the economy slows. But those gains slowly disappeared as investors used that short-term pop as a chance to sell more. The broader S&P 500 fell 2.1 percent on Friday to close at 2,416.58, while the tech-heavy Nasdaq Composite shed 2.99 percent to 6,332.99 with big losses in technology stocks including Facebook, Amazon and Apple. Stocks accelerated to their lows after President Donald Trump’s trade adviser, Peter Navarro, told Nikkei that it would be “difficult” for the U.S. and China to arrive at a permanent economic agreement after a 90-day ceasefire in the trade tensions.

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Yeah, first you kill the markets and then you listen to them. Makes a lot of sense.

NY Fed President John Williams: Central Bank Is Listening To The Market (CNBC)

New York Federal Reserve President John Williams told CNBC on Friday that the central bank is listening “very carefully” to the market’s concerns on growth, but believes the U.S. economy is in good shape. Fed Chairman Jerome Powell and other central bank leaders are moving to more data dependency, Williams said, which includes listening to people in financial markets as well as local businesses. “We are listening very carefully to what’s happening in markets for two reasons. One is financial conditions have [an] important influence on [the] economic outlook,” Williams said on “Squawk on the Street” in an interview with CNBC’s Steve Liesman.

“Second, I think we are hearing something important from markets, and that is a concern risk to the economy and potential further slowdown than we currently expect in our base case.”It’s not just looking at the “hard GDP data” or “CPI data,” he added. “We’re listening to the message of the market.” Williams appeared on CNBC after the Fed on Wednesday raised its benchmark interest rate for a fourth time this year and lowered its rate hike projection for 2019 from three to two. He said Friday that this week’s rate increase was “fully justified and makes sense,” but he added the Fed is open to reconsidering its views on rate hikes next year. Stocks rose sharply during Friday’s interview, but then faded.

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Nothing better to do for Christmas.

Shutdown Begins As Trump, Democrats Wrestle Over Border Wall (ZH)

The US government has been partially shut down for the third time this year after Congress failed to agree on a comrpomise path forward as lawmakers continued to negotiate over funding for President Trump’s border wall. Senate negotiators from both parties agreed to keep talking in search of a spending deal as the House and Senate adjourned Friday night without an agreement to avoid at least a partial shutdown starting at midnight Earlier in the day, Trump scuttled an agreement that would have kept the government open until February after coming under heavy criticism from conservative talk show hosts and allies in the House because the measure didn’t include the $5 billion he wanted for the wall. According to Bloomberg, negotiations between the White House and Democrats went on late into Friday night.

Trump’s emissaries were Vice President Mike Pence, White House budget director Mick Mulvaney and senior adviser Jared Kushner, who shuttled between private meetings with lawmakers on Capitol Hill. And while negotiations to resolve the impasse are underway, it was unclear if parts of the government will remain shuttered for days or weeks as many expect a protracted fight with both side having dug in. Ending the shutdown which affects nine of 15 federal departments and dozens of agencies, requires Democratic leaders and Trump to reach a compromise, which so far has been elusive as both sides hardened their positions. The House and Senate are scheduled to convene at noon on Saturday, but lawmakers were told they’ll be given 24 hours notice of any planned votes.

The failure of elected officials to keep the government fully operating caps a chaotic week in Washington, during which Trump announced a withdrawal of all U.S. forces from Syria, a draw-down of U.S. forces in Afghanistan, and the resignation of Defense Secretary Jim Mattis. Senator Richard Shelby of Alabama, chairman of the Appropriations Committee, said Republicans made an offer on a funding measure and were waiting for a response from Senate Democratic leader Chuck Schumer of New York. “I am hopeful,” he said of the negotiations. “We’ve made some overtures.” Talks revolved around providing less money for border barriers and more restrictions than Trump initially demanded, however the president was said to balk at anything less than the $5 billion he demanded.

https://twitter.com/realDonaldTrump/status/1076239448461987841/photo/1

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“The USA is worse than broke. It’s down to liquidating its rehypothecated hypotheticals.”

A Fretful Holiday (Kunstler)

The stopgap spending bill before congress — to avert a government shut-down — is based on the comical idea that the money is actually there to spend. Everyone with half a brain knows that it’s not money but “money,” a hypothetical abstraction composed of hopes and wishes. The USA is worse than broke. It’s down to liquidating its rehypothecated hypotheticals. After all, financialization added up to money with its value removed. The global credit markets seem to be sensing this as the tide of borrowings retreats, exposing all the wretched, slimy creatures wheezing in the exposed mudflats who have no idea how to service their old loans or generate credible new ones. But, no matter. We’ll continue pretending until the US$ flies up its own cloacal aperture and vanishes.

Contingent on that exercise is “money” for Mr. Trump’s promised-and-requested border wall. The wall is really a symbol for the nation’s unwillingness to set a firm policy on immigration. Half of the political spectrum refuses to even make a basic distinction between people who came here legally and those who snuck in and broke the law. They’ve super-glued themselves to that position not on any plausible principle, but because they’re desperate to corral Hispanic votes — and notice how eager they are to get non-citizens on the voting rolls. Their mouthpiece, The New York Times, even ran an op-ed today, None of Us Deserve Citizenship, (is that even grammatical?) arguing that we should let everybody and anybody into the country because of our longstanding wickedness.

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This scares me: “substantially increase the size of local government special bonds..”

Chinese Leaders Promise Tax Cuts To Boost Flagging Economic Growth (CNBC)

China’s top leaders have ended a vital economic meeting with a fiscal pledge to support economic growth next year. According to state media, Beijing policymakers will keep liquidity “ample” and cut taxes on a bigger scale in a bid to keep 2019 growth within a “reasonable range.” The world’s second-largest economy grew at 6.5 percent year-on-year in the third quarter of 2018, marking the weakest pace since the global financial crisis in 2008. “The pro-active fiscal policy should enhance efficiency, implement larger-scale tax cuts and fee reductions, and substantially increase the size of local government special bonds,” Xinhua said in a translation provided by Reuters. The media outlet added that a “prudent monetary policy should be neither too loose nor too tight, keeping liquidity reasonable ample.”

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Goldman blames a bunch of Malaysian government-related guys.

Goldman Sachs Facing Class Action Lawsuits Over 1MDB Scandal (G.)

Goldman Sachs has been hit with two class action lawsuits on behalf of investors who claim they were misled over the bank’s involvement in the 1MDB scandal. Two separate cases have been filed at district court in New York over the past 48 hours by Pomerantz LLP and Rosen Law Firm. They allege that Goldman Sachs failed to disclose its dealings in a fraud and money laundering scheme around the Malaysian state development fund to investors, who bought shares between 2014 and 2018. The bank’s share price has fallen 29% since early November, when reports started to link it with closer involvement in the scandal.

News reports claimed Lloyd Blankfein, who was the CEO and is now chairman of Goldman Sachs, held initial meetings with Malaysian financier Jho Low, who has been accused of masterminding the fraud. Pomerantz and Rosen Law Firm have not disclosed how much they are seeking in damages through their respective class action suits. Goldman Sachs said in a statement: “The 1MDB bond offerings were meant to raise money to benefit Malaysia; instead, a huge portion of those funds were stolen for the benefit of members of the Malaysian government and their associates. The lawsuits are without merit and we intend to vigorously contest them.”

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What Corbyn would do an interview with Guardian I don’t know. They happily smeared him as an anti-Semite not long ago. And report he said Stupid Woman.

Corbyn: Brexit Would Go Ahead Even If Labour Won Snap Election (G.)

Jeremy Corbyn has defiantly restated Labour’s policy of leading Britain out of the European Union with a refashioned Brexit deal, shrugging off intense pressure from Labour MPs and activists for the party to throw its weight behind a second referendum. The Labour leader insisted that even if his party won a snap general election in the new year, he would seek to go to Brussels and try to secure a better deal – if possible, in time to allow Brexit to go ahead on 29 March. “You’d have to go back and negotiate, and see what the timetable would be,” he said. [..]

Twenty-four hours after the furore in the House of Commons in which he was accused of insulting the prime minister, the Labour leader appeared much more relaxed on a visit to the Hope Centre, a homelessness charity in Northampton whose campaign against eviction he is supporting. He admitted he had lost his temper when confronted with a wall of jeering Conservative MPs at prime minister’s questions after May had accused him of lacking a clear Brexit policy. “I was extremely angry: the last point I’d made was, they’d suddenly found £4bn to prepare for no deal. £4bn. At the same time, police officers have lost their jobs; 100,000 vacancies in the NHS, a housing crisis; a homeless man dies on the steps of Westminster; and she and the Conservative party turned the whole thing into some pantomime joke,” he said.

Conservative MPs challenged Corbyn’s claim that he muttered “stupid people” and not “stupid woman”, as many viewers of video footage believed. But he was unrepentant. “It’s interesting their sudden concern about these matters. Where is their concern about the homeless people of this country?” he said, repeatedly jabbing a finger on the table to emphasise his point. “Where is their concern about universal credit? Where is their concern about 200,000 children living in poverty in this country?” [..] As to what stance Labour would take if a referendum were held, Corbyn said, “it would be a matter for the party to decide what the policy would be; but my proposal at this moment is that we go forward, trying to get a customs union with the EU, in which we would be able to be proper trading partners.”

And he struck a distinctly Eurosceptic note by again highlighting Labour’s concerns about the state aid rules that form part of the architecture of the single market. “I think the state aid rules do need to be looked at again, because quite clearly, if you want to regenerate an economy, as we would want to do in government, then I don’t want to be told by somebody else that we can’t use state aid in order to be able to develop industry in this country,” he said.

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The Guardian ignores all evidence it makes up entire reports, the Spiegel tries to make it look like it was just one bad apple (and no-one had a clue for 7 years).

But they both play the same game. And its name is not Truth.

Der Spiegel To Run 23-Page Special On Reporter Who Faked Stories (AFP)

The German news weekly Der Spiegel is to publish a 23-page special report on how one of its award-winning reporters faked stories for years and dealt a blow to media credibility. Claas Relotius, 33, resigned after admitting making up stories and inventing protagonists in more than a dozen articles in the magazine’s print and online editions. Since the scandal was revealed by the magazine on Wednesday, other mainstream German outlets including Die Welt and Die Zeit, which once used Relotius as a freelancer, have also begun poring through articles that he wrote for them.

“Tell it like it is,” wrote Der Spiegel on its latest magazine cover page, in an allusion to the publication’s motto coined by its founder, Rudolf Augstein, that also hangs at the entrance of its headquarters in Hamburg. In its editorial, the magazine said the scam, involving subjects including Syrian orphans and a Holocaust survivor, was the “worst thing that can happen to an editorial team”. It also apologised for the mistake and promised to “do everything to boost our credibility again”.

[..] Der Spiegel said it was “lucky that one of our employees managed to uncover this case”. But for others, the damage was already done, particularly at a time when disinformation campaigns are posing a constant challenge to the credibility of the mainstream media. “The losers are all the journalists in the country who carry out their research in difficult or dangerous circumstances, as well as members of the editorial teams, who check through texts for quality and accuracy,” said Süddeutsche Zeitung in an editorial. It noted that politicians in the far-right party Alternative für Deutschland (AfD) had seized on the case as “evidence of the dysfunctionality of the quality media”.

The AfD, whose supporters often attack the mainstream media as the “lying press”, has been openly gloating over the scandal. One of its MPs, Götz Frömming tweeted: “Ironically, the Spiegel – the self-claimed leading media outlet that likes to slag off Trump, AfD and Co., has been for years delivering the best FakeNews via Relotius.” The public broadcaster Deutsche Welle appealed to people not to condemn all mainstream media because of the “dangerous, isolated case”. It said: “Before him there have also been other fraudsters who have fuelled the accusation of a lying press. But THE lying press doesn’t exist. Most of us are honestly, sincerely doing our work to give children like Alin and Ahmed from Aleppo a voice.”

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shoppinglist.wikileaks.org

WikiLeaks Exposes US Embassies Stockpiling Spy Gear (RT)

US embassies abroad have been buying spying tools, papers released by WikiLeaks show. The documents revealed that one embassy has ordered almost 100 spy cams masked as ties, caps, pens, buttons and watches. The US Embassy Shopping List, a collection of over 16,000 procurement requests filed by US embassies around the globe, was published by WikiLeaks on Friday, a day after a targeted DDoS attack briefly disabled all of its Twitter accounts. Although the trove of quotation requests are more of an open secret, since they are considered public information, WikiLeaks created a searchable database listing even those procurement documents that are no longer linked on the embassies’ websites.

While the bulk of the documents appear to be routine requests for janitor or carpenter services, or, in the case with the US embassy in Moscow, to plant summer flowers at the ambassador’s residence, some hint at the existence of secretive surveillance operations. For instance, in August, the US embassy in El Salvador requested a curious list of items to be procured by a responsible vendor, tellingly described as “tactical spy equipment.” The list includes 94 spying devices, masquerading as everyday objects, including nine pens, 11 lighters, 11 shirt buttons, 12 watches and 12 pairs of glasses, as well as more conventional tools such as hidden cameras and binoculars.

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Reuters is pretty much useless on the topic.

UN Tells UK: Allow Assange To Leave Ecuador Embassy Freely (R.)

U.N. rights experts called on British authorities on Friday to allow WikiLeaks founder Julian Assange to leave the Ecuador embassy in London without fear of arrest or extradition. The U.N. Working Group on Arbitrary Detention reiterated its finding published in February 2016 that Assange had been de facto unlawfully held without charge in the embassy, where he has now been holed up for more than six years. He initially took asylum to avoid being extradited to Sweden, where authorities wanted to question him as part of a sexual assault investigation. That investigation was dropped.

Assange, whose website published thousands of classified U.S. government documents, denied the Sweden allegations, saying the charge was a ploy that would eventually take him to the United States where a prosecutors are preparing to pursue a criminal case against him. Britain says Assange will be arrested for skipping bail if he leaves the embassy, but that any sentence would not exceed six months, if convicted. It had no immediate comment on the experts’ call, but in June, foreign office minister Alan Duncan said Assange would be treated humanely and properly.

“… the only ground remaining for Mr. Assange’s continued deprivation of liberty is a bail violation in the UK, which is, objectively, a minor offence that cannot post facto justify the more than six years confinement that he has been subjected to since he sought asylum in the Embassy of Ecuador,” the U.N. experts said in a statement. “It is time that Mr. Assange, who has already paid a high price for peacefully exercising his rights to freedom of opinion, expression and information, and to promote the right to truth in the public interest, recovers his freedom,” they said.

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RT does this much better than Reuters.

UN Experts Call For Assange’s Release As He Loses Last Appeal Over Rules (RT)

A UN-endorsed team of experts has urged London to “immediately” allow WikiLeaks co-founder Julian Assange to leave the Ecuadorian Embassy, as the court of last resort denied his appeal over a newly imposed set of ‘censure’ rules. Seong-Phil Hong, chair-rapporteur of the Working Group on Arbitrary Detention, and Michel Forst, special rapporteur on the situation of human rights defenders, reiterated calls for the UK to abide by international law and allow Assange to leave the Ecuadorian Embassy without any precondition.

“It is time that Mr Assange, who has already paid a high price for peacefully exercising his rights to freedom of opinion, expression and information, and to promote the right to truth in the public interest, recovers his freedom,” the UN experts demanded in a statement on Friday. The experts argued that “pre-trial detention must be only imposed in limited instances,” adding that the charges Assange faces in the UK for skipping his bail while applying for asylum cannot justify his six years within the embassy’s walls. Assange became holed up in the Ecuadorian Embassy in London in 2012 after being granted asylum by then-Ecuadorian president Rafael Correa. Assange, who was in the UK at the time, was unable to go to the airport for fear of being arrested and handed over to the US, where he is wanted for exposing diplomatic and military secrets, and has had to stay in the embassy since.

[..] Despite the UN experts’ support, Assange suffered a setback with the Ecuadorian justice system. On Friday, Pichincha Provincial Court reaffirmed a decision by a lower court to throw out his appeal against a new set of house rules. The rules laid out in a special protocol in October restricted Assange’s visitation rights, made him refrain from political statements, pay his own medical bills, and take better care of his cat. Shortly after the regulation was imposed, Assange gave the cat away, with reports circulating that he has become virtually isolated in the embassy after all the staff he had personally known left.

Speaking before the court via a video-link last week, Assange warned that the new rules would “inevitably lead to a health crisis for me, resulting in my death or hospitalization or a political excuse to illegally hand me over to the British, and therefore to the United States, where I face a potential life sentence.” In late October, a judge rejected his request to change the protocol, arguing that the government has the right to impose any rules it wants inside the premises. Assange’s lawyer Carlos Poveda admitted that the whistleblower is stuck with the rules since all legal options to revise them have been “exhausted.”

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“The risks are greater than assumed..” is starting to sound old. Preaching to the long converted.

Risks Of ‘Domino Effect’ Of Tipping Points Greater Than Thought (G.)

Policymakers have severely underestimated the risks of ecological tipping points, according to a study that shows 45% of all potential environmental collapses are interrelated and could amplify one another. The authors said their paper, published in the journal Science, highlights how overstressed and overlapping natural systems are combining to throw up a growing number of unwelcome surprises. “The risks are greater than assumed because the interactions are more dynamic,” said Juan Rocha of the Stockholm Resilience Centre. “The important message is to recognise the wickedness of the problem that humanity faces.”

The study collated existing research on ecosystem transitions that can irreversibly tip to another state, such as coral reefs bleaching and being overrun by algae, forests becoming savannahs and ice sheets melting into oceans. It then cross-referenced the 30 types of shift to examine the impacts they might have on one another and human society. Only 19% were entirely isolated. Another 36% shared a common cause, but were not likely to interact. The remaining 45% had the potential to create either a one-way domino effect or mutually reinforcing feedbacks.

[..] Until recently, the study of tipping points was controversial, but it is increasingly accepted as an explanation for climate changes that are happening with more speed and ferocity than earlier computer models predicted. The loss of coral reefs and Arctic sea ice may already be past the point of no return. There are signs the Antarctic is heading the same way faster than thought. Co-author Garry Peterson said the tipping of the west Antarctic ice shelf was not on the radar of many scientists 10 years ago, but now there was overwhelming evidence of the risks – including losses of chunks of ice the size of New York – and some studies now suggest the tipping point may have already been passed by the southern ice sheet, which may now be releasing carbon into the atmosphere.

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Dec 202018
 


Giovanni Bellini Madonna and Child with St. John the Baptist and Female Saint 1500-04

 

It’s 100 days to Brexit (Ind.)
Powell Breaks The Market (ZH)
A Major Technical Breakdown Just Occurred In Stocks (Colombo)
Peter Schiff : Not A Bear Market But ‘A House Of Cards The Fed Built’ (MW)
Asian Shares Battered After Fed Raises Rates For Fourth Time (G.)
Short-Term Funding Bill Announced To Stop Trump’s Government Shutdown (Ind.)
Trump Plans Full Withdrawal Of US Troops From Syria (AFP)
Don’t Hold Your Breath on US Troop Withdrawal from Syria (CN)
US Occupation of Middle East Doesn’t Suppress Terrorism, It Causes It (Murray)
Big Pharma Returning To US Price Hikes In January After Pause (R.)
Italy Avoids EU Sanctions After Reaching 2019 Budget Agreement (G.)
French Police Threaten To Join Protesters (NW)
London’s Gatwick Airport Shut Down After Drones Spotted Overhead (AP)
Der Spiegel Says Top Journalist Faked Stories For Years (G.)
Finless Porpoise, China’s Smiling Angel, Fights To Survive (AFP)

 

 

Yes it is. And so of course the UK talked about one thing only. Did Corbyn call Theresa May a ‘stupid woman’ or did he say ‘stupid people’ about a group of Tories, as a whole contingent of lipreaders claimed?

They sure know what’s important, and what not.

It’s 100 days to Brexit (Ind.)

The vote of the House of Commons on the Brexit deal will now be in the week beginning 14 January, the prime minister confirmed on Monday. She hopes that her MPs are slowly coming round to the deal as the least worst option. She may also hope that Jeremy Corbyn gives his MPs a free vote, in which case enough of them may vote for her deal as a way of avoiding another referendum. It still seems more likely that Theresa May will lose, in which case the Brexit timetable will slip further. She would probably then ask the Commons to vote again after it had rejected the other options.

The one that is easiest to eliminate would be that of leaving the EU without a deal, even if it were dressed up as a “managed no deal” – at least, it ought to be easy to eliminate this option, but, until all the hoops have been jumped through, a no-deal Brexit remains the default, which is why there was such a fuss about no-deal planning at yesterday’s cabinet. The more difficult course for parliament to rule out is that of postponing Brexit and holding a referendum. If Corbyn backs a final say referendum, a Commons vote could be close, but, if May can defeat that option, she could then ask MPs to vote again on her deal. That seems to be her plan: to wear parliament down. That way she might finally win the vote at a second attempt a week later, in the week beginning 21 January – or even after that.

By then, the country would be running out of time to complete Brexit by 29 March. The problem is that a vote to approve the deal, important though it is, is only one of the things that need to be done to take us out of the EU. Once the deal has been approved, parliament also has to pass legislation to give effect to the withdrawal agreement in UK law. This will be called the EU (Withdrawal Agreement) Bill – yet another bill that sounds similar to all the others. It will be a complex and contentious bill that will be tricky to get through a hung parliament. In particular, it will contain a mechanism to entrench parts of the withdrawal agreement in UK law and make it hard for future parliaments to change them.

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Well, not really. Powell and his predecessors built such a huge zombie that it can’t be called a market. So he’s not breaking a market but a zombie, and how exactly can that be a bad thing?

Powell Breaks The Market (ZH)

“Everything was awesome” and then Jay Powell said… Some years ago, we took away the lesson that the markets were very sensitive to news about the balance sheet, so we thought carefully about how to normalize it and thought to have it on automatic pilot, and use rates to adjust to incoming data. That has been a good decision, I think, I don’t see us changing that…. we don’t see balance sheet runoff as creating problems” And everything broke…

Overnight futures show hopeful buying – “surely The Fed will deliver and capitulate… for goodness sake, someone has to rescue my FANG portfolio!!??” – But The Fed did not – cutting their rate outlook by a mere one hike, with plenty still seeing 3 hikes ahead in 2019…

The market now expects 18bps of RATE CUTS in 2020!!!

And Futures collapsed…

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Same here with my buddie Jesse: comparing what happens with today’s zombie, with functioning markets of the past, is dangerous and of limited value.

A Major Technical Breakdown Just Occurred In Stocks (Colombo)

The much-anticipated December Fed meeting has finally come and gone, and the stock market did not like what it heard. The Fed raised rates by 0.25% and cut its expectation for 2019 rate hikes from three to two. Because the Fed didn’t sound as dovish as many investors would have liked, the S&P 500 promptly fell 1.54% to a fresh 2018 low. From a technical perspective, today’s action is extremely concerning because the S&P 500 broke the key 2,550 to 2,600 support zone that I’ve been showing for the past couple months. Today’s breakdown increases the probability of further bearish action unless the index somehow manages to close back above that zone.

The longer-term S&P 500 chart shows how critical today’s breakdown is. Today’s breakdown is the second important technical breakdown in recent months (the first one being the break below the trendline that formed in early-2016, which I said was a bad omen). Assuming today’s breakdown remains intact, 2,100 (the 2015 and 2016 highs) is the next price target and support level to watch.

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Peter Schiff appears to agree with me, only he calls it a house of cards, not a zombie.

Peter Schiff : Not A Bear Market But ‘A House Of Cards The Fed Built’ (MW)

Where in the world is Peter Schiff, as the stock market entered an apparent unraveling phase? Find the chief executive of Euro Pacific Capital, a longtime gold bug and market pundit, on a beach in Puerto Rico, where he’s taken up residence as he watches the equity market get rocked. “I’m watching the U.S. economy implode from the beach,” Schiff told MarketWatch during a recent phone interview. “We’re in a lot of trouble,” he said. “This isn’t a bear market, we’re in a house of cards that the Fed built,” he said. Indeed, despite recent attempts to rebound, the Dow Jones is on track for its worst year since 2008 — down by about 3.5% — when the financial crisis brought global markets to their knees, according to Dow Jones Market Data.

The same goes for the S&P 500 which would also notch its worst year in a decade, if its roughly 4% decline thus far this year hold. Schiff is a polarizing figure on Wall Street, a man that critics say has harbored a persistent and unrealized post-crisis narrative for the Fed’s monetary policy, with predictions of soaring inflation and a dollar collapse. However, the prominent investor should be worthy of investors’ attention, on the back of his prescient calls ahead of the 2008 financial crisis, which earned him plaudits as one of the few able to spot a global economic crisis emanating from the housing market.

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“The Fed’s been a huge friend of the stock market and they are now a little bit of an enemy and will probably become worse of an enemy..”

Asian Shares Battered After Fed Raises Rates For Fourth Time (G.)

Asian stock markets have taken a battering after the US Federal Reserve voted to raise borrowing costs for the fourth time this year, signalling a further squeeze on liquidity around the world. In Tokyo, the Nikkei closed down nearly 3% to its lowest point for 14 months as the Fed’s pledge to continue with “gradual” rate hikes next year sent shivers through financial markets. Shares in Hong Kong and Seoul were both down more than 1% while stocks in Sydney finished at a two-year low. Futures trading pointed to a drop of 2% in the FTSE100 index in London and the Dax in Frankfurt when when the markets open on Thursday morning.

Investors’ confidence that the global economy is headed for a significant slowdown was further weakened when China’s central bank introduced a new lending facility for small private businesses, which was seen as a targeted rate cut designed to kickstart the spluttering economy. The move by the People’s Bank of China shows the two biggest economies are out of step with Beijing responding to a rate hike in the US with a de facto cut. The Shanghai Composite share index was down nearly 1% in afternoon trade while the yuan wad fixed 0.22% lower against the US dollar. [..] “The Fed’s been a huge friend of the stock market and they are now a little bit of an enemy and will probably become worse of an enemy before this is all over,” Bob Doll, Nuveen chief equity strategist and senior portfolio manager, told Bloomberg.

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McConnell saves the day…

Short-Term Funding Bill Announced To Stop Trump’s Government Shutdown (Ind.)

Senate Majority Leader Mitch McConnell has introduced a short-term spending bill to finance the US government and avoid a shutdown at the end of the week Mr McConnell, the leading Republican in the Senate, said that the funding bill known as a continuing resolution “will ensure continuous funding for the federal government” until 8 February. The short-term bill needs to be approved by both the Senate and the House of Representatives before it can proceed to President Donald Trump’s desk to be signed into law. Mr McConnell’s bill comes as Congress races against time before funding for the government runs out on Friday at midnight, amid a contentious push by Mr Trump to make $5bn worth in funding for his controversial border wall a requirement for any spending agreement.

But, while Mr Trump had indicated that he would take responsibility for a shutdown in order to make a point about the wall, the White House has since stepped back from that threat. We have other ways that we can get to that $5 billion”, White House Press Secretary Sarah Huckabee Sanders said on Tuesday. On the Senate floor, Mr McConnell lashed out at Democrats, who will reclaim their House majority in January, for failing to give Mr Trump any of the $5bn he has asked for. “This seems to be the reality of our political moment,” Mr McConnell said. “It seems like political spite for the president may be winning out over sensible policy.”

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We’re going to see endless and contradictory ‘analyses’ of this. It’s already drawn out the likes of Lindsey Graham and Mario Rubio and exposed them as deep state soldiers.

Trump Plans Full Withdrawal Of US Troops From Syria (AFP)

The United States will withdraw its troops from Syria, a US official told AFP on Wednesday, after President Donald Trump said America has “defeated ISIS” in the war-ravaged country. The stunning move will have extraordinary geopolitical ramifications and throws into question the fate of US-backed Kurdish fighters who have been tackling Islamic State jihadists. “We have defeated ISIS in Syria, my only reason for being there during the Trump Presidency,” the Republican president tweeted. The US official told AFP that Trump’s decision was finalized Tuesday. “Full withdrawal, all means all,” the official said when asked if the troops would be pulled from all of Syria.

Currently, about 2,000 US forces are in Syria, most of them on a train-and-advise mission to support local forces fighting IS. The official would not provide a timeline for a withdrawal, saying only: “We will ensure force protection is adequately maintained, but as quickly as possible.” Echoing Trump, White House spokeswoman Sarah Sanders said IS has been defeated territorially, noting the US-led coalition that includes dozens of nations would continue fighting IS. “These victories over ISIS in Syria do not signal the end of the Global Coalition or its campaign,” Sanders said in a statement. “We have started returning United States troops home as we transition to the next phase of this campaign.”

[..] Republican Senator Lindsey Graham, a Trump ally, said the president’s decision was shortsighted. “President @realDonaldTrump is right to want to contain Iranian expansion,” Graham said on Twitter. “However, withdrawal of our forces in Syria mightily undercuts that effort and put our allies, the Kurds at risk.” Charles Lister, a senior fellow at the Middle East Institute, called the decision “extraordinarily short-sighted and naive.” “This move will look like a ‘withdrawal,’ not a ‘victory,’ and yet more evidence of the dangerous unpredictability of the US president,” Lister said. “This is not just a dream scenario for ISIS, but also for Russia, Iran and the Assad regime, all of whom stand to benefit substantially from a US withdrawal.”

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It is quite possible that the deep state will eventually swallow Trump’s announcement whole. However, if he had gone through the usual channels to make his announcement, they would have caught it before it became public. That’s why he has Twitter.

Don’t Hold Your Breath on US Troop Withdrawal from Syria (CN)

The announcement on Wednesday that the U.S. will withdraw all remaining troops from Syria within the next month looked at first like a rare victory for Donald Trump in his admittedly erratic opposition to senseless wars of adventure. “We have defeated ISIS in Syria, my only reason for being there,” the president tweeted with an unmistakable air of triumph. Don’t get your hopes up. Just about everything in these initial reports is either wrong or misleading. One, the U.S. did not defeat the Islamic State: The Syrian Arab Army, aided by Russia, Iran, and Hezbollah militias did. Two, hardly was ISIS the only reason the U.S. has maintained a presence in Syria. The intent for years was to support a coup against the Assad government in Damascus—in part by training and equipping jihadists often allied with ISIS.

For at least the past six months, the U.S. military’s intent in Syria has been to counter Iranian influence. Last and hardly least, the U.S. is not closing down its military presence in Syria. It is digging in for an indefinite period, making Raqqa the equivalent of the Green Zone in Baghdad. By the official count, there are 503 U.S. troops stationed in the Islamic State’s former capital. Unofficially, according to The Washington Post and other press reports, the figure is closer to 4,000—twice the number that is supposed to represent a “full withdrawal” from Syrian soil. It would be nice to think Washington has at last accepted defeat in Syria, given it is preposterous to pretend otherwise any longer.

Damascus is now well into its consolidation phase. Russia, Iran, and Turkey are currently working with Staffan de Mistura, the UN’s special envoy for Syria, to form a committee in January to begin drafting a new Syrian constitution. It would also be nice to think the president and commander-in-chief has the final say in his administration’s policies overseas, given the constitution by which we are supposed to be governed. But the misleading announcement on the withdrawal of troops, followed by Trump’s boastful tweet, suggest something close to exactly the opposite. As Trump finishes his second year in office, the pattern is plain: This president can have all the foreign policy ideas he wants, but the Pentagon, State, the intelligence apparatus, and the rest of what some call “the deep state” will either reverse, delay, or never implement any policy not to its liking.

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The Grand Coalition includes the media.

US Occupation of Middle East Doesn’t Suppress Terrorism, It Causes It (Murray)

Even the neo-con warmongers’ house journal The Guardian, furious at Trump’s attempts to pull US troops out of Syria, in producing a map to illustrate its point, could only produce one single, uncertain, very short pen stroke to describe the minute strip of territory it claims ISIS still control on the Iraqi border. Of course, the Guardian produces the argument that continued US military presence is necessary to ensure that ISIS does not spring back to life in Syria. The fallacy of that argument can be easily demonstrated. In Afghanistan, the USA has managed to drag out the long process of humiliating defeat in war even further than it did in Vietnam.

It is plain as a pikestaff that the presence of US occupation troops is itself the best recruiting sergeant for resistance. In Sikunder Burnes I trace how the battle lines of tribal alliances there today are precisely the same ones the British faced in 1841. We just attach labels like Taliban to hide the fact that invaders face national resistance. The secret to ending the strength of ISIS in Syria is not the continued presence of American troops. It is for America’s ever closer allies in Saudi Arabia and the Gulf to cut off the major artery of money and arms, which we should never forget in origin and for a long time had a strong US component. The US/Saudi/Israeli alliance against Iran is the most important geo-political factor in the region today.

It is high time this alliance stopped both funding ISIS and pretending to fight it; schizophrenia is not a foreign policy stance. There has been no significant Shia Islamic terrorist or other threat against the West in recent years. 9/11 was carried out by Saudi Sunni militants. Al Qaida, ISIS, Al Nusra, Boko Haram, these are all Sunni groups, and all Saudi sponsored. It is a matter of lunacy that the West has adopted the posture that it is Iran – which has sponsored not one attack on the West in recent memory – which is the threat in the Middle East.

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Trump will have to act, or risk looking like a fool.

Big Pharma Returning To US Price Hikes In January After Pause (R.)

Novartis and Bayer are among nearly 30 drugmakers that have taken steps to raise the U.S. prices of their medicines in January, ending a self-declared halt to increases made by a pharma industry under pressure from the Trump administration, according to documents seen by Reuters.The hikes will pose a new challenge to President Donald Trump’s pledge to lower the costs of prescription medications in the world’s most expensive pharmaceutical market. The U.S. Department of Health and Human Services (HHS) has proposed a slew of policies aimed at lowering prices and passing more of the discounts negotiated by health insurers on to patients.

Those measures are not expected to provide relief to consumers in the short-term, however, and fall short of giving government health agencies direct authority to negotiate or regulate drug prices. 28 drugmakers filed notifications with California agencies in early November disclosing that they planned to raise prices in 60 days or longer. Under a state law passed last year, companies are required to notify payers in California if they intend to raise the U.S. list price on any drug by more than 16 percent over a two-year period. [..] “Requests and public shaming haven’t worked” to lower drug prices, said Michael Rea, chief executive of RX Savings Solutions, which helps health plans and employers seek lower cost prescription medicines. “We expect the number of 2019 increases to be even greater than in past years.”

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I think Salvini will get away with presenting this as a victory. But I may be wrong. How far removed is it from what Tsipras pulled in summer 2015? And how much is it like Macron and the yellow vests?

Italy Avoids EU Sanctions After Reaching 2019 Budget Agreement (G.)

Italy has managed to avert EU sanctions after reaching a compromise with the European commission over its 2019 budget. The Italian prime minister, Giuseppe Conte, said the government had managed to reach an agreement to reduce the deficit target to 2.04% of GDP from 2.4%. This has been achieved without making drastic changes to key budget proposals such as the promise of a universal basic income and lowering the pension age. “Over the last few weeks we worked to bring the positions closer without ever moving backwards with respect to the objectives the Italian people set us in the 4 March election,” Conte said.

“The economic-financial estimates about the measures that attracted the most attention of our European partners revealed that the resources [needed] were less than forecast.” The yield, or effective interest rate, on Italian 10-year government bonds fell to 2.79%, the lowest level since September. Less than two months ago the yield, the price the Italian government has to pay to borrow, rose to 3.8%. However, Valdis Dombrovskis, a European commission vice-president, described the agreement with Italy as a “borderline compromise” that fails to provide long-term solutions to the country’s economic problems. “But it enables us, for now, to avoid opening a debt procedure, as long as the negotiated measures are fully applied,” he said at a press conference in Brussels.

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Hilarious: “Police have accumulated some 23 million hours of overtime that is yet to be paid.”

French Police Threaten To Join Protesters (NW)

The French government is desperately trying to keep its exhausted police force onside following weeks of violent protests demanding economic reforms, improved living standards and the resignation of President Emmanuel Macron. On Wednesday, French officials met with police trade union leaders to work out a deal to soothe anger in law enforcement ranks regarding overwork, unpaid overtime and difficult working conditions, Le Monde reported. But some activists are calling on police to walk out on government negotiations, close down police stations and join the “gilets jaunes”—or yellow vest—protesters with whom they have been facing off since November 17. Negotiations between three unions—Alliance, UNSA-Police and Unity-SGP-FO—and Interior Minister Christophe Castaner on Tuesday failed to reach a settlement.

As talks resumed on Wednesday, France 24 reported that activists were calling on forces across the country to commit to a “slowdown” and only respond to emergencies until the dispute had been settled. Police have accumulated some 23 million hours of overtime that is yet to be paid. According to The Local France, police union leader Frédéric Lagache explained, “Faced with this irresponsibility [of the government], we are forced to be irresponsible in our actions.” The Alliance and Unity-SGP-FO unions called for a “black day for the police” on Wednesday. The Alliance is using Twitter and Facebook to rally support for what it calls “Act 1” of the police protests, using the name given to the ongoing demonstrations held by the gilets jaunes. The group has also threatened to hold “Act II” and “Act III” if required.

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I’m thinking one word here: copycats. Too easy not to try at home.

London’s Gatwick Airport Shut Down After Drones Spotted Overhead (AP)

London’s Gatwick Airport shut down late Wednesday while officials urgently investigated reports that two drones were flying above the airfield. The airport suspended all flights, causing severe disruptions just days before Christmas during one of the heaviest travel times of the year. Police and aviation authorities were still investigating early Thursday as incoming flights were diverted to other locations in Britain and nearby countries. Passengers complained on Twitter that their flights had landed at London Heathrow, Manchester, Birmingham and other cities. Other flights were sent to France and the Netherlands. One traveler whose flight was diverted tweeted that passengers were not being told when they could continue to their destination.

Gatwick advised travelers via Twitter to check flights scheduled for Thursday before heading to the airport. It also advised anyone planning to pick up arriving passengers to check first. Any problem at Gatwick causes a ripple effect throughout Britain and continental Europe, particularly during a holiday period when the air traffic control system is under strain. It is a busy airport 27 miles south of London, hosting a variety of short- and long-haul flights and serving as a major hub for the budget carrier easyJet. Gatwick normally operates throughout the night but the number of flights is restricted because of noise limitations. The airport website says it usually handles 18 to 20 flights overnight during the winter months.

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Yes, it’s priceless to read the Guardian on fake news.

Craig Murray tweets: ..The Guardian today published a story about a German journalist who invented stories, but still has never apologised for its own 100% fabricated Luke Harding piece about Manafort’s “visits to Assange in the Embassy”, and Harding and Viner are still employed..

Der Spiegel Says Top Journalist Faked Stories For Years (G.)

The German news magazine Der Spiegel has been plunged into chaos after revealing that one of its top reporters had falsified stories over several years. The media world was stunned by the revelations that the award-winning journalist Claas Relotius had, according to the weekly, “made up stories and invented protagonists” in at least 14 out of 60 articles that appeared in its print and online editions, warning that other outlets could also be affected. Relotius, 33, resigned after admitting to the scam. He had written for the magazine for seven years and won numerous awards for his investigative journalism, including CNN Journalist of the Year in 2014.

Earlier this month, he won Germany’s Reporterpreis (Reporter of the Year) for his story about a young Syrian boy, which the jurors praised for its “lightness, poetry and relevance”. It has since emerged that all the sources for his reportage were at best hazy, and much of what he wrote was made up. The falsification came to light after a colleague who worked with him on a story along the US-Mexican border raised suspicions about some of the details in Relotius’s reporting, having harboured doubts about him for some time.

The colleague, Juan Moreno, eventually tracked down two alleged sources quoted extensively by Relotius in the article, which was published in November. Both said they had never met Relotius. Relotius had also lied about seeing a hand-painted sign that read “Mexicans keep out”, a subsequent investigation found. Other fraudulent stories included one about a Yemeni prisoner in Guantanamo Bay, and one about the American football star Colin Kaepernick.

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Sometimes I think that if all my friends are leaving, why would I stay behind?

Finless Porpoise, China’s Smiling Angel, Fights To Survive (AFP)

In an oxbow lake along the middle reaches of the Yangtze River, a breathy sigh pierces the surface stillness as one of China’s most endangered animals comes up for a gulp of hazy air. A slick black back with no dorsal fin arches briefly above the water line before plunging back down. Such glimpses of the shy Yangtze finless porpoise, the only aquatic mammal left in China’s longest river and known in Chinese as the “smiling angel” for its perma-grin, are increasingly rare. Pollution, overfishing, hydroelectric dams and shipping traffic have rendered them critically endangered, worse off even than China’s best-known symbol of animal conservation, the panda.


AFP Photo/Johannes EISELE

China’s government estimates there were 1,012 wild Yangtze finless porpoises in 2017, compared to more than 1,800 giant pandas, which is no longer endangered. But researchers see signs of hope. Porpoise numbers fell by nearly half from 2006-2012 to an estimated 1,040. But the rate of decline has slowed markedly since then, suggesting that conservation may be making a dent. A central component of the rescue effort is the introduction of porpoises to several conservation areas off the busy river, where researchers say numbers have been actually increasing. [..] Chinese officials are keen to avoid a repeat of the “baiji”, or Yangtze dolphin, the river’s only other aquatic mammal, which since 2006 has been considered extinct in a huge conservation setback for China. Losing the “smiling angel” would be a further tragedy, conservationists say.

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Feb 092018
 


Horacio Coppola Florida y Bartolomé Mitre, Buenos Aires 1936

 

Dow Plummets 1032 Points, Down 10% From Record; S&P 500 Drops 3.7% (CNBC)
Is The Decades-Long Downtrend In Interest Rates Finally Over? (MW)
US Senate Approves Budget Deal, Too Late To Avert Shutdown (R.)
Stock Market Value Wiped Out Equals $2.5 Trillion And Counting… (CNBC)
The Stock Market Is In Turmoil And It’s Not Likely To End Anytime Soon (CNBC)
Stock, Bond Investors Pay For Fed’s Dangerous Experiment (Katsenelson)
Hong Kong And Mainland China Shares Tank In Global Rout (CNBC)
PBOC Releases Nearly 2 Trillion Yuan In Temporary Liquidity (R.)
50,000 American Bridges Are “Structurally Deficient” (ZH)
Bank Of England Signals An Interest Rate Hike Is Coming (G.)
The Biggest Privatisation You’ve Never Heard Of: Land (G.)
Northern Ireland Will Stay In Single Market After Brexit – EU (G.)
EU’s Moscovici ‘Especially Optimistic’ On Greek Debt Relief (R.)
Greek Pensions Keep Getting Smaller (K.)
Italy Accused Of Subjecting 10,000 Refugees To ‘Deplorable’ Conditions (Ind.)

 

 

Will it be labeled ‘The Olympics Crash’?

Dow Plummets 1032 Points, Down 10% From Record; S&P 500 Drops 3.7% (CNBC)

Stocks fell sharply on Thursday as strong earnings and economic data were not enough to quell jitters on Wall Street about higher interest rates. The Dow Jones industrial average closed 1,032.89 points lower at 23,860.46, entering correction territory. The 30-stock index also closed at its lowest level since Nov. 28. The Dow is also on track to post its biggest weekly decline since October 2008. “This whole correction is really about rates. It’s really about inflation creeping up. It’s really about people thinking the Fed is either behind the curve or actually has to be more aggressive,” Stephanie Link, global asset management managing director at TIAA, told CNBC’s “Closing Bell.” “That fear, that unknown is really what’s driving a lot of the anxiety,” Link said.

This is the third drop for the Dow greater than 500 points in the last five days. Despite the decline Thursday, the average is still a ways from its low for the week hit on Tuesday of 23,778.74. American Express and Intel were the worst-performing stocks in the index, sliding more than 5.4%. J.P. Morgan Chase, meanwhile, was down by more than 4%. The S&P 500 pulled back 3.75% to 2,581, reaching a new low for the week. The index also broke below its 100-day moving average and closed under 2,600, two important thresholds. For the S&P 500, it is its third drop of greater than 2% in the last five days. The Nasdaq composite fell 3.9% to close at 6,777.16 as Facebook, Amazon and Microsoft all fell at least 4.5%.

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That second chart is scary alright.

Is The Decades-Long Downtrend In Interest Rates Finally Over? (MW)

The yield on the benchmark 10-year Treasury note has an effect on all parts of the economy, as it influences everything from borrowing costs for the smallest and biggest companies, to rates for fixed and adjustable mortgages, car loans and credit cards. For three decades, one thing everyone could count on was if you were patient enough, rates would eventually be lower. Not anymore. The scariest thing for investors and consumers is often the unknown. But while some market pundits acknowledge that a “new norm” for rates is in the works, it’s not that rates are expected to spike back up to where they were in the 1980s. Besides, some people, such as those living off a fixed income, should actually welcome the new trend.

T[..] Arbeter Investments president Mark Arbeter: From a “very long-term perspective, yields appear to be tracing out a “massive bottom.” If the 10-year yield gets above the 2013 high of 3.04%, a bullish long-term “double bottom” reversal pattern would be completed, opening the door for an eventual rise toward the 4.75% area. A double bottom, according to the CMT Association, the keepers of the Chartered Market Technician certification, is this: “The price forms two distinct lows at roughly the same price level. For a more significant reversal, look for a longer period of time between the two lows.” The two bottoms Arbeter refers to are the 2012 monthly low of 1.47% and the 2016 low of 1.45%. Arbeter noted that while rates may not yet be ready to soar, equity investors may have reason to be worried. When the yield bumped up against the downtrend line before, as happened in 1987, 1990, 1994, 2000 and 2007, bad things happened on Wall Street.

T[..] Frank Cappelleri, CFA, CMT, executive director of institutional equities at Instinet LLC: In the medium term, he believes the bullish “inverted head and shoulders” reversal pattern that has formed over the last few years suggests a return toward the peaks seen in 2008 through 2010.

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Rand Paul.

US Senate Approves Budget Deal, Too Late To Avert Shutdown (R.)

The U.S. Senate approved a budget deal including a stopgap government funding bill early on Friday, but it was too late to prevent a federal shutdown that was already underway in an embarrassing setback for the Republican-controlled Congress. The shutdown, which technically started at midnight, was the second this year under Republican President Donald Trump, who played little role in attempts by party leaders earlier this week to head it off and end months of fiscal squabbling. The U.S. Office of Personnel Management advised millions of federal employees shortly after midnight to check with their agencies about whether they should report to work on Friday.

The Senate’s approval of the budget and stopgap funding package meant it will go next to the House of Representatives, where lawmakers were divided along party lines and passage was uncertain. House Republican leaders on Thursday had offered assurances that the package would be approved, but so did Senate leaders and the critical midnight deadline, when current government funding authority expired, was still missed. The reason for that was a nine-hour, on-again, off-again Senate floor speech by Kentucky Republican Senator Rand Paul, who objected to deficit spending in the bill. The unexpected turn of events dragged the Senate proceedings into the wee hours and underscored the persistent inability of Congress and Trump to deal efficiently with Washington’s most basic fiscal obligations of keeping the government open.

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The S&P 500 lost $2.49 trillion, and global markets $5.2 trillion.

Stock Market Value Wiped Out Equals $2.5 Trillion And Counting… (CNBC)

The U.S. stock market officially fell into correction territory Thursday and now we now the total damage: $2.49 trillion. That’s the market value that has been wiped out from the S&P 500 during its 10% rapid slide from a record on Jan. 26. The total is even bigger for global stock markets with $5.20 trillion gone as they followed the U.S. market’s lead. Both figures are from S&P Dow Jones Indices. Traders are worried the selling isn’t near over after the S&P 500 fell back below its Tuesday low during its 3.8% plunge Thursday. The benchmark is now at its lowest point since last November. The energy, health care, financials, materials and technology sectors are all in correction territory as well, according to S&P Dow Jones. President Donald Trump need not worry yet as the S&P 500 is still up $3.55 trillion since his election in November 2016, according to S&P Dow Jones.

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The floor is for Jay Powell. Let’s see some tricks.

The Stock Market Is In Turmoil And It’s Not Likely To End Anytime Soon (CNBC)

There’s a not-so-quiet rebellion going on in the bond market, and it threatens to take 10-year yields above 3% much faster than expected just a few weeks ago. As a result, the bumpy ride for stocks could continue for a while. There are some powerful forces at work, with global growth strong, central banks moving to tighten policy and the government’s deficit spending creating more and more Treasury supply. So, the bond market has entered a zone of no return for now, where Treasurys are expected to price in higher yields in a global sea change for bonds. Thursday’s sharp sell-off in stocks, with the S&P 500 closing down 3.8% , reversed a sharp move higher in bond yields, as buyers sought safety. The 10-year yield was at 2.81% from a high of 2.88% earlier in the day and the rising yields had started the stock market spiral lower.

“There’s going to be an interplay, a bit of push and pull between the rates market and equity market,” said Mark Cabana at Bank of America Merrill Lynch. Cabana said his call for a 2.90% 10-year this year is clearly at risk. He said technicians are watching 2.98%, and then 3.28% on the charts. The bipartisan spending bill, expected to pass Congress, called for a higher-than-expected spending cap of $300 billion. Cabana said it was encouraging in that the deal was bipartisan and that means the debt ceiling won’t be an issue. But it also had a negative impact on the bond market and resulted in forecasts of more Treasury supply and higher $1 trillion deficits. “It signals that fiscal austerity out of D.C. is a thing of the past, and Republicans aren’t nearly as concerned with the overall trajectory of the deficit as they have been and the president is worried about it,” he said.

The 10-year Treasury is the one to watch, and while many strategists targeted rates under 3% for this year, they acknowledge the risk is to the upside with yields potentially climbing to 3.25%. The 10-year is the benchmark best known to investors, and its yield influences a whole range of loans, including home mortgages. Strategists say the level of the yield is not so much the problem. Rather, it’s the rapidity of the move that has proven unnerving for global stock markets.”We’re in a vicious cycle here. If the yields go up, you have to sell stocks. If you sell stocks, and they crash, yields come back down,” said Art Hogan at B. Riley FBR.

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True, but ironically, they profited most from the experiment as well.

Stock, Bond Investors Pay For Fed’s Dangerous Experiment (Katsenelson)

In a capitalist economy, the invisible hand serves a very important but underappreciated role: It is a signaling mechanism that helps balance supply and demand. High demand leads to higher prices, telegraphing suppliers that they’ll make more money if they produce extra goods. Additional supply lowers prices, bringing them to a new equilibrium. This is how prices are set for millions of goods globally on a daily basis in free-market economies. In the command-and-control economy of the Soviet Union, the prices of goods often had little to do with supply and demand but were instead typically used as a political tool. This in part is why the Soviet economy failed — to make good decisions you need good data, and if price carries no data, it is hard to make good business decisions. When I left Soviet Russia in 1991, I thought I would never see a command-and-control economy again. I was wrong.

Over the past decade the global economy has started to resemble one, as well-meaning economists running central banks have been setting the price for the most important commodity in the world: money. Interest rates are the price of money, and the daily decisions of billions of people and their corporations and governments should determine them. Like the price of sugar in Soviet Russia, interest rates today have little to do with supply and demand (and thus have zero signaling value). For instance, if the Federal Reserve hadn’t bought more than $2 trillion of U.S. debt by late 2014, when U.S. government debt crossed the $17 trillion mark, interest rates might have started to go up and our budget deficit would have increased and forced politicians to cut government spending. But the opposite has happened: As our debt pile has grown, the government’s cost of borrowing has declined.

The consequences of well-meaning (but not all-knowing) economists setting the cost of money are widespread, from the inflation of asset prices to encouraging companies to spend on projects they shouldn’t. But we really don’t know the second-, third-, and fourth derivatives of the consequences that command-control interest rates will bring. We know that most likely every market participant was forced to take on more risk in recent years, but we don’t know how much more because we don’t know the price of money. Quantitative easing: These two seemingly harmless words have mutated the DNA of the global economy. Interest rates heavily influence currency exchange rates. Anticipation of QE by the European Union caused the price of the Swiss franc to jump 15% in one day in January 2015, and the Swiss economy has been crippled ever since.

Americans have a healthy distrust of their politicians. We expect our politicians to be corrupt. We don’t worship our leaders (only the dead ones). The U.S. Constitution is full of checks and balances to make sure that when (often not if) the opium of power goes to a politician’s head, the damage he or she can do to society is limited. Unfortunately, we don’t share the same distrust for economists and central bankers. It’s hard to say exactly why. Maybe we are in awe of their Ph.D.s. Or maybe it’s because they sound really smart and at the same time make us feel dumber than a toaster when they use big terms like “aggregate demand.” For whatever reason, we think they possess foresight and the powers of Marvel superheroes.

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Got to love the creativity: “..the current market downturn appears to be technical in nature..”

Hong Kong And Mainland China Shares Tank In Global Rout (CNBC)

The global market rout continued into Asia as Hong Kong and China shares fell sharply Friday after the U.S. stock market tanked overnight. The Hang Seng Index was down about 3.8% at 29,306.63 at 11.08 a.m. HK/SIN while the Shanghai composite was down 4.5% at 3,114.0472. Despite the sell-off, equities may just be in their “first leg of correction,” said William Ma, chief investment officer of Noah Holdings in Hong Kong. Even though the mainland market is not fully connected to the global market, fund managers on the mainland are talking about the global economy “half the time,” underscoring the international nature of markets that is causing a “synchronized collapse” in both Hong Kong and China, Ma told CNBC. With everything happening, it’s still too early to jump into the market for bargains, he said.

Ma recommends waiting for the Hang Seng Index to tank another 15% before putting money into the Chinese tech giant trio Baidu, Alibaba and Tencent — collectively known as BAT. Even amid the sharp slide, some experts recommended calm. One, Philip Li, senior fund manager at Value Partners, said the current market downturn appears to be technical in nature. Asia will be under pressure as long as its markets are correlated to the Dow, but earnings expectations for companies and the growth outlooks for regional economies are solid, so the current rout appears divorced from any fundamentals, Li added. The Chinese markets were already under pressure even before this week’s market sell-off as investors took profit ahead of the long Lunar New Year public holidays that start later next week.

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China’s small banks have -interbank- liquidity issues. Can’t have that with Lunar New Year coming up.

PBOC Releases Nearly 2 Trillion Yuan In Temporary Liquidity (R.)

China’s central bank said on Friday that it has released temporary liquidity worth almost 2 trillion yuan ($316.28 billion) to satisfy cash demand before the long Lunar New Year holidays. The People’s Bank of China had announced in December that it would allow some commercial banks to temporarily keep less required reserves to help them cope with the heavy demand for cash ahead of the festivities, which begin later next week. Interbank liquidity levels will remain reasonably stable, the PBOC said on its official microblog.

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Yeah, because who needs big government, right?

50,000 American Bridges Are “Structurally Deficient” (ZH)

Last week, President Trump announced his proposal for a $1.5 trillion infrastructure program in his State of The Union address to the American people. He failed to mention that over the next decade, the federal government would provide very little money whatsoever for America’s crumbling bridges, rails, roads, and waterways. In fact, Trump’s plan counts on state and local governments working in tandem with private investors to fork up the cash for projects. In overhauling the nation’s crumbling infrastructure, the federal government is only willing to pledge $200 billion in federal money over the next decade, leaving the remainder of $1.3 trillion for cities, states, and private companies.

Precisely how Trump’s infrastructure program would work remains somewhat of a mystery after his Tuesday night speech, as state transportation officials warned that significant hikes to taxes, fees, and tolls would be required by local governments to fund such projects. To get an understanding of the severity of America’s crumbling infrastructure. The American Road & Transportation Builders Association (ARTBA) has recently published a shocking report specifying more than 50,000 bridges across the country are rated “structurally deficient. Here are the highlights from the report: • 54,259 of the nation’s 612,677 bridges are rated “structurally deficient.” • Americans cross these deficient bridges 174 million times daily. • Average age of a structurally deficient bridge is 67 years, compared to 40 years for non-deficient bridges. • One in three (226,837) U.S. bridges have identified repair needs. • One in three (17,726) Interstate highway bridges have identified repair needs.

Dr. Alison Premo Black, chief economist for the American Road & Transportation Builders Association (ARTBA), who conducted the analysis, said, “the pace of improving the nation’s inventory of structurally deficient bridges slowed this past year. It’s down only two-tenths of a% from the number reported in the government’s 2016 data. At current pace of repair or replacement, it would take 37 years to remedy all of them. ” Black says, “An infrastructure package aimed at modernizing the Interstate System would have both short- and long-term positive effects on the U.S. economy.” She adds that traffic jams cost the trucking industry $60 billion in 2017 in lost productivity and fuel, which “increases the cost of everything we make, buy or export.”

Other key findings in the ARTBA report: Iowa (5,067), Pennsylvania (4,173), Oklahoma (3,234), Missouri (3,086), Illinois (2,303), Nebraska (2,258), Kansas (2,115), Mississippi (2,008), North Carolina (1,854) and New York (1,834) have the most structurally deficient bridges. The District of Columbia (8), Nevada (31), Delaware (39), Hawaii (66) and Utah (87) have the least. At least 15% of the bridges in six states – Rhode Island (23%), Iowa (21%), West Virginia (19%), South Dakota (19%), Pennsylvania (18%) and Nebraska (15%)—fall in the structurally deficient category. As Staista’s Niall McCarthy notes, U.S. drivers cross those bridges 174 million times a day and on average, a structurally deficient bridge is 67 years old.

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More currency wars?!

Bank Of England Signals An Interest Rate Hike Is Coming (G.)

The Bank of England has signalled that an interest rate hike is coming from as early as May and that there are more to come, as the economy accelerates with help from booming global growth. Threadneedle Street said it would need to raise rates to tackle stubbornly high inflation “somewhat earlier and by a somewhat greater extent” than it had anticipated towards the end of last year. While the Bank’s rate-setting monetary policy committee (MPC) voted unanimously to leave rates at 0.50% this month, the tone of its discussion suggests the cost of borrowing will not remain this low for much longer. The Bank’s governor, Mark Carney, had previously suggested there could be two further rate hikes to curb inflation over the next three years – but speculation will now mount over the chance of additional rate hikes.

The pound rose on foreign exchanges following the interest rate decision, hitting almost £1.40 against the dollar. City investors give a 75% chance of a rate hike in May, after having previously given a 50-50 probability. The FTSE 100 sold off sharply, falling by more than 108.7 points to below 7,200, amid a global stock market rout triggered by concerns among investors that central banks will need to raise interest rates faster than expected to curb rising inflation. On Wall Street, the Dow Jones Industrial Average was down more than 400 points by lunchtime. Threadneedle Street said inflation would fall more gradually than it had previously anticipated, because workers’ pay is slowly beginning to pick-up and as the oil prices is rising. “The outlook for growth and inflation [is] likely to require some ongoing withdrawal of monetary stimulus,” the MPC said.

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Land must belong to communities, societies. Who may lease it to individuals and firms for a good fee, but never sell it. You don’t sell seas and oceans either.

The Biggest Privatisation You’ve Never Heard Of: Land (G.)

Over the past 12 months, the issue of privatisation has surged back into the news and the public consciousness in Britain. Driven by mounting concerns about profiteering and mismanagement at privatised enterprises, Jeremy Corbyn’s Labour party has made the renationalisation of key utilities and the railways a central plank of its agenda for a future Labour administration. And then, of course, there is Carillion, a stark, rotting symbol of everything that has gone wrong with the privatisation of local public services, and which has prompted Corbyn’s recent call for a rebirth of municipal socialism. Yet in all the proliferating discussion about the rights and wrongs of the history of privatisation in Britain – both from those determined to row back against the neoliberal tide and those convinced that renationalisation is the wrong answer – Britain’s biggest privatisation of all never merits a mention.

This is partly because so few people are aware that it has even taken place, and partly because it has never been properly studied. What is this mega-privatisation? The privatisation of land. Some activists have hinted at it. Last October, for instance, the New Economics Foundation (NEF), a progressive thinktank, called in this newspaper for the government to stop selling public land. But the NEF’s is solely a present-day story, picturing land privatisation as a new phenomenon. It gives no sense of the fact that this has been occurring on a massive scale for fully 39 years, since the day that Margaret Thatcher entered Downing Street. During that period, all types of public land have been targeted, held by local and central government alike.

And while disposals have generally been heaviest under Tory and Tory-led administrations, they definitely did not abate under New Labour; indeed the NHS estate, in particular, was ravaged during the Blair years. All told, around 2 million hectares of public land have been privatised during the past four decades. This amounts to an eye-watering 10% of the entire British land mass, and about half of all the land that was owned by public bodies when Thatcher assumed power.

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The mess gets messier.

Northern Ireland Will Stay In Single Market After Brexit – EU (G.)

UK negotiators have been warned that the EU draft withdrawal agreement will stipulate that Northern Ireland will, in effect, remain in the customs union and single market after Brexit to avoid a hard border. The uncompromising legal language of the draft agreement is likely to provoke a major row, something all parties to the negotiations have been trying to avoid. British officials negotiating in Brussels were told by their counterparts that there could be a “sunset clause” included in the legally binding text, which is due to be published in around two weeks. Such a legal device would make the text null and void at a future date should an unexpectedly generous free trade deal, or a hitherto unimagined technological solution emerge that could be as effective as the status quo in avoiding the need for border infrastructure.

As it stands, however, the UK is expected by Brussels to sign off on the text which will see Northern Ireland remain under EU law at the end of the 21-month transition period, wherever it is relevant to the north-south economy, and the requirements of the Good Friday agreement. The move is widely expected to cause ructions within both the Conservative party and between the government and the Democratic Unionist party, whose 10 MPs give Theresa May her working majority in the House of Commons. The UK will be put under even greater pressure to offer up a vision of the future relationship that will deliver for the entire UK economy, but the inability of that model to ensure frictionless trade is likely to be exposed. A meeting of the cabinet to discuss the Irish border on Wednesday failed to come to any significant conclusions.

“There will be no wriggle room for the UK government,” said Philippe Lambert MEP, the leader of the Greens in the European parliament, who was briefed in Strasbourg earlier this week by the EU’s chief negotiator, Michel Barnier. “We are going to state exactly what we mean by regulatory alignment in the legal text. It will be very clear. This might cause some problems in the UK – but we didn’t create this mess.”

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This is the Big Trap now. No debt relief unless and until strong growth. As even the IMF has said strong growth depends on debt relief first.

EU’s Moscovici ‘Especially Optimistic’ On Greek Debt Relief (R.)

European Commissioner for Economic and Financial Affairs Pierre Moscovici said on Thursday he was “especially optimistic” about efforts to reach a solution on Greek debt relief. Greece’s third bailout ends in August and debt relief is expected to come up in negotiations over its bailout exit terms in the coming months. Athens and its eurozone lenders are expected to flesh out a French-proposed mechanism that was presented in June and which will link debt relief to Greek growth rates. The economy is forecast to grow by up to 2.5% this year and in 2019.

“On the issue of debt relief I am especially optimistic and I believe that our efforts will be implemented and they will be successful,” Moscovici said, through an interpreter, at a meeting with Greek President Prokopis Pavlopoulos. Greek public debt is forecast at 180% of GDP this year. Greece has received a record 260 billion euros in three bailouts since 2010. Moscovici, who is in Greece for talks on the next steps in the program, said it was up to Athens to devise a strategy for exiting its bailout and the post-bailout surveillance period. “The exit from the bailout is becoming apparent and under very good circumstances,” Moscovici said.

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A great big swirling black hole.

Greek Pensions Keep Getting Smaller (K.)

One in three pensioners has to live on less than 500 euros a month at a time when pensions in Greece have been constantly falling, according to the Helios online data system’s monthly reports. The Labor Ministry platform showed that the average income of Greek retirees amounts to 894 euros per month: The average main pension from all social security funds comes to 722 euros a month while the average auxiliary pension amounts to just 171 euros a month. The average dividend from the funds comes to 98 euros. More than two in three pensioners (66.39%) are on less than 1,000 euros a month, and 31.03% of pensions do not exceed 500 euros. In December the number of pensioners fell by 3,311 from November to 2,586,480. Compared to October’s 2,592,950, that’s a reduction of 6,470 pensioners.

Monthly expenditure on pensions decreased by 1.44 million euros from November and by 4.07 million from October. In total, 117,148 people were issued with new and definitive main and auxiliary pensions as well as dividends in 2017. As the year drew to a close, more and more new pensions issued were calculated according to the law introduced in 2016, meaning that the benefits handed out were considerably smaller. Therefore, while the average new pension for retirees who paid into the former Social Security Foundation (IKA) amounted to 640.66 euros in January 2017, this dropped to just 521.01 euros in December. Even the average IKA pension for those for whom it was first issued before May 2016 shrank considerably over the year, dropping to 618 euros per month.

Notably, more than a quarter of pensioners (26.32%) are under 65, while the distribution of retirees per age and pension category shows that the younger a person retires, the higher a pension they will receive. Meanwhile the Hellenic Statistical Authority (ELSTAT) announced on Thursday that the unemployment figures for last November showed no improvement from October, staying put at 20.9%. In November 2016 the jobless rate came to an upwardly revised 23.3%.

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Italians have had enough. Elections March 4. This will be the main theme.

Italy Accused Of Subjecting 10,000 Refugees To ‘Deplorable’ Conditions (Ind.)

Ten thousand migrants are living in “deplorable” conditions in Italy without shelter, food and clean water, Médecins Sans Frontières (MSF) has warned in a damning indictment of the country’s border practices. “Inadequate” reception policies are forcing refugees into slums, squats and abandoned buildings with limited access to basic services, the charity said. Increasing marginalisation of asylum seekers and a growing prevalence of forced evictions has led to small groups of migrants living in increasingly hidden places, the charity found, exposing them to “inhumane” living conditions. The findings, released as part of the second edition of the charity’s Out of Sight report, reveal the torturous reality facing huge swathes of Italy’s migrant population. But the survey shows Italians are increasingly uneasy over the numbers of refugees that have reached their country’s shores by boat over the past four years.

The report’s release coincides with a spike in anti-immigration rhetoric ahead of the 4 March parliamentary elections. On Saturday, a far-right extremist was arrested on suspicion of shooting six Africans in a racially motivated attack in Macerata. Days later, Silvio Berlusconi, the former Prime Minister whose Forza Italia (Go Italy!) party has entered a coalition with the Northern League and the smaller Brothers of Italy, promised to deport 600,000 migrants if their coalition came to power. “These 600,000 people, we will pick them up using police, law enforcement and the military… everyone can help identify them by pointing them out, and they will be picked up,” he said, claiming immigration was a “social bomb” linked to crime. Northern League leader Matteo Salvini also promised “irregular” migrants would be rounded up and sent home “in 15 minutes” if he and his allies take power.

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 January 23, 2018  Posted by at 10:56 am Finance Tagged with: , , , , , , , , , , , ,  8 Responses »


William Claxton John Coltrane at the Guggenheim Museum, New York 1960

 

Trump Makes First Big Trade Move With Tariffs Aimed At Asia (BBG)
The Shutdown Scam: The GOP Is Now The Second “Government Party” (Stockman)
Blow Back (Jim Kunstler)
IMF Raises Global Growth Forecast, Sees Trump Tax Boost (R.)
IMF: Next Recession Will Come Sooner And Will Be Harder To Fight (EuA)
Rising Interest Payments Matter (NMT)
UK Business Leaders Push For New Campaign To Reverse Brexit (G.)
Kim Dotcom Sues New Zealand Government For Billions in Damages (BBC)
Ecuador’s Correa ‘Afraid for Julian Assange’s Safety’ (TeleSur)
Australia Sends Dozens Of Refugees From Pacific Camps To US (AFP)
Angela Merkel Has Completely Reversed Her Refugee Policies (Spiegel)

 

 

Make your own solar panels. What’s wrong with that?

Trump Makes First Big Trade Move With Tariffs Aimed At Asia (BBG)

President Donald Trump imposed tariffs on imported solar panels and washing machines, in his first major move to level a global playing field he says is tilted against American companies. The U.S. will impose new duties of as much as 30 percent on foreign-made solar equipment, the U.S. Trade Representative’s office said Monday. The president also approved tariffs starting as high as 50 percent on imported washing machines. Chinese and South Korean officials condemned the move, analysts said it could backfire, while markets largely shrugged it off. The tariffs were announced as Trump prepares to travel to the World Economic Forum in Davos, Switzerland, where the international business and political elite gather to mull the current state of the global order.

While the measures may sharpen the president’s “America First” policy after months of rhetoric and herald a hotter trade conflict with China, in Asia manufacturers and investors said the reality wasn’t as bad as they had feared. Investors “are used to bluff from Trump, which often turns out to be a non-event,” said Qiu Zhicheng at ICBC International Research in Hong Kong. “As long as the situation doesn’t escalate into a full-scale trade war, the market impact will be limited. We believe the two economies will stay rational, as a trade war would hurt both.” LG Electronics, a maker of domestic appliances, and South Korean solar panel makers fell initially in Seoul trading on the news before recovering. Samsung said the tariff on washing machines is a “great loss” for U.S. workers and consumers.

South Korea’s trade minister said Tuesday that his nation will file a petition with the World Trade Organization against the U.S. for imposing anti-dumping duties on Korean washing machine and solar panel makers. The U.S. decision is “excessive,” Kim Hyun-chong said. China exported more than 21 million washing machines worth just under 19 billion yuan ($2.9 billion) globally from January through November 2017, according to customs data. China is also the world’s largest exporter of solar panels.

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David knows his shutdowns.

The Shutdown Scam: The GOP Is Now The Second “Government Party” (Stockman)

Nowadays, government “shutdowns” are obviously not all that, and we do claim some expertise on the topic. Since 1975 there have been 14 shutdowns and we have had the privilege of being on-hand up close and personnel during 11 of these. Five shutdowns occurred while your editor was a member of the US House (1977-1981) and another six during his stint as director of OMB. The idea back then, needless to say, was that shutdowns came about mainly when anti-spenders refused to capitulate to the incessant demands of the swamp creatures for more appropriations, pork and graft.

[..] What is really happening, of course, is that the Trumpite/GOP is proving in spades that America is now saddled with two pro-government parties. This means a good shutdown is going to waste and that there is no stopping the fiscal doomsday machine that is now racing toward a national calamity, unimpeded. After all, the reason Washington is operating on its 3rd CR of the fiscal year and struggled a whole weekend to get a fourth one lasting a mere 16 days, lies in the utter irresponsibility of the Trump GOP approach to fiscal policy.

These clowns want to spend $120 billion on disaster relief without a single dime of off-setting cuts; raise defense by $80 billion when the Pentagon is already a $620 billion swamp of waste; appropriate $33 billion for an utterly idiotic Wall on the Mexican border when the problem could be solved by cancelling the $32 billion per year “War on Drugs” and putting up guest worker sign-up booths along the border; and authorizing tens of billions on top of that to pay for the backroom “deals” that were made in order to get the votes for a massive tax bill that not a single Senators or House member had read before it was ram-rodded into law by desperate GOP leaders on Christmas Eve.

So this shutdown is indeed different. Unlike the case back in the day, there is no fiscal red line whatsoever at issue; only a prospective eruption of more red ink and an interim game of political chicken about 700,000 Dreamers, who at the end of the day will not be deported and who will eventually get a path to citizenship. That’s because they, and millions of more immigrants to come, comprise the only available “growth” margin for the US work force in the decades ahead; and therefore constitute the next generation of Tax Mules which will be absolutely necessary to support today’s 50 million retirees. That is, as their population inexorably swells toward 100 million during the next four decades.

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Pressure on the FBI is set to increase tenfold.

Blow Back (Jim Kunstler)

On Sunday, the FBI revealed that it had lost five months of text messages between Trump antagonists Peter Strzok and Lisa Page. The agency offered a lame explanation that “software upgrades” and “misconfiguration issues” interfered with the app that is supposed to automatically save and archive communications between officials on FBI phones. This was the couple who chattered about an FBI-generated “insurance policy” for the outcome of the 2016 election with Deputy Director Andrew McCabe. When will these three be invited to testify before a house or senate committee to inform the nation exactly what the “insurance policy” was?

The bad odor at the FBI seeps into several other areas of misbehavior involving Hillary Clinton, her campaign, the Democratic National Committee (DNC), and members of the permanent Washington bureaucracy. Did the Obama White House use the Christopher Steele dossier, paid for by the Clinton Campaign, to obtain FISA warrants against her opponent in the election for the purpose of conducting electronic surveillance on him? Was the FBI abetting a Democratic Party coup to get rid of Trump by any means necessary once he got into office?

Did the FBI conduct a stupendously half-assed investigation into Hillary Clinton’s private email server by dismissing the charges before interviewing any of the principal characters involved, granting blanket immunities to Obama White House officials, and failing to secure computers that contained evidence? Does the FBI actually know what then Attorney General Loretta Lynch discussed with Bill Clinton in the parked airplane on the Phoenix tarmac? Did the FBI fail to investigate enormous contributions (roughly $150 million) to the Clinton Foundation after the Uranium One deal was signed? Did they look into any of the improprieties surrounding the DNC’s effort to nullify Bernie Sander’s primary campaign?

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Growth is God.

IMF Raises Global Growth Forecast, Sees Trump Tax Boost (R.)

The IMF on Monday revised up its forecast for world economic growth in 2018 and 2019, saying sweeping U.S. tax cuts were likely to boost investment in the world’s largest economy and help its main trading partners. However, the IMF, in an update of its World Economic Outlook, also added that U.S. growth would likely start weakening after 2022 as temporary spending incentives brought about by the tax cuts began to expire.\ The tax cuts would likely widen the U.S. current account deficit, strengthen the U.S. dollar and affect international investment flows, IMF chief economist Maurice Obstfeld said. “Political leaders and policymakers must stay mindful that the current economic momentum reflects a confluence of factors that is unlikely to last for long,” Obstfeld told reporters at the World Economic Forum in Davos.

He said economic gains from the tax cuts would be partially paid back later in the form of lower growth as temporary spending incentives, notably for investment, expired and as rising federal debt took a toll. IMF Managing Director Christine Lagarde pointed to a “troubling” increase in debt levels across many countries and warned policymakers against complacency, saying now was the time to address structural deficiencies in their economies. Obstfeld said a sudden rise in interest rates could lead to questions about the debt sustainability of some countries and lead to a disruptive correction in “elevated” equity prices.

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IMF wants their cake and eat it. They warn against the failure of their own policy recommendations.

IMF: Next Recession Will Come Sooner And Will Be Harder To Fight (EuA)

The global economy is growing faster than expected, fuelling CEO optimism as they arrive this week at the World Economic Forum (WEF) in Davos, Switzerland. But the IMFhas warned that the next crisis will hit sooner and harder that we thought. “In seed time learn, in harvest teach, in winter enjoy,” said IMF Managing Director Christine Lagarde, issuing a warning by quoting British poet William Blake to describe the state of mind of businessmen and politicians in the world. The global economy continues to beat previous forecasts. The Fund revised upward by 0.2% the growth expected for this year and next. In Europe, the IMF increased further its outlook by 0.3% in 2018 (2.2%) and in 2019 (2%). But “complacency is one of the risks we should go against”, Lagarde told reporters in Davos hours before the official opening of the WEF.

The economy is growing but not because countries have lifted their growth potential via investment in human capital or technology. Instead, reforms have been elusive and growth has benefited just the few that are on top of the pile. “We are not satisfied,” Lagarde insisted, because “too many people have been left out of the acceleration of growth”. Against the backdrop of fragile growth and outstanding challenges, including a high level of debt, the Fund’s chief economist, Maurice Obstfeld, stressed that “the next recession will come sooner and will be harder to fight”. He warned political leaders that the economic momentum is due to factors that are “unlikely to last for long”, including the monetary stimulus and supportive fiscal stance. For that reason, he urged countries to adopt measures aimed at improving the resilience of their societies in the fast-changing digital revolution and to improve the inclusiveness of their societies.

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Another huge surge in debt. Insane. But the only way to keep the zombie from dying.

Rising Interest Payments Matter (NMT)

Is anyone paying attention? I don’t know, but the cost of carrying debt has been rising and it’s already showing measurable impacts despite the Fed Funds rate still being very low. My concern of course is that the global debt construct will bring global growth to a screeching halt (see also The Debt Beneath). As the 10 year is already piercing above the 2.6% area now I want to pay attention to the data coming in as the Fed is dot plotting more rate hikes to come. After all the Fed has hiked 5 times off the bottom floor in the past 2 years:

Can we see any measurable impact? You bet we can. Here are personal interest payments for consumers:

Mind you we are still near the lows of the previous cycle and already total interest payments are near record highs. The driver of course is record consumer debt and credit card debt. But despite rates still being historically low this rise in interest rates has an impact on the consumer. Already we see this: “The big four US retail banks sustained a near 20 per cent jump in losses from credit cards in 2017, raising doubts about the ability of consumers to fuel economic expansion. “People are using their cards to get from pay cheque to pay cheque,” said Charles Peabody, managing director at the Washington-based investment group Compass Point. “There’s an underlying deterioration in the ability of the consumer to keep up with their debt service burden.” Recently disclosed results showed Citigroup, JPMorgan Chase, Bank of America and Wells Fargo took a combined $12.5bn hit from soured card loans last year, about $2bn more than a year ago.”

I repeat: “There’s an underlying deterioration in the ability of the consumer to keep up with their debt service burden.” [..] “Economists with Deutsche Bank expect the extra debt the Treasury must issue to fund President Donald Trump’s tax package and the amount of debt the Federal Reserve plans to redeem at maturity this year will bloat issuance to about $1tn in 2018. That’s up more than 50 per cent from a year earlier and, when coupled with a 30 per cent rise in the amount of corporate debt that’s due to mature, leaves questions of who the eventual buyer will be.“ A good question indeed. That’s a lot of debt issuance:

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2018 will be the year of the Brexit reversal.

UK Business Leaders Push For New Campaign To Reverse Brexit (G.)

Business leaders are privately pushing for a new campaign to reverse Brexit as concerns mount about the viability of government plans to prevent a collapse in exports to Europe. On Monday, the CBI launched its most sustained attack yet on the government’s Brexit strategy by calling for full customs union with the EU and single market participation, even if it means abandoning the pursuit of separate trade deals with the rest of the world. Behind the scenes, senior figures on the CBI policy council are urging the lobby group to toughen its message still further and spell out their belief that this logic should ultimately lead to a national rethink of the decision to leave the EU, perhaps through a second referendum or an election.

While this is not the CBI’s official position, the group says it has decided to speak out about the problems of the government’s approach to Brexit after “thousands of conversations” and workshops with its members over the past two to three months. “It’s not for us to say [whether to reverse Brexit], we are simply pointing out that you need single market access and you need a customs union,” said a spokesman. “If someone concludes that we therefore need to retest this, that’s a political decision, we are just being very practical about it.”

Government ministers reacted furiously to previews of the CBI’s evolving position over the weekend, which now directly challenges the British strategy of leaving the customs union so that new trade deals can be pursued outside a common tariff area. The CBI director general, Carolyn Fairbairn, told an audience at Warwick University on Monday: “There may come a day when the opportunity to fully set independent trade policies outweighs the value of a customs union with the EU; a day when investing in fast-growing economies elsewhere eclipses the value of frictionless trade in Europe. But that day hasn’t yet arrived.”

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The former government, to be exact.

Kim Dotcom Sues New Zealand Government For Billions in Damages (BBC)

Kim Dotcom, the founder of file-sharing site Megaupload, is suing the New Zealand government for billions of dollars in damages over his arrest in 2012. The internet entrepreneur is fighting extradition to the US to stand trial for copyright infringement and fraud. Mr Dotcom says an invalid arrest warrant negated all charges against him. He is seeking damages for destruction to his business and loss of reputation. Accountants calculate that the Megaupload group of companies would be worth $10bn (£7.2bn) today, had it not been shut down during the raid. As he was a 68% shareholder in the business, Mr Dotcom has asked for damages going up to $6.8bn. He is also considering taking similar action against the Hong Kong government.

As stated in documents filed with the High Court, Mr Dotcom is also seeking damages for: • all lost business opportunities since 2012 • his legal costs • loss of investments he made to the mansion he was renting • his lost opportunity to purchase the mansion • loss of reputation. “I cannot be expected to accept all the losses to myself and my family as a result of the action of the New Zealand government,” he told the BBC. “This should never have happened and they should have known better. And because they made a malicious mistake, there is now a damages case to be answered.” New Zealand Prime Minister Jacinda Ardern told Radio New Zealand: “This has obviously been an ongoing matter, so no it doesn’t surprise me.”

Mr Dotcom’s key argument over his extradition is the warrants used for the raid on his mansion and arrest in January 2012 were based on Section 131 of the 1994 Copyright Act of New Zealand. “Under the NZ copyright act, online copyright infringement is not a crime,” said Mr Dotcom. “92B of Section 131 – an amendment created by parliament in 2012 – prohibits any criminal sanction against an internet service provider in New Zealand. “In order for the US to be successful with an extradition, the allegation of the crimes that they are charging someone with also have to be a crime in the country from which they request the extradition.”

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We must find ways to protect Assange et al.

Ecuador’s Correa ‘Afraid for Julian Assange’s Safety’ (TeleSur)

Former Ecuadorean president Rafael Correa has warned that WikiLeaks founder Julian Assange’s days are numbered at the Ecuadorean Embassy in London. Correa, who gave Assange asylum back in 2012, said that he’s “afraid for Julian Assange’s safety” due to the new government´s actions with regards to his case. He said that he believes President Lenin Moreno is likely “take away the support” previously afforded to the anti-secrecy activist. “It will only take pressure from the United States to” withdraw protection for Assange and “surely it’s already being done, and maybe they await the results of the Feb. 4 (referendum) to make a decision,” said Correa, in an article published by AFP.

When asked does he have evidence to support his claim, Correa said it’s clear that Moreno “has no convictions, it’s clear that he has yielded to the usual powerbrokers” and will “soon enough yield regarding the question of Assange.” The 54-year old economist added that the ambassador for the United States was shamelessly interfering in Ecuador’s internal affairs, something “hadn’t occurred during ten years” of his government. Earlier this week Correa officially left the ruling PAIS Alliance, the leftist political movement he founded in 2006 and which he first rose to political prominence. Having referred to Moreno as a “traitor,” someone who has called for an “unconstitutional” referendum that could spell an end to “democracy,” Correa went on to say that “they can rob us of Alianza Pais, but never our will and convictions. Despite the pain, this only strengthens us.”

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In the future, Manus will be compared to Birkenau.

Australia Sends Dozens Of Refugees From Pacific Camps To US (AFP)

Dozens of refugees held for years in Australia’s remote Pacific detention camps departed for resettlement in the United States on Tuesday, asylum-seeker advocates said. The Sydney-based Refugee Action Coalition said 40 men flew out from Papua New Guinea’s capital Port Moresby under a deal struck by Australia with former US president Barack Obama but bitterly criticised by his successor Donald Trump. “It was a bitter-sweet moment for the refugees — who on the one hand, are happy to be gaining the freedom that Australia denied them more than four years ago; but on the other, they remain extremely concerned for those that are being left behind,” the advocacy group said in a statement.

The refugees, from camps on Manus Island, flew to Manila from where they will fly on to the US in different groups in the coming weeks before being resettled across the country, it said. The group released photos showing the refugees lining up before dawn to get on buses for the airport, then waiting at the gate to board their flight to Manila. Another 18 men were due to leave Port Moresby in the coming weeks, it said. [..] Canberra sends asylum-seekers who try to reach Australia by boat to detention camps in Manus and the Pacific island of Nauru under a tough policy designed to choke off the flow of refugees to the country. More than 1,000 still remain in limbo in the remote locations.

Canberra has strongly rejected calls to move the refugees to Australia and instead has tried to resettle them in third countries, including the United States. But until now only about 50 refugees have been sent to the US, under an agreement President Trump attacked after taking office as a “dumb deal”. The Refugee Action Coalition said a further 130 people on Nauru have been accepted by the US and are expected to depart next month.

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Merkel can’t take that she’s yesterday’s news.

Angela Merkel Has Completely Reversed Her Refugee Policies (Spiegel)

It’s no longer about people, it’s about a number. It’s about the number of refugees who come to Germany, not about the refugees themselves. The most recent number is 223,000: That’s how many asylum applications were submitted last year, a far cry from the 746,000 applications received in 2016. The new number is rather convenient for Angela Merkel in that it is extremely close to the upper limit of 220,000 that has found its way into the German chancellor’s preliminary coalition outline agreed to by Merkel’s conservatives and the center-left Social Democrats (SPD). This number is the expression of a political policy that has never been clearly verbalized and never been adequately explained. It is the expression of an about-face on refugee policy, away from open borders and toward harsh rejection.

Late in the summer of 2015, Merkel said that if Germany cannot show “a friendly face” in an emergency, “then it is not my county.” She kept the borders open to the incoming refugees, and much of the world was inspired by her humanitarian approach. Now, however, Germany is presenting a much less friendly face to the world. And the German chancellor has no country anymore. But that doesn’t seem to be bothering her. Indeed, her views would seem to have completely changed. In 2016, Merkel engineered a deal with Turkey on behalf of the European Union which essentially shut down the refugee route across the Aegean Sea from Turkey to Greece. She also agreed to demands from the conservative Christian Social Union (CSU), the Bavarian sister party to her own Christian Democrats (CDU), that an annual upper limit be established, though it isn’t allowed to be called an “upper limit.”

In the future, there is also to be a 1,000-per-month upper limit applied to family reunifications for most refugees. That is too low. The CDU and CSU are fond of emphasizing family values, yet they have joined forces to limit family reunification — even though it should be clear to everyone that men have the best chances at integration if they live here together with their families. But none of that matters anymore. The parties only care that the number is low. And SPD leaders are going along without complaint. That, too, is a disappointment.

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Jan 222018
 
 January 22, 2018  Posted by at 10:38 am Finance Tagged with: , , , , , , , , , , ,  16 Responses »


Joan Miró Personnages Rythmiques 1934

 

Richest 1% Took 82% Of New Global Wealth Last Year (Ind.)
42 People Hold Same Wealth As 3.7 Billion Poorest (G.)
Three Charts To Consider Ahead Of Monday’s Post-Government-Shutdown Open (ZH)
Republicans Float Minor Immigration Deal In Bid To End Deadlock (G.)
20 Senators Support Bipartisan Plan To Reopen Government (ZH)
US Shutdown Exposes ‘Chaotic Political System’ – China News Agency (R.)
FBI “Loses” Five Months Of Text Messages Between Anti-Trump Agents (AP)
Fed Scared to Death of Causing Global Financial Crash – Nomi Prins (USAW)
Macron Admits France Would Vote To Leave EU If Referendum Held (ZH)
Apple Leak Reveals Sudden iPhone X Cancellation (F.)
Assange a ‘Problem’, ‘More Than a Nuisance’ – Ecuador President (Sp.)
Opioids: The Big Money Is In Chronic Pain, Which Is Endless (NDN)

 

 

Either we stop this, or it’s pitchforks and guillotines.

Richest 1% Took 82% Of New Global Wealth Last Year (Ind.)

Growing inequality resulted in 82% of new global wealth going to the richest 1% last year, while the poorest half of the world saw their prosperity flatline, a report by Oxfam has shown. It means that of the $9.2tn increase in global wealth between July 2016 and June 2017, around $7.6tn (£6tn) went to 75 million people, while the bottom 3.7 billion saw no increase. It helped spark the sharpest increase in the number of billionaires ever recorded, to 2,043, with one created every two days, according to Oxfam’s report, published ahead of the annual World Economic Forum of global political and business leaders in Swiss ski resort Davos. The wealth of those billionaires increased by $762bn over 12 months, it added.

Mark Goldring, chief executive of Oxfam GB, said the statistics signal that “something is very wrong with the global economy”. “The concentration of extreme wealth at the top is not a sign of a thriving economy but a symptom of a system that is failing the millions of hard-working people on poverty wages who make our clothes and grow our food.” He said a living wage, “decent conditions” and equality for women were essential if work was to be a “genuine route out of poverty”. “If that means less for the already wealthy then that is a price that we – and they – should be willing to pay,” Mr Goldring added, as he pushed for a crackdown on tax avoidance and a revamp of business models that prioritise social benefit over shareholder returns.

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After everything western workers fought hard and often bloody fights for, how did we end up back in the Middle Ages again?

42 People Hold Same Wealth As 3.7 Billion Poorest (G.)

The development charity Oxfam has called for action to tackle the growing gap between rich and poor as it launched a new report showing that 42 people hold as much wealth as the 3.7 billion who make up the poorest half of the world’s population. In a report published on Monday to coincide with the gathering of some of the world’s richest people at the World Economic Forum in Davos, Oxfam said billionaires had been created at a record rate of one every two days over the past 12 months, at a time when the bottom 50% of the world’s population had seen no increase in wealth. It added that 82% of the global wealth generated in 2017 went to the most wealthy 1%.

The charity said it was “unacceptable and unsustainable” for a tiny minority to accumulate so much wealth while hundreds of millions of people struggled on poverty pay. It called on world leaders to turn rhetoric about inequality into policies to tackle tax evasion and boost the pay of workers. Mark Goldring, Oxfam GB chief executive, said: “The concentration of extreme wealth at the top is not a sign of a thriving economy, but a symptom of a system that is failing the millions of hardworking people on poverty wages who make our clothes and grow our food.” Booming global stock markets have been the main reason for the increase in wealth of those holding financial assets during 2017. The founder of Amazon, Jeff Bezos, saw his wealth rise by $6bn in the first 10 days of 2017 as a result of a bull market on Wall Street, making him the world’s richest man.

Oxfam said it had made changes to its wealth calculations as a result of new data from the bank Credit Suisse. Under the revised figures, 42 people hold as much wealth as the 3.7 billion people who make up the poorer half of the world’s population, compared with 61 people last year and 380 in 2009. At the time of last year’s report, Oxfam said that eight billionaires held the same wealth as half the world’s population. The charity added that the wealth of billionaires had risen by 13% a year on average in the decade from 2006 to 2015, with the increase of $762bn (£550bn) in 2017 enough to end extreme poverty seven times over. It said nine out of 10 of the world’s 2,043 dollar billionaires were men.

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What happens when price discovery is murdered.

Three Charts To Consider Ahead Of Monday’s Post-Government-Shutdown Open (ZH)

VALUE: The S&P 500 is trading at a Price-to-Sales ratio of 2.35x… a new record high for valuation…

GREED: The S&P 500 is up 8 of the last 9 weeks, 16 of the last 19 weeks, and 15 of the last 15 months (and 22 of the last 23 months – since The Shanghai Accord). This has pushed The S&P 500 to an RSI of 88.4… a new record high for overbought…

FEAR: The S&P 500 has averaged about four 5% declines – from peak to trough – annually since 1927, but volatility in US stocks has evaporated in recent years. Amid a reportedly robust global economy and still supportive global monetary policy, Friday’s 0.4% gain meant that the S&P 500 extended its streak to 395 days without a 5% reversal… a new a new record for tranquillity…

As The FT notes, the last time the S&P 500 suffered a 5% setback was in the global market carnage that followed the UK’s shock vote in June 2016 to leave the EU, which constitutes the last significant, if brief, bout of volatility in markets. The last time the US stock market suffered an actual correction – typically defined as a drop of over 10% from the recent peak — was in early 2016, when investors’ anxiety grew over the state of China’s economy. Some investors and analysts fear that the tranquillity is encouraging investors to stop buying protection against declines, or to making aggressive “short” bets on volatility staying low through complicated derivatives – which could exacerbate any turbulence that might erupt.

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Who’s going to blink first?

Republicans Float Minor Immigration Deal In Bid To End Deadlock (G.)

The US government shutdown edged closer to a resolution on Sunday night after a minor concession from the Senate majority leader, Mitch McConnell, who said he would allow a vote on immigration reform in February if Democrats agree to fund the government. However, one Democratic source cautioned that no deal had been reached. McConnell’s proposal represented the fruit of a bipartisan effort among moderates in both parties to resolve the shutdown, which began at midnight on Saturday. The shutdown was spurred by the inability of Congress to reach a deal to resolve the status of “Dreamers” – undocumented migrants brought into the United States as children. They had been protected from deportation until September 2017 when the Trump administration ended the Daca program, which had been created by Barack Obama.

Trump allowed a six-month grace period for Congress to give Dreamers permanent legal status through legislation. However, with that expiring in early March, Democrats, facing heavy pressure from immigration advocates, had pledged not to fund the government until a deal was reached. McConnell’s proposal would allow the Senate to debate and vote on an immigration deal if a broader bipartisan compromise was not reached in the next three weeks. Speaking on the floor, the top Senate Republican said he would push for a Monday vote on a short-term deal to fund the government through 8 February, as well as extend a popular health insurance program called Chip that provides healthcare coverage to nine million children for six years.

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Let’s keep it shut till summer, see what happens.

20 Senators Support Bipartisan Plan To Reopen Government (ZH)

With Senate Majority Leader Mitch McConnell calling for a procedural vote on a senate measure that would keep the federal government running through Feb. 8 to begin at 1 am Monday, a bipartisan group of senators signaled that they’re nearing an agreement to reopen the government following a Sunday afternoon meeting, the Hill reported. Georgia Senator Johnny Isakson said the group had reached a “consensus of understanding” – essentially agreeing to the broad strokes of a plan to satisfy recalcitrant Democrats and Republicans, per the Hill. As they left the meeting in Maine senator Susan Collins’s office, some members expressed optimism that they will reach an understanding, if not a final agreement, that would let them move forward. South Carolina Senator Lindsey Graham predicted that the group could cobble together a deal before the 1 am vote.

“Yeah because if it doesn’t happen tonight it’s going to be a lot harder,” he said, alluding to the fact that most federal agencies have elected to wait until Monday before implementing the terms of the shutdown (here’s a quick guide to what departments and services will be impacted by the shutdown)… As the BBC pointed out, the closure of many federal services will be felt around the country and hundreds of thousands of federal staff face unpaid leave. According to Politico, the senators took their proposal to McConnell and Senate Minority Leader Chuck Schumer after the 90-minute meeting. The plan would reopen the government through Feb. 8 and have McConnell commit on the Senate floor to holding an immigration vote before that date.

[..] this is the first time a government shutdown has happened while one party in this case, the Republicans – controls both Congress and the White House And according to the Associated Press, the 2013 shutdown left 800,000 government workers on temporary leave. The bipartisan group isn’t crafting separate legislation. Instead, senators say the bulk of their talks were about how to get 60 votes for the bill to fund the government through Feb. 8, paired with a commitment that will satisfy Democrats on bringing up an immigration bill. Since before the shutdown even began at 12:01 am ET on Saturday morning, Republicans and Democrats have traded accusations of blame. House Speaker Paul Ryan has said he would bring such a bill up for a vote in the House if it passes the Senate.

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Easy pickings.

US Shutdown Exposes ‘Chaotic Political System’ – China News Agency (R.)

The shutdown of the US government exposes “chronic flaws” in the country’s political system, China’s official news agency said on Sunday. Funding for federal agencies ran out at midnight on Friday in Washington after members of Congress failed to agree on a stopgap funding bill. “What’s so ironic is that it came on the first anniversary of Donald Trump’s presidency on Saturday, a slap in the face for the leadership in Washington,” the Xinhua news agency’s Liu Chang said in a commentary piece. The article said that the Trump administration had “backtracked” on policies supported by his predecessor, Barack Obama, including the Trans-Pacific Partnership trade agreement and US participation in the Paris climate agreement.

“If there was any legacy that has survived the transfer of power, it was the spirit of non-cooperation across party lines,” the commentary said. While Xinhua commentaries are not official statements, they offer a reflection of Beijing’s thinking. “The western democratic system is hailed by the developed world as near perfect and the most superior political system to run a country,” it said. “However, what’s happening in the United States today will make more people worldwide reflect on the viability and legitimacy of such a chaotic political system.”

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First the NSA a few days ago, now the FBI. Both should be under investigation, but who’s going to do the investigating?

Look, you and I have back-ups of our files. So do NSA and FBI. The only way to lose the info is to deliberately delete it, multiple times.

US intelligence is flipping the country the bird’s middle finger.

FBI “Loses” Five Months Of Text Messages Between Anti-Trump Agents (AP)

The Justice Department has turned over to Congress additional text messages involving an FBI agent who was removed from special counsel Robert Mueller’s investigative team following the discovery of derogatory comments about President Donald Trump. But the department also said in a letter to lawmakers that its record of messages sent to and from the agent, Peter Strzok, was incomplete because the FBI, for technical reasons, had been unable to preserve and retrieve about five months’ worth of communications. New text messages highlighted in a letter to FBI Director Christopher Wray by Sen. Ron Johnson, the Republican chairman of the Senate’s Homeland Security and Governmental Affairs Committee, are from the spring and summer of 2016 and involve discussion of the investigation into Hillary Clinton’s use of a private email server.

They reference Attorney General Loretta Lynch’s decision to accept the FBI’s conclusion in that case and a draft statement that former FBI Director James Comey had prepared in anticipation of closing out the Clinton investigation without criminal charges. Strzok, a veteran counterintelligence agent who also worked the Clinton email case, was reassigned last summer from the team investigating ties between Russia and Trump’s Republican presidential campaign after Mueller learned he had exchanged politically charged text messages — many anti-Trump in nature — with an FBI lawyer also detailed to the group. The lawyer, Lisa Page, left Mueller’s team before the text messages were discovered.

The Justice Department last month produced for reporters and Congress hundreds of text messages that the two had traded before becoming part of the Mueller investigation. Many focused on their observations of the 2016 election and included discussions in often colorful language of their personal feelings about Trump, Clinton and other public figures. Some Republican lawmakers have contended the communication reveals the FBI and the Mueller team to be politically tainted and biased against Trump — assertions Wray has flatly rejected. In addition to the communications already made public, the Justice Department on Friday provided Johnson’s committee with 384 pages of text messages, according to a letter from the Wisconsin lawmaker that was obtained by The Associated Press.

But, according to the letter, the FBI told the department that its system for retaining text messages sent and received on bureau phones had failed to preserve communications between Strzok and Page over a five-month period between Dec. 14, 2016, and May 17, 2017. May 17 was the date that Mueller was appointed as special counsel to oversee the Russia investigation. The explanation for the gap was “misconfiguration issues related to rollouts, provisioning, and software upgrades that conflicted with the FBI’s collection capabilities.”

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Are they really? You don’t think they may have seen this coming, and prepared for it?

Fed Scared to Death of Causing Global Financial Crash – Nomi Prins (USAW)

Two time, best-selling author Nomi Prins says central bankers have no idea how to stop the easy money policies that they started after the financial meltdown of 2008. Prins explains, “So, when the Fed says they are going to remove assets from their $4.5 trillion book by not reinvesting the interest payment . . . the reality is they haven’t really done that. They have reduced their book by about $10 billion off of $4.5 trillion since they mentioned they were going to start ‘tapering.” The media discusses this as a major tightening move. Somehow all of our economies have finally worked because of central bank activity. Growth is real. It’s all positive. The markets are evidence of that because of the levels they are at; and, therefore, these central banks, starting with the Fed, are going to reverse course of these last 10 years.

The reality is if you look at the actual activity of the central banks, beyond the Fed raising rates by a little bit, there hasn’t been and there isn’t being a reversal of course because they are scared to death that too much of a reversal is going to cause a major crash throughout the financial system. Everything is connected. All the banks are connected. Money flows around the world in less than nanoseconds, and all of it has the propensity to collapse if that carpet the central banks have created is dragged from beneath the floor of all this activity.”Prins, who just finished traveling the globe to research her upcoming book, thinks there is one big thing that can take the entire system down. Prins contends, “There hasn’t been any real growth in the real economy. That is an indication of the misfire of this entire plan.

There has been tremendous growth in stock markets and bond markets. If you look at localities or states or governments whose debt to GDP levels are well over 100%, in Japan it’s over 200%, in the United States it over 100%, and this is the same throughout the world. These are levels that they have never been, and they are all at their historic highs. That’s why debt will ultimately be the destructor of the system. In order for that to happen, the cheapness of money that allow states, municipalities and corporations to continue to borrow at these cheap levels has to go away. . . At some point, there will be a mistake. There might be a tiny smidge of an interest rate hike at some central bank, probably the Fed, which ripples throughout the system as a mistake, not because real growth has happened, and that’s why interest rates have been raised. That will incur defaults throughout the system.

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Macron defines European democracy. Straight faced.

Macron Admits France Would Vote To Leave EU If Referendum Held (ZH)

When Marine Le Pen lost last year’s French presidential election to Emmanuel Macron in what appeared to be a landslide, the establishment breathed a sigh of relief because not only was the notorious Eurosceptic populist defeated, but also the wind appeared to be turning, and after a tumultuous 2016, 2017 started off with a bang for the unelected Eurocrats in Brussels. After all, the people had spoken and they wanted more Europe (and Euro), not less. Or maybe not. The French president sent shockwaves across Europe after he conceded that French voters would quit the EU if France held an in/out referendum on continued membership in the Brussels-led bloc. Not surprisingly no other EU country has risked putting membership of the bloc to a public vote since Britain shocked member-states by voting to leave the bloc in 2016, despite polls which showed virtually no possibility of such an outcome.

In an interview with BBC’s Andrew Marr, Emmanuel Macron admitted that he would lose a French referendum on EU membership. Asked about the Brexit vote, the candid president told Marr: “I am not the one to judge or comment on the decision of your people.” But, he added “my interpretation is that a lot of the losers of globalisation suddenly decided it was no more for them.” Marr then pushed the French president, regarded by many as the EU’s new leader, on whether Britain’s decision was a one-off. Quoted by Express, the BBC journalist asked: “If France had had the same referendum, it might have had the same result?” Macron responded: “Yes, probably, probably. Yes. In a similar context. But we have a very different context in France” although he said he would not make it easy: “I wouldn’t take any bet though – I would have fought very hard to win.

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Got to admire the efforts to turn this into a positive story.

Apple Leak Reveals Sudden iPhone X Cancellation (F.)

It may be the smartphone of the moment, but a new leak reveals Apple AAPL -0.45% will soon cancel the iPhone X. And the source could not be more credible… In a new report obtained by AppleInsider, acclaimed KGI Securities’ analyst Ming-Chi Kuo says disappointing sales of the iPhone X will lead to the cancellation of the model “with production ceasing in the summer”. This would be the first time Apple has cancelled an iPhone model after just one generation since the iPhone 5C in 2014. Kuo, who has a long track record successfully revealing Apple’s plans, said disinterest in China is the main reason. In China big screens are king and the iPhone X’s polarising ‘notch’ is seen by Chinese consumers as removing too much usable space. Especially when the cheaper iPhone 8 Plus actually delivers slightly more.

The news also follows a new survey from Cowan which claims interest in new iPhones has hit an historic low. That said it is not all doom and gloom. While the iPhone X will not bring Apple the much anticipated sales ‘Super Cycle’, Kuo states Apple will see modest 5% growth in the first half of 2018. This comes from Apple having three premium models (iPhone 8, iPhone 8 Plus, iPhone X) on sale for the first time. Furthermore Kuo believes Apple will enjoy a better end to 2018 with 10% growth as the outgoing iPhone X will be replaced by a total of three new iPhone X-inspired designs: a second generation 5.8-inch iPhone X, 6.5-inch iPhone X Plus and a “$650-750” 6.1-inch iPhone SE replacement which will be fitted with Face ID. Apple hopes it will be the latter two which once again excite the Chinese market.

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Ecuador requires countries to stand with it.

Assange a ‘Problem’, ‘More Than a Nuisance’ – Ecuador President (Sp.)

In an interview the president of Ecuador, Lenin Moreno, stated that WikiLeaks founder Julian Assange is an “inherited problem” that has created “more than a nuisance” for his government. “We hope to have a positive result in the short term,” Lenin Moreno said in an interview with television networks. Ecuador wanted to resolve the Assange issue, so the Australian whistleblower was “granted Ecuadorian citizenship and a diplomatic rank so that he could leave the territory of the embassy” in London, Moreno said. “The problem persists,” the Ecuadorian president said, pointing out that the country’s Foreign Ministry intends to solve it “using the mediation of important people.” The head of state assured that their names will soon be made public.

The Ecuadorian government wants to see a “positive result” with Assange in a short time, Moreno added. Earlier, the Ministry of Foreign Affairs of Ecuador officially confirmed that the authorities granted citizenship to Julian Assange. According to El Universo, the number of his passport is listed in the relevant databases. This is confirmed on the website of the Internal Revenue Service, where the specified number corresponds to a person named Julian Paul Assange. According to the publication, citizenship was granted to him on December 21. Ecuador’s foreign minister, Maria Fernanda Espinosa, said that she fears that third party states may threaten Julian Assange’s life. She added that Assange won’t leave Ecuador’s Embassy in UK because there are no security guaranties.

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“The big money was not in acute pain, which goes away, or cancer pain, where patients die quickly..”

Opioids: The Big Money Is In Chronic Pain, Which Is Endless (NDN)

Opioids affect us in complex and mysterious ways . They don’t stop sensation, like local anesthetics. Instead, these drugs work by activating natural opioid receptors in our brains. They change our experience of pain. They replace pain, in part, with pleasure. Pain thresholds are built into us for powerful evolutionary reasons. Opioids make us feel good in the short term, but they also distort essential mechanisms necessary for survival in a Darwinian world. Tolerance is the body’s natural attempt to restore those mechanisms. We become less sensitive to opioids, and need higher doses for the same effect. Tolerance is the first step toward physical addiction; the two are linked. As tolerance rises, the risk of overdose and death follows closely behind. The time it takes for this process to occur is the key to understanding the opioid epidemic. A week or two of opioids may cause euphoria and pleasure, but it will rarely create physical addiction. Given a few months, however, anyone can be made into an opioid addict.

[..] In 1996 a single company, Purdue Pharmaceuticals, introduced a patented new opioid compound into the market with FDA approval. They called it OxyContin, and marketed it as a new drug. OxyContin wasn’t a new drug. It was simply a new pill designed to release an old drug — oxycodone — more slowly. Oxycodone was first synthesized in 1916, and is closely related to heroin. Since it releases oxycodone more slowly, OxyContin doesn’t have to be taken as often to relieve pain. That slower release also allowed Purdue to put higher doses of oxycodone into each pill. Purdue Pharma used this distinction as a pretext for claims that OxyContin was safer and less addictive than other opioids and therefore should be widely prescribed for pain of all kinds.

The FDA enabled this assertion, and the FDA examiner who approved OxyContin’s initial application took a job with Purdue shortly thereafter. Once the FDA approved the drug, Purdue unleashed a fraudulent marketing campaign designed to generate as many new OxyContin consumers as possible. A critical element of their strategy was to expand the traditional indications for opioid prescriptions beyond acute pain into the far more controversial category of chronic pain. Chronic pain is so broadly defined that tens of millions of patients became potential customers. This was hugely consequential. When drugs are approved by the FDA, health insurance pays for them. The big money was not in acute pain, which goes away, or cancer pain, where patients die quickly, but in chronic pain, which is endless.

Read more …

Jan 212018
 
 January 21, 2018  Posted by at 11:09 am Finance Tagged with: , , , , , , , , , , ,  3 Responses »


Francisco Goya The Dog 1819-23

 

US Senate In Weekend Bid To End Shutdown Impasse (BBC)
Trump’s Trip To Davos Is Up In The Air Because Of The Shutdown (CNBC)
Republicans Have Four Easy Ways to #ReleaseTheMemo – and the Evidence (GG)
China Orders Banks To Stop Financing Cryptocurrencies (SCMP)
China Urges U.S. to Abandon ‘Cold War’ Mindset (BBG)
Britain’s Tired Old Economy Isn’t Strong Enough For Brexit (G.)
Macron: Bespoke Brexit Deal Possible If UK Accepts ‘Preconditions’ (G.)
Athens Hopeful For Eurogroup Decisions Despite Problems (K.)
In New Zealand, 100% Pure Is 100% Propaganda (Stuff)
Ain’t No Sunshine: Winter Is One Of Darkest Ever For Parts Of Europe (G.)
Turkey Threatens Refugee Deal With EU (K.)
15 Syrian Refugees Found Frozen To Death On Lebanon Border (BBC)

 

 

Let it go down; why maintain the illusion that the system functions?

US Senate In Weekend Bid To End Shutdown Impasse (BBC)

The US Senate is due back in session to try to end a budget impasse before the start of the working week when the shutdown of many federal services will be felt around the country. Hundreds of thousands of federal staff face the prospect of unpaid leave. On Saturday, recriminations flew around over the Senate’s failure to pass a new budget and prevent the shutdown. A bill to fund the federal government for the coming weeks did not receive the required 60 votes by Friday. The Republican leader of the US Senate, Mitch McConnell, has said there will be a vote at 01:00 in the early hours of Monday (06:00 GMT) on a bill to fund the government until 8 February. The last government shutdown was in 2013, and lasted for 16 days.

This is the first time a government shutdown has happened while one party, the Republicans, controls both Congress and the White House. The vote on Friday was 50-49, falling far short of the 60 needed to advance the bill. With a 51-seat majority in the Senate, the Republicans do not have enough votes to pass the bill without some support from the Democrats. They want funding for border security – including the border wall – and immigration reforms, as well as increased military spending. The Democrats have demanded protection from deportation of more than 700,000 undocumented immigrants who entered the US as children.

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No gloating.

Trump’s Trip To Davos Is Up In The Air Because Of The Shutdown (CNBC)

Donald Trump was set to be the first U.S. president to attend the World Economic Forum in Davos, Switzerland, in nearly two decades, but the government shutdown might have scrambled those plans. White House budget chief Mick Mulvaney said Saturday that Trump’s plans to travel to Davos next week are up in the air while Congress scrambles to strike a deal to fund the federal government. “We’re taking Davos, from the president’s perspective and the Cabinet’s perspective, on a day-by-day basis,” Mulvaney told reporters during an impromptu briefing. The government shut down at midnight Friday, after congressional negotiators failed to pass a budget.

Earlier in the day, Trump cancelled a planned trip to Florida, where he was scheduled to host a party at his private Mar-a-Lago club to mark the one year anniversary of his inauguration. Tickets for the Mar-a-Lago party begin at $100,000 per couple, and proceeds will benefit the Trump reelection campaign and the Republican National Committee. On Saturday, RNC staffers were busy setting up TV screens in the private club, so Trump could address the guests via satellite, according to CNN. The budget impasse showed no signs of letting up on Saturday, as both Democrats and Republicans dug their heels in, and each party blamed the other. The president is scheduled to depart for Switzerland on Wednesday, along with a delegation of more than a dozen Cabinet members, including Treasury Secretary Steven Mnuchin, and top White House aides.

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They have to release it, no choice.

Republicans Have Four Easy Ways to #ReleaseTheMemo – and the Evidence (GG)

One of the gravest and most damaging abuses of state power is to misuse surveillance authorities for political purposes. For that reason, The Intercept, from its inception, has focused extensively on these issues. We therefore regard as inherently serious strident warnings from public officials alleging that the FBI and Department of Justice have abused their spying power for political purposes. Social media last night and today have been flooded with inflammatory and quite dramatic claims now being made by congressional Republicans about a four-page memo alleging abuses of Foreign Intelligence Surveillance Act spying processes during the 2016 election.

This memo, which remains secret, was reportedly written under the direction of the chair of the House Permanent Select Committee on Intelligence, GOP Rep. Devin Nunes, and has been read by dozens of members of Congress after the committee voted to make the memo available to all members of the House of Representatives to examine in a room specially designated for reviewing classified material. The rhetoric issuing from GOP members who read the memo is notably extreme. North Carolina Republican Rep. Mark Meadows, chair of the House Freedom Caucus, called the memo “troubling” and “shocking” and said, “Part of me wishes that I didn’t read it because I don’t want to believe that those kinds of things could be happening in this country that I call home and love so much.”

GOP Rep. Scott Perry of Pennsylvania stated: “You think about, ‘Is this happening in America or is this the KGB?’ That’s how alarming it is.” This has led to a ferocious outcry on the right to “release the memo” – and presumably thereby prove that the Obama administration conducted unlawful surveillance on the Trump campaign and transition. On Thursday night, Fox News host and stalwart Trump ally Sean Hannity claimed that the memo described “the systematic abuse of power, the weaponizing of those powerful tools of intelligence and the shredding of our Fourth Amendment constitutional rights.” Given the significance of this issue, it is absolutely true that the memo should be declassified and released to the public — and not just the memo itself.

The House Intelligence Committee generally and Nunes specifically have a history of making unreliable and untrue claims (its report about Edward Snowden was full of falsehoods, and prior claims from Nunes about “unmasking” have been discredited). Thus, mere assertions from Nunes — or anyone else — are largely worthless; Republicans should provide American citizens not merely with the memo they claim reveals pervasive criminality and abuse of power, but also with all of the evidence underlying its conclusions.

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Don’t worry, the shadow banks will.

China Orders Banks To Stop Financing Cryptocurrencies (SCMP)

The People’s Bank of China has ordered financial institutions to stop providing banking or funding to any activity related to cryptocurrencies, further tightening the noose since its shutdown of crypto exchanges last September sent digital currency enthusiasts fleeing overseas. “Every bank and branch must carry out self-inspection and rectification, starting from today,” according to a document issued by the central bank on Wednesday. “Service for cryptocurrency trading is strictly prohibited. Effective measures should be adopted to prevent payment channels from being used for cryptocurrency settlement.” The Chinese-language document, as seen by the South China Morning Post, was distributed as an internal document among banks, and not published on the central bank’s official website.

“Banks should enhance their daily transaction monitoring, and the timely shut down of the payment channel once they discover any suspected trading of cryptocurrencies,” the document said, adding that the deadline for disclosing the measures is on January 20. The emphasis was on handling any capital settlement to avoid any financial losses by cryptocurrency investors from escalating into public protests – known as “group events” in China – and preserve social stability, the central bank said. [..] Chinese cryptocurrency traders, who once dominated 90 per cent of the world’s trading volume of bitcoin, the most popular and oldest form of cryptocurrency, have moved to the underground market, or overseas to Japan. Bitcoin is considered legal tender in Japan.

“Most of the trading is taking place via US dollar now, as some big accounts active in digital currency trading are already on China’s official watch list and payment channel already blocked,” said Zhao Dong, an individual bitcoin investor who spends most of his time in Japan now. “This move by the PBOC is further pushing capital and innovation out of China.” Still, a person no less than Zhou Xiaochuan, the longest-serving governor in the Chinese central bank, has himself announced that the People’s Bank of China itself is studying the feasibility of developing its own digital currency.

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As does Russia.

China Urges U.S. to Abandon ‘Cold War’ Mindset (BBG)

China’s National Defense Ministry said the U.S. should abandon a “Cold War” mindset and view Chinese national security and military efforts “rationally and objectively.” The instigators of militarization of the South China Sea are “other countries” that don’t seem to want to see peace in the region and are using the banner of “navigational freedom” to undertake military activities in a tyrannical manner, ministry spokesman Ren Guoqiang said in a statement released late Saturday. The statement was in response to a U.S. Defense Department strategy report, released last week, that singled out China’s military modernization and expansion in the South China Sea as key threats to U.S. power.

China has undertaken massive land reclamation in the contested waterway that hosts $5 trillion in trade a year, to strengthen its claim to more than 80 percent of the area. That has strained ties with other claimant states, such as Vietnam and the Philippines, as well as the U.S. The National Defence ministry’s statement on Saturday came shortly after China’s Foreign Ministry vowed to take “necessary measures” to safeguard its sovereignty after a U.S. warship entered waters surrounding the Huangyan Island in the South China Sea. China’s activities in the South China Sea is “a matter within China’s sovereign rights,” Ren said, adding that the country is committed to a path of peaceful development and a harmonious world order.

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A good point not particularly well made.

Britain’s Tired Old Economy Isn’t Strong Enough For Brexit (G.)

Brexit, at its heart, is a recognition that Britain has become steadily weaker since it spent much of its empire wealth fighting two world wars – too feeble in the years before the 2016 referendum to sustain an exchange rate of $1.60 and €1.40, just as it was too poor to cope with $4 to the pound in the 1950s and $2 to the pound in 1992. Manufacturers were unable to make things cheaply, reliably or efficiently enough against the headwind of a high-value currency, forcing many to give up. An economy that boasted 20% of its income coming from manufacturing in the 1980s found it was the source of barely 10% at the beginning of this decade.

Surges in GDP growth in the 70 years since the war can be attributed (and this short list makes the point crudely) to periods when there were cheap raw materials and energy costs; or a growing population; or foreign ownership and management of key industries; or the offloading of vast amounts of state and mutually owned assets; or cheap borrowing. Without these in operation to improve the UK’s performance, a lower exchange rate became inevitable. Some Brexit campaigners made a cheaper currency their explicit aim, arguing that while Britain’s wealth and standing in the world would be diminished in the short term, the breathing space given to manufacturers would allow them to sell abroad at cheaper prices, then use the funds to invest and gain the efficiencies needed to cope with a return to a higher exchange rate sometime in the next decade.

There is a good deal of logic to the argument, but it rests, like so many revolutionary aims, on the many and competing forces in the economy doing exactly what its proponents want them to. For instance, manufacturers, with a few honourable exceptions, have refused to invest more than the bare minimum for decades, even when the exchange rate has helped them. There are windfall profits to be made when currencies fall: but these windfalls have been trousered by shareholders, not invested.

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Little emperor.

Macron: Bespoke Brexit Deal Possible If UK Accepts ‘Preconditions’ (G.)

Emmanuel Macron has said it would be possible for Britain to secure a bespoke trade deal but only if the UK accepts certain “preconditions”. The French president said that while a special solution could be secured, full access to the single market without accepting its rules was “not feasible”. The comments were made during an interview recorded for BBC One’s The Andrew Marr Show on Sunday. Macron has been in the UK for his first visit since taking office. On Thursday, at the end of a joint press conference with Theresa May at Sandhurst military training college, he rejected the idea of a tailored Brexit deal for Britain’s financial services sector. Macron said full access to EU markets would not be possible unless the UK paid into the EU budget and accepted all its rules.

In the interview with Marr, he said there was “a competition between different countries” to attract financial services companies in the future and that France wanted “to attract the maximum activity”. The Brexit secretary, David Davis, has said he is seeking a “Canada plus plus plus” arrangement, based on the EU-Canada trade treaty, but with additional access for services. However, EU negotiators have stressed that Britain would not be allowed to “cherry-pick” sectors. Pressed on whether there would be a bespoke special solution for the UK, Macron said: “Sure, but … this special way should be consistent with the preservation of the single market and our collective interests. “And you should understand that you cannot, by definition, have the full access to the single market if you don’t tick the box.” He added: “So it’s something perhaps between this full access and a trade agreement.”

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It’s starting to feel like Stockholm Syndrome.

Athens Hopeful For Eurogroup Decisions Despite Problems (K.)

Eurozone finance ministers are to meet in Brussels on Monday to assess Greece’s progress in enforcing economic reforms, decide whether to disburse 6.7 billion euros in bailout loans and, Athens hopes, signal talks on debt relief. It was unclear if the loan tranche would be disbursed in its entirety, as some prior actions are pending. However, Greek officials sounded upbeat following a decision late on Friday by Standard & Poor’s to raise Greece’s sovereign credit rating from B- to B with a positive outlook. “Greece’s growth and fiscal outlooks have improved alongside a labor market recovery and amid a period of relative policy certainty,” S&P said.

“These positive developments boost the sense that the trust of the markets and investors in the Greek economy is being restored with steady steps,” the Finance Ministry said on Saturday. “With the conclusion of the program in August 2018 and the securing of steady access to the markets, the Greek economy is definitely moving away from a long period of crisis.” Despite the upbeat rhetoric, there are divisions within SYRIZA over government policies, particularly in the radical Group of 53 faction. In comments to SYRIZA’s central committee on Saturday, Finance Minister Euclid Tsakalotos conceded that there are “many short-term problems” and underlined two major risks. “One is the banks and the other is the IMF,” he said.

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Nice. Kiwis believe in fairy tales.

In New Zealand, 100% Pure Is 100% Propaganda (Stuff)

Ask Tourism New Zealand what 100% Pure means and they’ll tell you: it’s not a ‘clean, green’ campaign, but a campaign that delivers a “100% Pure New Zealand experience”. What it is is 100% pure advertising, and a slogan fit to replace the fertiliser used in the country’s intensive farming. But while Kiwis do seem to be realising there’s something murky about our clean-green image, there is one area we are still fooling ourselves about – the state of our native creatures. Stuff has just wrapped up its Forgotten Species series, a five-part series looking at a handful of the estimated 3700 native species which are either approaching extinction or at risk. Despite having one of the highest proportions of threatened or endangered species of anywhere on the planet, 70% of the public feel the state of our country’s natives is adequate or doing well, according to a recent Lincoln University study.

Ask study co-author Ross Cullen and he will tell you – 70% of the public is “totally wrong”. All countries advertise, and everyone accepts it with a pinch of salt. If we didn’t we would all be jetting off to England expecting a village in the Cotswolds and end up at a sleazy pub in Plumstead, east London. Advertising is advertising, and good advertising brings in tourism money. However, when the public believes its own advertising, it’s no longer advertising, it’s propaganda –and that’s a problem. It’s a problem because if the populace think something’s going well, they ignore it, the political hot-potato cools, and the decline continues. Case in point – the National Government’s Minister for Conservation, Maggie Barry, paraded the new Threatened Species Strategy in front of voters just as the 2017 general election was heating up.

It promised to increase the number of at-risk species directly managed by 40%. On the face of it, this seems great, but when the Budget was released a couple of weeks later, almost all of DOC’s extra funding was ring-fenced for upgrading tourism infrastructure and developing new Great Walks. It was a great ad delivered by a great ex-garden show host. Kiwis might have kicked up a fuss – if the majority didn’t think we were doing a bang up job on protecting native species already. I remember a telling moment after ex-Parliamentary Commissioner for the Environment Jan Wright’s launched her report finding 80% of native birds were threatened. I was present to hear why Tourism Industry Aotearoa chief executive Chris Roberts didn’t fancy this was a problem. “The people come here for our scenery, not our wildlife,” he said. Roberts didn’t disagree with any of the report’s findings, he just thought a visitor levy would do more harm to the country than the rapid die-off of our native birds.

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Depression zone. I went from Athens to Amsterdam 5 weeks ago, lost 2 hours of daylight to begin with, and been dead tired ever since. Vitamin D doesn’t do it either.

Ain’t No Sunshine: Winter Is One Of Darkest Ever For Parts Of Europe (G.)

Sunshine is in short supply across a swathe of north-west Europe, shrouded in heavy cloud from a seemingly never-ending series of low pressure systems since late November and suffering one of its darkest winters since records began. If you live in Brussels, 10 hours and 31 minutes was your lot for the entire month of December. The all but benighted inhabitants of Lille in France got just two hours, 42 minutes through the first half of January. “Sound the alarm and announce the disappearance,” read a despairing headline in photon-deprived northern France’s regional paper, La Voix du Nord. “A star has been kidnapped. We still have no sign of life from the sun.”

Belgium’s Royal Meteorological Institute has declared December 2017 “the second darkest month since 1887”, when it began measuring, after the 10.5 hours of sun recorded at its Uccle weather station last month were beaten only by a bare 9.3 hours in 1934. France’s northern Hauts-de-France region did better with 26 hours of sunshine in December, but that was against a norm of 48. But Météo France described the paltry 2.7 hours of sun recorded from 1 to 13 January in Lille, the region’s biggest city, as “exceptional”. The January average stands at 61.4 hours, according to the agency – meaning Lille and its unfortunate residents were deprived of perhaps 30 hours’ worth of rays in the first part of the month.

[..] Even southern French sun-traps such as Bordeaux and Marseille fell a very long way short of their usual ray quota in the first half of the month, basking in just 10.3 and 26.9 hours respectively against monthly averages of 96 and 92.5. Health experts say a shortage of sunshine can lead to seasonal depression, whose symptoms include a lack of energy, a desire to sleep and a perceived need to consume greater quantities of sugar and fat. “Exposure to morning light inhibits the secretion of melatonin that promotes sleep and favours the production of hormones that will stimulate the body,” Matthieu Hein, a psychiatrist at the Erasmus Hospital in Brussels, said. In the absence of light, we are “rather slow, tired, which is characteristic of SAD, or seasonal affective disorder”. Florent Durand, who runs a massage studio in Lille, told France 3 TV that his €39 light therapy sessions were booked out.

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As Turkey bombs US supported Kurds, Erdogan feels like a god.

Turkey Threatens Refugee Deal With EU (K.)

Turkey’s agreement with the European Union to curb human trafficking across the Aegean appears to be in jeopardy again after a top Turkish official warned that a current impasse with the EU gives Ankara no reason to honor the deal. A collapse of the deal would put more pressure on Greek islands where thousands of migrants are cooped up in overcrowded reception centers. The comments on Friday by Turkey’s minister for EU affairs, Omer Celik, essentially rejected a proposal by French President Emmanuel Macron for a partnership rather than full EU membership for Turkey. “A privileged partnership or similar approaches, we don’t take any of these seriously. Turkey cannot be offered such a thing,” Celik told Reuters.

Celik said the EU was not fully honoring its part of the migration deal, noting that financial aid was “not working well” and that no new chapters have been opened in Turkey’s EU accession bid. “Technically there’s no reason for Turkey to maintain this deal,” he said. The minister’s words echoed those of Turkish President Recep Tayyip Erdogan, who, during a landmark visit to Greece in December, hit out at the EU for giving Turkey just a portion of the aid it had pledged as part of the 2016 migrant deal. During Erdogan’s visit, Prime Minister Alexis Tsipras proposed that Turkey take back migrants from facilities on the Greek mainland to free up space for migrants from overcrowded camps on the islands. Erdogan did not publicly respond to the suggestion.

After Celik’s comments on Friday, a spokesman for the Greek Migration Ministry said the government’s position, that all sides must honor the Turkey-EU deal, remained “fixed and firm.” Migration Minister Yiannis Mouzalas visited Lesvos on Friday, together with Valentin Radev, the interior minister of Bulgaria, which holds the EU’s rotating presidency. Mouzalas reassured local residents, who had gathered at the Moria facility, that measures would be taken to ensure that migrants alleged to have been involved in thefts or other offenses will no longer be allowed to leave the premises. Lesvos Mayor Spyros Galinos said the minister was not doing enough to adequately inform residents and was shifting the blame for the situation on the islands on to local authorities.

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New year, same old lack of humanity.

15 Syrian Refugees Found Frozen To Death On Lebanon Border (BBC)

Fifteen Syrian refugees – some of them children – have been found frozen to death while trying to cross the mountainous border into Lebanon. Thirteen bodies were found on Friday and two more were discovered on Saturday after the area was hit by a fierce snowstorm. Lebanese civil defence officials found the bodies after being told a group of refugees were in trouble near Masnaa. Local reports say the group had been abandoned by smugglers. Two smugglers have reportedly been arrested.

Several refugees were rescued, including a young boy who was found wandering by himself. The group were taking the same route hundreds of thousands of Syrians have taken before them trying to flee the conflict at home. Lebanon, with a population of four million, has taken in nearly one million Syrians since the war began in 2011. The Lebanese authorities brought in new restrictions in 2015 to try to restrict the number of refugees arriving in the country.

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Jan 202018
 


Vincent van Gogh Lane near Arles 1888

 

US Government Shutdown Begins As Spending Bill Fails In Senate (R.)
Trump To Tout US Economy, Urge Fair Trade At Elite Davos Forum (R.)
What Will Rising Mortgage Rates Do to Housing Bubble 2? (WS)
Fever Pitch (Jim Kunstler)
NSA Deleted Surveillance Data Court Had Ordered It To Preserve (Pol.)
Russia Accuses US Of “Carving Out Alternative Government” In Syria (ZH)
Europe Must Wake Up To Drastic Consequences Of A Hard Brexit (Joris Luyendijk)
UK Banks Turn Off Lending Taps To Households (G.)
The Carillion Whitewash (Coppola)
Hundreds Of UK MPs Call On Supermarkets To Scrap Plastic Packaging (G.)
The Untreatable: The Centenary of Spanish Flu (LRB)

 

 

Maybe it’s better this way: expose the failing systems. Bring out your dead.

US Government Shutdown Begins As Spending Bill Fails In Senate (R.)

The U.S. government shut down at midnight on Friday after Democrats and Republicans failed to reach a last-minute deal to fund its operations, divided in a bitter dispute over immigration and border security. In a dramatic late-night session, senators blocked a bill to extend government funding through Feb. 16. The bill needed 60 votes in the 100-member Senate but fell short, with only 50 supporting it. Most Democrats opposed the bill because their efforts to include protections for hundreds of thousands of mostly young immigrants known as Dreamers failed. Huddled negotiations by Senate Majority Leader Mitch McConnell and Senate Democratic leader Chuck Schumer in the last minutes before midnight were unsuccessful, and the U.S. government technically ran out of money at midnight.

The shutdown formally began on Saturday, the first anniversary of President Donald Trump’s inauguration. Trump immediately sought to blame Democrats. “Tonight, they put politics above our national security, military families, vulnerable children, and our country’s ability to serve all Americans,” the White House said in a statement. It also said it would not discuss immigration until the government is up and running again. “We will not negotiate the status of unlawful immigrants while Democrats hold our lawful citizens hostage over their reckless demands. This is the behavior of obstructionist losers, not legislators.” In return, Schumer pointed the finger directly at Trump. “It’s almost as if you were rooting for a shutdown and now we’ll have one and the blame should crash entirely on President Trump’s shoulders,” he said.

Until a funding deal is worked out, scores of federal agencies across the country will be unable to operate, and hundreds of thousands of “non-essential” federal workers will be put on temporary unpaid leave. The Republican-controlled House of Representatives passed a stopgap funding measure on Thursday. But Republicans then needed the support of at least 10 Democrats to pass the bill in the Senate. While five Democrats ended up voting for the measure, five Republicans voted against it. Democratic leaders demanded that the measure include protections from deportation for about 700,000 undocumented immigrants known as Dreamers who arrived in the United States as children.

Despite bipartisan negotiations, Republican leaders refused to include those protections, and neither side was willing to back down. McConnell and Schumer insisted they were still committed to finding an agreement that restores government funding as soon as possible. Trump, who had made strict measures on immigration a cornerstone of his presidential campaign, last week rejected a bipartisan proposal, saying he wanted to include any deal for Dreamers in a bigger legislative package that also boosts funding for a border wall and tighter security at the U.S. border with Mexico.

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A lion’s den indeed.

Trump To Tout US Economy, Urge Fair Trade At Elite Davos Forum (R.)

U.S. President Donald Trump will be entering something of a lion’s den when he visits the elitist enclave of Davos next week, rubbing shoulders with the same “globalists” that he campaigned against in winning the 2016 election. Aides said some of Trump’s advisers had argued against him attending the World Economic Forum in order to steer clear of the event, which brings together political leaders, CEOs and top bankers. But in the end, they said, Trump, the first sitting U.S. president to attend the forum since Bill Clinton in 2000, wanted to go to call attention to growth in the U.S. economy and the soaring stock market. A senior administration official said Trump is expected to take a double-edged message to the forum in Switzerland, where he is to deliver a speech and meet some world leaders.

In his speech, Trump is expected to urge the world to invest in the United States to take advantage of his deregulatory and tax cut policies, stress his “America First” agenda and call for fairer, more reciprocal trade, the official said. During his 2016 election campaign, Trump blamed globalization for ravaging American manufacturing jobs as companies sought to reduce labor costs by relocating to Mexico and elsewhere. “Globalization has made the financial elite who donate to politicians very wealthy. But it has left millions of our workers with nothing but poverty and heartache,” he said on June 28, 2016, in Pennsylvania. Trump retains the same anti-globalist beliefs but has struggled to rewrite trade deals that he sees as benefiting other countries.

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This is going to hurt.

What Will Rising Mortgage Rates Do to Housing Bubble 2? (WS)

The US government bond market has further soured this week, with Treasuries selling off across the spectrum. When bond prices fall, yields rise. For example, the two-year Treasury yield rose to 2.06% on Friday, the highest since September 2008. In the chart, note the determined spike of 79 basis points since September 8, 2017. That was the month when the Fed announced the highly telegraphed details of its QE Unwind. September as month of the QE-Unwind announcement keeps cropping up. All kinds of things began to happen, at first quietly, without drawing much attention. But then the trajectory just kept going.

The three-year yield, which had gone nowhere for the first eight months of 2017, rose to 2.20% on Friday, the highest since October 1, 2008. It has spiked 82 basis points since September 8:

The ten-year yield – the benchmark for financial markets that most influences US mortgage rates – jumped to 2.66% late Friday. This is particularly interesting because the 10-year yield had declined from March 2017 into August despite the Fed’s three rate hikes last year, and rising short-term yields. At 2.66%, the 10-year yield has reached its highest level since April 2014, when the “Taper Tantrum” was winding down. That Taper Tantrum was the bond market’s way of saying “we’re shocked and appalled,” when Chairman Bernanke dropped hints the Fed might eventually begin tapering what the market had called “QE Infinity.” The 10-year yield has now doubled since the historic intraday low on July 7, 2016 of 1.32% (it closed that day at 1.37%, a historic closing low):

Friday capped four weeks of pain in the Treasury market. But it has not impacted yet the corporate bond market, and the spread in yields between Treasuries and corporate bonds, and particularly junk bonds, has further narrowed. And it has not yet impacted the stock market, and there has been no adjustment in the market’s risk pricing yet. But it has impacted the mortgage market. On Friday, the average 30-year fixed-rate mortgage with conforming loan balances ($417,000 or less) for top-tier borrowers, according to Mortgage News Daily, ended at 4.23%, the highest in nine months. But historically, 4.25% is still very low. And likely just the beginning of a long, uneven climb higher. And the impact on mortgage payments can be sizable. When rates rise for example from 3.5% to 4.5%, the payment for a $250,000 mortgage jumps by $144 to $1,267 a month. This can move the payment out of reach for households that have trouble making ends meet.

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Rising markets and fever as flu symptoms.

Fever Pitch (Jim Kunstler)

In case you’re worked up about the looming federal government shut-down, this is exactly how we’re supposed to roll in the long emergency: everything organized at the gigantic scale is going to wobble and fail. It’s nature’s way of saying, “get smaller, get realer, scale down, and get local.” The catch is, we probably won’t listen to nature. Instead, we’ll just behave like bystanders and do nothing until the full force of failure is upon us, just as we’re doing with climate change — the tragedy of the commons at planetary scale. The failure of national party politics is deep and systemic, as you would expect from activities nurtured in a shit-hole called Washington, corruption being the manifestation of sepsis. The lethal vector of this illness is money.

There’s the money flowing into the “campaign funds” (so-called) of congressmen and senators, of course, but there’s also the “money” that is flowing in and out of the leviathan government — a whole lot of it is not really there. It’s a figment of promises to pay back loans on top of a monumental heap of past promises that will never be kept. The threatened government shutdown is just a symptom of the illness: a society doing things out of scale, trying to run its excessive activities by check-kiting and accounting fraud. What could go wrong? Not the stock and bond markets, I’m sure. Though… wait a minute… that hockey-stick surge in equities looks a little bit like the action of a thermometer measuring the rising body temperature of a very sick patient.

From 25,000 to 26,000 on the Dow — in what? seven days? — is kind of like the flu victim going from 98.6 to 105 after onset. And we know what happens to humans up around the 105 Fahrenheit body temperature level: the brain starts to sputter and smoke. Soon, it’s lights out and don’t let your karma smack you on the butt going through the exit.

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State within the state. F*ck the courts.

NSA Deleted Surveillance Data Court Had Ordered It To Preserve (Pol.)

The National Security Agency destroyed surveillance data it pledged to preserve in connection with pending lawsuits and apparently never took some of the steps it told a federal court it had taken to make sure the information wasn’t destroyed, according to recent court filings. Word of the NSA’s foul-up is emerging just as Congress has extended for six years the legal authority the agency uses for much of its surveillance work conducted through U.S. internet providers and tech firms. President Donald Trump signed that measure into law Friday. Since 2007, the NSA has been under court orders to preserve data about certain of its surveillance efforts that came under legal attack following disclosures that President George W. Bush ordered warrantless wiretapping of international communications after the 2001 terrorist attacks on the U.S.

In addition, the agency has made a series of representations in court over the years about how it is complying with its duties. However, the NSA told U.S. District Court Judge Jeffrey White in a filing on Thursday night and another little-noticed submission last year that the agency did not preserve the content of internet communications intercepted between 2001 and 2007 under the program Bush ordered. To make matters worse, backup tapes that might have mitigated the failure were erased in 2009, 2011 and 2016, the NSA said. “The NSA sincerely regrets its failure to prevent the deletion of this data,” NSA’s deputy director of capabilities, identified publicly as “Elizabeth B.,” wrote in a declaration filed in October. “NSA senior management is fully aware of this failure, and the Agency is committed to taking swift action to respond to the loss of this data.”

In the update Thursday, another NSA official said the data were deleted during a broad, housecleaning effort aimed at making space for incoming information. “The NSA’s review to date reveals that this [Presidential Surveillance Program] Internet content data was not specifically targeted for deletion,” wrote the official, identified as “Dr. Mark O,” “but rather the PSP Internet content data matched criteria that were broadly used to delete data of a certain type … in response to mission requirements to free-up space and improve performance of the [redacted] back-up system. The NSA is still investigating how these deletions came about given the preservation obligations extant at the time. The NSA, however, has no reason to believe at this time that PSP Internet content data was specifically targeted for deletion.”

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With Turkey starting an extensive bombing campaign, Syria could explode once again.

Russia Accuses US Of “Carving Out Alternative Government” In Syria (ZH)

Russia’s Foreign Minister Sergey Lavrov has accused the United States of working to carve out “an alternative government” on Syrian soil in statements made at a UN press briefing related to the recent Turkish military build-up poised to assault Syrian Kurdish areas of Northern Syria. Lavrov’s words come after Secretary of State Rex Tillerson pledged in a speech on Wednesday that US military forces would remain in Syria indefinitely until various objectives are met, which include Syrian government transition and the curtailing of Iran’s influence. Lavrov said “It’s a fact that US forces are seriously involved in creating alternative government bodies on vast part of the Syrian territory. And this, of course, absolutely contradicts their own obligations, which they committed to on numerous occasions, including at the UN Security Council, on maintaining the sovereignty and the territorial integrity on Syria.”

The Russian FM further accused the US of contradicting its previous claim that US troops – which number at least 2,000 according to recent Pentagon statements – were only in Syria to fight the Islamic State and not wage a proxy war against the Syrian government and its allies. The prior US policy of regime change in Syria, which began under the Obama administration and intensified under a CIA program, was something many analysts perceived that President Trump had abandoned – consistent with earlier campaign promises. In the summer of last year Trump shut down the CIA program – widely reported to be the agency’s largest covert program – even while boosting support for the Pentagon program to arm and train the predominately Kurdish Syrian Democratic Forces (SDF).

“Rex Tillerson told me many times that the only reason for their presence there [in Syria] is defeating Islamic State (IS, formerly ISIS/ISL). Now they have some much more long-standing plans,” Lavrov said further of the inconsistency in US policy. “We will have to take this into account and look for solutions that won’t allow the destruction of Syrian sovereignty.”

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Bit late, perhaps?

Europe Must Wake Up To Drastic Consequences Of A Hard Brexit (Joris Luyendijk)

Because it is such a riveting clown show with new crazy episodes almost every day, Europeans can be forgiven for ignoring the fact that Brexit is going to hurt them too. But as the date of Britain’s departure comes closer and Theresa May’s government continues its kamikaze policy of demanding the politically unthinkable from the EU, it is time for Europeans to wake and begin preparing for the worst. On Thursday the Dutch government published a report drawn up by the consultancy firm KPMG analysing the consequences of a “no-deal” Brexit in which the UK leaves the EU without an agreement on 29 March 2019.

Here are the practical implications and cold numbers behind the hot-headed rhetoric about no deal with the EU being “better than a bad deal” for Britain: should the UK “crash” out of the EU by late March 2019 the Dutch companies trading with the UK will have to secure a total of no less than 4.2m exporting and 750,000 importing licences. If by this time both states have a functioning customs system in place – a big if for this consistently incompetent UK government – costs for companies are between €80 and €130. That is per licence. The price tag for all this new red tape is €600m for the Dutch side alone. This excludes the costs of new export and import tariffs, VAT and other new “sector-specific” barriers for trading with the UK.

The 35,000 small and medium-sized businesses unused to trading with non-EU countries also face an estimated cost of €20,000-€50,000 to adapt their IT systems. Added to this, warns the report, must be the likely effects of the inevitable economic slowdown, or worse, in Britain. When the country leaves without a deal it must “fall back” on the minimal WTO rules for trade. But financial services and aviation fall outside the WTO regime, meaning that after a British no-deal departure both sectors must stop trading with the EU overnight. Between Amsterdam Schiphol airport and London alone there are currently 60 flights a day – one every 15 minutes.

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“The richest 10% spent more on wine per week (£9.40) than the poorest 10% spent on water..”

UK Banks Turn Off Lending Taps To Households (G.)

There is little for the average household to cheer these days as inflation crushes paltry earnings increases. Inflation is running at 3% while wage rises can manage no more than 2.5%. Worse for the average household, the banks are beginning to turn off the lending taps that have allowed them to boost their incomes with cheap debt. Things were better in the year to April 2017, according to the number crunchers at the Office for National Statistics, who have lifted the lid on Britain’s spending habits in their annual family spending report. It shows that average weekly household spending clawed its way back from the depths of the 2009 recession to exceed the pre-crisis level for the first time.

This slice of good news, albeit five or six years later than many economists thought it would happen, disguises how the better off have thrived compared to those on the bottom rung of the income ladder. For instance the richest 10% spent more on wine per week (£9.40) than the poorest 10% spent on water (£7.30). In the same vein, the richest 10% spent £59.40 on “furniture and furnishings, carpets and other floor coverings” to almost match how much the poorest 10% spent on rent (£62.70). Challenging the idea that the poorest waste their money on booze and cigarettes, the survey found that the richest 10% devote twice as much of the weekly shop (£17.50) to “alcoholic drinks, tobacco and narcotics” as the poorest. But it is the new rich, the 65- to 74-year-olds that really catch the eye.

Their spending might not match that of the top 10%, yet it significantly powers ahead of anything the average 20-something can muster on areas like entertainment and recreation. The figures show that people in the 10 years from their 65th birthday go on a spending binge that means devoting nearly a fifth of their total expenditure on recreation and culture, double the 10% spent by the under-30s. This is the final salary pension bonanza that can only be described as a once in a generation spending boost. The same applies to those of all ages on below average incomes. They increased their spending by a startling 7% on the previous year, far more than the 1% increase across the richest half of households. Unfortunately they managed this largely by running down savings and taking on extra debt.

As banks, under instruction from the financial regulator, rein in their lending, debt-fuelled spending should be considered a one-off boon, just like the final salary payout. However, that seems unlikely. Banks remain dependent for profit on lending.

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Another bunch of lies that will go unpunished.

The Carillion Whitewash (Coppola)

The Carillion whitewash has begun. Carillion’s interim CEO, Keith Cochrane, is spinning the line that had banks not pulled funding, its collapse could have been averted. And the Financial Times has released details of a letter Carillion sent to the Government at the beginning of January, in which it asked for short-term advances to tide it over while it underwent restructuring. Labour MP Pat McFadden has written to the Treasury Secretary asking whether it would have been more cost-effective for the U.K. Government to support Carillion, rather than allowing it to collapse. This looks to me like a campaign to deflect blame from Carillion’s management to its lenders and customers. We are being led to believe that it wasn’t insolvent, it was just illiquid, and depriving it of short-term funds caused a completely unnecessary collapse.

Deliciously, the bank Cochrane principally accuses of precipitating Carillion’s collapse by depriving it of funds is RBS, which was rescued at taxpayer expense in the 2008 financial crisis. Something tells me Cochrane’s fingering of RBS is no accident. For a bailed-out bank to refuse to provide a major Government contractor with short-term funds looks at best ungrateful and at worst insulting. Of course, RBS is itself a past master at playing the “we’re not insolvent, we are just illiquid” game. On the day that RBS failed, in September 2008, RBS’s CEO, Fred Goodwin, insisted that the bank was solvent. “We don’t have a capital problem,” he said. “We have a liquidity problem. All we need is short-term cash”.* But in fact, RBS was deeply insolvent. Rescuing it cost the U.K. Government £45bn, and RBS has lost a further £58bn since. Nearly ten years after the crisis, it is still in majority public ownership.

The similarity to RBS’s collapse is striking. Less than a week after Carillion’s failure, we now know that it is deeply insolvent. A couple of days after it filed for compulsory liquidation, Carillion’s unsecured bonds were trading at only 2.4% of par: This is an extraordinary writedown. It implies that bondholders expect to get back almost none of their investment. And this is senior unsecured debt, not subordinated debt or equity. The holders of anything more junior have already been wiped.

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All of a sudden everyone wakes up at the same time. But why have supermarkets and Coca Cola never done anything about it? And what are the odds they will once the atttention dies down?

Hundreds Of UK MPs Call On Supermarkets To Scrap Plastic Packaging (G.)

Two hundred cross-party MPs are calling on heads of the major supermarkets to eliminate plastic packaging from their products by 2023. The MPs, who are from seven political parties, have written to Tesco, Sainsbury’s, Morrisons, Asda, Waitrose, Aldi, Lidl, Budgens and Marks & Spencer urging them to scrap plastic packaging. They wrote after the Guardian revealed this week the major supermarkets in the UK create more than 800,000 tonnes of plastic packaging waste – well over half the household plastic waste – each year. Six of the major supermarkets refused to reveal the amount of plastic packaging they put on to the market, saying the information was commercially sensitive. Analysis by Eunomia environmental consultants used figures provided by Aldi and the Co-op – the only chains to release public figures on their plastic tonnage – and the market share of each supermarket to estimate how much plastic packaging the chains produce each year.

This week, Iceland announced it would stop plastic packaging on its own brand products by 2023. Catherine West, Labour MP for Hornsey and Wood Green, who is behind the letter, said: “Vast amounts of plastic are ‘used’ for merely a few seconds before being discarded. “We have a moral duty to tackle this disposable culture. As such, I welcome the recent announcement from Iceland supermarkets … and I’m delighted that MPs from all parties are supporting my call for other retailers to follow suit.” Waitrose announced on Friday it would no longer use black plastic for its meat, fish, fruit and vegetables by the end of this year, and that all Waitrose products would be free of black plastic by the end of 2019. Black plastic cannot be recycled under current UK systems.

Each year it is estimated that more than 300m tonnes of plastic are produced globally. The Guardian revealed recently that plastic production is set to soar over the next 10 years. On Friday Coca-Cola announced a new goal to collect and recycle the equivalent of 100% of the packaging it sells globally by 2030. Coca-Cola said: “Given the size and scope of this challenge, we expect to invest in new packaging innovations and local collection and recycling systems, as well as consumer education and awareness programs.”

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Good to know your history. Society would be at least as helpless now as 100 years ago, Better medicine, but also 100 times more mobility. And that’s what kills.

The Untreatable: The Centenary of Spanish Flu (LRB)

This year marks the centenary of Spanish flu, the most deadly pandemic in human history. It is estimated that five hundred million people contracted it – a third of the global population in 1918 – and that between fifty and a hundred million of them died. Asians were thirty times more likely to die than Europeans. The pandemic had some influence on the lives of everyone alive today. Donald Trump’s grandfather Friedrich died from it in New York City. He was 49. His early death meant that his fortune passed to his son Fred, who used it to start a New York property empire. My wife’s great-grandmother died from it in Verona; her grandfather, aged eight, had to leave school and find work to support the family. Emilio died in 2011 aged 101.

When I told a friend, the writer Andrew Greig, that I was writing this piece, he told me that his father, born in 1899, came down with Spanish flu while on leave from the war in France. ‘His convalescence delayed his return to the front, where his battalion was all but wiped out,’ Andrew said. ‘He always insisted Spanish flu saved his life, and without it, I suppose I wouldn’t be alive either.’ Laura Spinney’s book attempts to collate what is known about the pandemic, and takes a stab at examining its legacy: ‘The flu resculpted human populations more radically than anything since the Black Death,’ she writes. ‘It influenced the course of the First World War and, arguably, contributed to the second. It pushed India closer to independence, South Africa closer to apartheid, and Switzerland to the brink of civil war. It ushered in universal healthcare and alternative medicine, our love of fresh air and our passion for sport.’

The majority of deaths came in the three months between September and December 1918. The war probably didn’t spawn it, but certainly helped it spread: the US lost more soldiers to flu than to the war in part because so many of them spent weeks coughing together in barracks and transports on their way to Europe. Britain and Italy suffered between two and three times more deaths from the war than from the flu, while Germany’s war deaths outnumbered flu deaths six to one. Spinney quotes historians who claim that flu struck Germany harder than Britain or France; Erich Ludendorff was convinced it had robbed Germany of victory. The spread of Spanish flu was quickened by the railway and steamer lines that girdled the planet, starkly illuminating global inequalities in security, nutrition and access to medical care.

In India 6% of the population died; in Fiji 5%; in Tonga 10%. In Western Samoa, for reasons that aren’t entirely clear, more than 20% of the population died. Even harder hit were the Alaskan Inuit, with a death rate between 25 and 50%: in some small Alaskan communities everybody died. Koreans and Japanese were infected at the same rate, but the Koreans, subject to chronic malnutrition, were twice as likely to die. In the US, Italian immigrants died at twice the background rate (the Italian neighbourhoods of New York had a density of five hundred per acre, ten to a room), while black populations were the least affected. ‘As far as the “Flu” is concerned the whites have the whole big show to themselves,’ J. Franklin Johnson wrote to the Baltimore Afro-American.

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Jan 192018
 


Vincent van Gogh Red Vineyards at Arles 1888

 

The Most Sustainable Stock Market Bubble Ever (MW)
Global Debt Growing Three Times Faster than Global Wealth (Schiff)
US House Passes Stopgap Funding Bill and Sends It to Senate (BBG)
Conservatives Bring Russia Probe Demand to Shutdown Talks (BBG)
FISA Memo Set To Rock DC, “End Mueller Investigation” (ZH)
Hackers Have Walked Off With About 14% of Big Digital Currencies (BBG)
Blockchain Eyed for Mortgage Bundling That Caused 2008 Crisis (BBG)
SEC Says Bitcoin Funds Raise ‘Investor Protection Issues’ (R.)
Oliver Stone’s “Ukraine On Fire” Documentary Released In The West (Quinn)
Blood Test Could Use DNA To Spot Early-Stage Cancers (G.)
Adolescence Now Lasts From 10 to 24 (BBC)
Varoufakis Reveals Outburst Against ‘Stupid’ Tsipras (GR)
Greece Compliance Report Due Friday Ahead of Monday’s Eurogroup (R.)
UK and France Must Stop ‘Systematic Violation’ Of Calais Refugees (Ind.)
HRW Blames Greek Authorities For Abysmal Conditions At Hotspots (K.)

 

 

We’re having to find new semantics. Once sustainable bubbles become acceptable, anything goes…

The Most Sustainable Stock Market Bubble Ever (MW)

Is this the most sustainable stock market bubble ever? It’s rare to find the words “sustainable” and “bubble” in the same sentence, but the stock market rally from November 2016 until now has been relentless enough to at least discuss the notion of a “sustainable bubble.” In February 2016, the S&P 500 recorded three consecutive daily gains of more than 1.5%. The Profit Radar Report highlighted that this happened only eight other times. A year later, the S&P 500 was up 19.16%. The February 2016 kickoff rally continued to build momentum. One way to quantify momentum was shown in the Nov. 19, 2017, Profit Radar Report: “The S&P 500 was higher 8 of the first 9 months of 2017. This has only happened 8 other times (1936, 1950, 1954, 1958, 1964, 1995, 1996, 2006). 2, 3, 6, and 12 months later, the S&P was higher every time but one (0.7% loss 2 month later in 1964).

Such strong momentum readings (and they are seen across all time frames) are extremely rare. As mentioned in December 2016 and March 2017, stocks rarely top out at peak momentum. We have to go back to 1995/1996 to find similarly strong and persistent upside momentum. The stock market infrequently finds the delicate and potent balance between being hot, but not too hot. Tempered relentlessness best describes this market. How relentless? The S&P 500 has not closed more than 1.5% below its all-time high since Aug. 21, 2017. The only other time the S&P 500 has been similarly glued to its all-time high was in 1965. The S&P 500 has not dropped more than 5% below its all-time high since June 27, 2016, and has been above its 200-day simple moving average (SMA) since June 28, 2016.

How tempered? The S&P 500 has traded above its 200-day SMA for 391 days, but, until Jan. 5, also never traded more than 10% above its 200-day SMA. This “sweet spot” range is illustrated by the chart below. For the first time ever, the S&P 500 broke such a “controlled range-bound rally” streak (there’ve been two similar rallies in the 1960s and 1990s) by surging higher instead of falling lower.

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Once debt is subtracted, there’s very little wealth growth left. It’s a mirage.

Global Debt Growing Three Times Faster than Global Wealth (Schiff)

Global wealth increased to a new record of $280 trillion in 2017, according to Credit Suisse Global Wealth Report 2017. That seems like pretty good news until you consider global debt is increasing nearly three times as fast. According to the Wealth Report, total global wealth rose at a rate of 6.4%, the fastest pace since 2012 and reached $280 trillion, a gain of $16.7 trillion. This reflected widespread gains in equity markets matched by similar rises in non-financial assets, which moved above the pre-crisis year 2007’s level for the first time this year. Wealth growth also outpaced population growth, so that global mean wealth per adult grew by 4.9% and reached a new record high of $56,540 per adult.”

Increasing global wealth is one of the trends the World Gold Council identifies as a positive for the gold market in the next year. That’s all well and good. But we have to also look at the other side of the equation. The Institute of International Finance recently released its latest global debt analysis. It reported that global debt rose to a record $233 trillion at the end of Q3 2017. That is split up between $63 trillion in government debt, $58 trillion in financial sector corporate debt, $68 trillion in non-financial sector corporate debt, and $44 trillion in household indebtedness. In just nine months, there was an increase of $16 trillion in worldwide debt.

You really can’t talk about wealth without talking about debt. SRSrocco took a look at both factors in the equation. Even if global wealth surged in 2017, so did world debt. According to the data, global wealth increased by $16.7 trillion in 2017 while global debt expanded $16 trillion… nearly one to one. However, this is only part of the story. If we look at the increase in total world debt and total global wealth over the past 20 years, we can see a troubling sign, indeed: Since 1997, total global debt increased from $50 trillion to $233 trillion compared to the rise in global wealth from $120 trillion to $280 trillion. When you do the math, you find global debt has increased 366% vs. 133% increase in global wealth since 1997. That means net wealth was $70 trillion in 1997 versus $47 trillion in 2017.

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Shaky. A government shutdown could well be imminent.

US House Passes Stopgap Funding Bill and Sends It to Senate (BBG)

The House passed a spending bill Thursday to avoid a U.S. government shutdown, but Senate Democrats say they have the votes to block the measure in a bid to force Republicans and President Donald Trump to include protection for young immigrants. The 230-197 vote came just over a day before current funding is set to run out at midnight Friday. The bill would keep the government open through Feb. 16 while all sides negotiate on longer-term funding for defense and domestic programs. The Senate took an initial vote to advance the bill late Thursday, but was headed toward an additional procedural step requiring 60 votes, which Democrats say they will be able to block. The Senate adjourned until Friday morning without taking further action.

Shortly before the House vote, Trump wrote on Twitter: “House of Representatives needs to pass Government Funding Bill tonight. So important for our country – our Military needs it!” In a show of strength, House Republicans had enough support within their own ranks to pass the measure without help from Democrats. Some members of the conservative House Freedom Caucus withheld their support through much of the day Thursday, but reached a last-minute agreement with Speaker Paul Ryan to hold votes later on a conservative immigration bill and a measure to boost defense spending without increasing non-defense spending.

Still, Senate Democrats said they have the votes to block the measure in their chamber. At least 10 of the 18 Democrats who voted for a temporary funding measure in December have publicly announced their opposition, and a Democratic aide said there won’t be enough party members who support the House bill. Republicans would need at least a dozen Democratic votes to get the bill, H.R. 195, through the Senate after at least three of the 51 Republicans in the chamber said they would vote against it.

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The gloves are coming off.

Conservatives Bring Russia Probe Demand to Shutdown Talks (BBG)

House conservatives negotiating with GOP leaders over how to avert a government shutdown brought a fresh demand to the last-minute talks: release classified information they say raises questions about the origins of the FBI’s probe into President Donald Trump’s possible connections to Russia. A Republican lawmaker said they tried to pressure Speaker Paul Ryan to allow a vote on making public a document they say shows Justice Department and FBI misconduct and political bias in the investigation into Russian meddling in the 2016 presidential campaign and whether anyone close to Trump colluded in it. The facts contained in the memo from Republicans on the House Intelligence Committee are “jaw-dropping and demand full transparency,” said Matt Gaetz, a Florida Republican.

The top Democrat on the Intelligence Committee, Adam Schiff of California, criticized the move. He dismissed the committee document as “talking points” drafted by Republican staffers that he said were “profoundly misleading” and “rife” with inaccuracies. The odd juxtaposition of issues – tying the Russia inquiry to the debate over a stopgap spending bill – came as much of the government faced a threatened shutdown on Friday at midnight. Gaetz said the effort was led by Freedom Caucus Chairman Mark Meadows of North Carolina and caucus co-founder Jim Jordan of Ohio. Jordan confirmed that some conservatives had “highlighted” in continuing resolution talks that it was “extremely important” that the memo go public. He said it was not something they were requiring of the Republican leadership in return for votes.

“But it was something we definitely talked about – that needs to happen,” Jordan added. Meadows earlier referred to “subplots” of promises the Freedom Caucus was able to extract from the leadership before he agreed to support the continuing resolution. “Mr Meadows and Mr. Jordan and many conservatives want to include in this negotiation a requirement that the House make public intelligence documents that highlight the unfair treatment of the president” by the FBI and the Justice Department, Gaetz said. Gaetz said he couldn’t describe the contents of the entire memo put together by the House Intelligence Committee “because to do so would reveal classified information, in the absence of a vote to do so,” he said. “Just 218 votes and the American people can read this intelligence information that goes to the fundamentals of our democracy.”

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So let’s see it.

FISA Memo Set To Rock DC, “End Mueller Investigation” (ZH)

All hell is breaking loose in Washington D.C. tonight after a four-page memo detailing extensive FISA court abuse was made available to the entire House of Representatives Thursday. The contents of the memo are so explosive, says Journalist Sara Carter, that it could lead to the removal of senior officials in the FBI and the Department of Justice and the end of Robert Mueller’s special counsel investigation. “These sources say the report is “explosive,” stating they would not be surprised if it leads to the end of Robert Mueller’s Special Counsel investigation into President Trump and his associates.” -Sara Carter. A source close to the matter tells Fox News that “the memo details the Intelligence Committee’s oversight work for the FBI and Justice, including the controversy over unmasking and FISA surveillance.”

An educated guess by anyone who’s been paying attention for the last year leads to the obvious conclusion that the report reveals extensive abuse of power and highly illegal collusion between the Obama administration, the FBI, the DOJ and the Clinton Campaign against Donald Trump and his team during and after the 2016 presidential election. Lawmakers who have seen the memo are calling for its immediate release, while the phrases “explosive,” “shocking,” “troubling,” and “alarming” have all been used in all sincerity. One congressman even likened the report’s details to KGB activity in Russia. “It is so alarming the American people have to see this,” Ohio Rep. Jim Jordan told Fox News. “It’s troubling. It is shocking,” North Carolina Rep. Mark Meadows said. “Part of me wishes that I didn’t read it because I don’t want to believe that those kinds of things could be happening in this country that I call home and love so much.”

“Rep. Peter King, R-N.Y., offered the motion on Thursday to make the Republican majority-authored report available to the members. “The document shows a troubling course of conduct and we need to make the document available, so the public can see it,” said a senior government official, who spoke on condition of anonymity due to the sensitivity of the document. “Once the public sees it, we can hold the people involved accountable in a number of ways.” The government official said that after reading the document “some of these people should no longer be in the government.” -Sara Carter

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And there’s no guarantee this won’t continue.

Hackers Have Walked Off With About 14% of Big Digital Currencies (BBG)

Digital currencies and the software developed to track them have become attractive targets for cybercriminals while also creating a lucrative new market for computer-security firms. In less than a decade, hackers have stolen $1.2 billion worth of Bitcoin and rival currency Ether, according to Lex Sokolin at Autonomous Research. Given the currencies’ explosive surge at the end of 2017, the cost in today’s money is much higher. “It looks like crypto hacking is a $200 million annual revenue industry,” Sokolin said. Hackers have compromised more than 14% of the Bitcoin and Ether supply, he said. All told, hacks involving cryptocurrencies like Bitcoin have cost companies and governments $11.3 billion through lost potential tax revenue from coin sales and illegitimate transactions, according to Susan Eustis, CEO of WinterGreen Research.

The blockchain ecosystem – the decentralized “distributed ledgers” that track crypto transactions – is also vulnerable. Those losses could snowball as more companies and investors rush into the white-hot cryptocurrency market without weighing the dangers or taking steps to protect themselves. Blockchain records are shared, making them hard to alter, so some users see them as super-secure. But in many ways they are no safer than any other software, Matt Suiche, who runs the blockchain security company Comae Technologies, said. And since the market is immature, blockchains may even be more vulnerable than other software. There are thousands of them, each with its own bugs. Until the field is winnowed to a few favorites, as happened with web browsers, securing them all will be a challenge. “Each implementation is going to have its own problems,” Suiche said. “The more implementations, the harder it is to cover all of them.”

[..] In a Dec. 25 paper, researchers at the Institute of Electrical and Electronics Engineers outlined ways hackers can spend the same Bitcoins twice, the very thing blockchains are meant to prevent. In a Balance Attack, for instance, hackers delay network communications between subgroups of miners, whose computers verify blockchain transactions, to allow for double spending. “We have no evidence that such attacks have already been performed on Bitcoin,” the IEEE researchers said. “However, we believe that some of the important characteristics of Bitcoin make these attacks practical and potentially highly disruptive.”

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Predictable. Securitizing hasn’t exactly benefitted Jill and John, has it?

Blockchain Eyed for Mortgage Bundling That Caused 2008 Crisis (BBG)

A group of big financial institutions wants to use the blockchain to help resurrect the packaging of home mortgages into securities, a business that almost destroyed the global banking system in 2008. Credit Suisse, U.S. Bancorp, Wells and Western Asset Management. said Thursday that they successfully tested the distributed ledger technology as a way to make it easier to track securitized home loans. Before the 2008 crisis, bundling home loans together and then selling those baskets to investors was a huge profit center for banks. But this was the primary cause of the meltdown after many borrowers couldn’t repay their debt and the value of the securitized loans crashed, causing trillions of dollars in losses.

The business then shrank dramatically. There were about $823 billion of securitized private-label residential mortgage bonds outstanding in early 2017, according to the Securities Industry and Financial Markets Association, down from a peak of $2.7 trillion in 2007. “Structuring securities is complex, involving many different parties, manual processes, duplicated documents and data in different formats,” David Rutter, chief executive officer of blockchain startup R3, which is organizing the consortium, said in a statement Thursday. While the group is starting with residential mortgages that aren’t backed by the U.S. government, it plans to expand to other types of asset-backed securities. The next step is delivering a commercially viable product, R3 said.

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Any regulation will need to concern all crypto, not just bitcoin. Does the SEC have the knowledge to do that?

SEC Says Bitcoin Funds Raise ‘Investor Protection Issues’ (R.)

The U.S. securities regulator on Thursday raised alarm about the safety of bitcoin-themed investments, telling the fund industry they want answers to their concerns before endorsing more than a dozen proposed products based on cryptocurrencies. A top division chief at the U.S. Securities and Exchange Commission detailed the agency’s concerns about the wild-trading investment in a letter to two trade groups representing fund managers who unleashed a range of proposals for funds holding bitcoin or related assets. The SEC’s division of investment management demanded answers to at least 31 detailed questions about how mutual funds or exchange-traded funds based on bitcoin would store, safeguard, and price that asset. They also asked whether investors can understand the risks and how to address concerns that bitcoin markets could be manipulated.

“There are a number of significant investor protection issues that need to be examined before sponsors begin offering these funds to investors,” said the letter signed by Dalia Blass, the SEC’s director of investment management. Bitcoin’s 1,500% surge last year stoked investor demand for any product with exposure to the red-hot asset. A host of companies are jostling to launch exchange-traded funds which would open up the cryptocurrency to a broad retail market. The SEC in March denied a request to list an ETF from investors Cameron and Tyler Winklevoss, owners of the Gemini bitcoin exchange. The Winklevoss fund is seeking to invest in bitcoin directly. Other fund firms staked their hopes on recently launched U.S.-listed bitcoin futures contracts, which promised a more stable base for ETFs than the largely unregulated virtual currency spot market. Many of those proposals were withdrawn last week at the request of the SEC.

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Haven’t watched it yet.

Oliver Stone’s “Ukraine On Fire” Documentary Released In The West (Quinn)

Oliver Stone’s seminal documentary Ukraine on Fire has finally been made available to watch in the West. Investigative journalist Robert Parry reveals how US-funded political NGOs and media companies have emerged since the 1980s, replacing the CIA in promoting America’s geopolitical agenda abroad. As Russia-Insider details, Ukraine on Fire provides a historical perspective for the deep divisions in the region which led to the 2004 Orange Revolution, the 2014 uprisings, and the violent overthrow of democratically-elected Yanukovych. Covered by Western media as a ‘popular revolution’, it was in fact a coup d’état scripted and staged by ultra-nationalist groups and the US State Department.

Executive producer Oliver Stone gained unprecedented access to the inside story through his on-camera interviews with former President Viktor Yanukovych and Minister of Internal Affairs Vitaliy Zakharchenko, who explain how the US Ambassador and factions in Washington actively plotted for regime change. And, in his first meeting with Russian President Vladimir Putin, Stone solicits Putin’s take on the significance of Crimea, NATO and the US’s history of interference in elections and regime change in the region. The film was originally released in 2016, but unsurprisingly, Stone came up against problems distributing the film in the US and western countries. A Russian-dubbed version was available almost immediately and was aired on TV in Russia, but people in the ‘free world’ were left without access to the full film.

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Seems quite obvious. If you can train dogs to discover cancer early on, why not DNA?

Blood Test Could Use DNA To Spot Early-Stage Cancers (G.)

Scientists have made a major advance towards developing a blood test for cancer that could identify tumours long before a person becomes aware of symptoms. The new test, which is sensitive to both mutated DNA that floats freely in the blood and cancer-related proteins, gave a positive result approximately 70% of the time across eight of the most common cancers when tested in more than 1,000 patients. In the future, such a test could be used in routine screening programmes to significantly increase the proportion of patients who get treatment early, at a time before cancer would typically show up on conventional scans. “The use of a combination of selected biomarkers for early detection has the potential to change the way we screen for cancer, and it is based on the same rationale for using combinations of drugs to treat cancers,” said Nickolas Papadopoulos, professor of oncology at Johns Hopkins University and senior author on the paper.

The test could also identify the form of cancer that a patient had, a goal that previous cancer blood tests have failed to achieve. It works by detecting free-floating mutated DNA, released into the bloodstream by dying cancer cells. The test screened for the presence of errors in 16 genes that are frequently mutated in different kinds of cancer. The blood of patients was also tested for eight known protein biomarkers which are seen to differing degrees depending on where in the body a tumour is located. In blood samples from 1,005 patients, the test detected between 33% and 98% of cases of disease. Ovarian cancer was the easiest to detect, followed by liver, stomach, pancreas, oesophageal, colorectal, lung and breast cancers. For the five cancers that currently have no screening tests – ovarian, liver, stomach, pancreatic and oesophageal cancers – sensitivity ranged from 69% to 98%.

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They’re all still living with mom and dad anyway.

Adolescence Now Lasts From 10 to 24 (BBC)

Adolescence now lasts from the ages of 10 to 24, although it used to be thought to end at 19, scientists say. Young people continuing their education for longer, as well as delayed marriage and parenthood, has pushed back popular perceptions of when adulthood begins. And changing the definition is vital to ensure laws and government policy stay appropriate, they say in the Lancet Child & Adolescent Health journal. But another expert warns doing so risks “further infantilising young people”. Puberty is considered to start when the part of the brain known as the hypothalamus starts releasing a hormone that activates the body’s pituitary and gonadal glands. This used to happen around the age of 14 but has dropped with improved health and nutrition in much of the developed world to around the age of 10.

As a consequence, in industrialised countries such as the UK the average age for a girl’s first menstruation has dropped by four years in the past 150 years. Half of all females now have their period by 12 or 13 years of age. There are also biological arguments for why the definition of adolescence should be extended, including that the body continues to develop. For example, the brain continues to mature beyond the age of 20, working faster and more efficiently. And many people’s wisdom teeth don’t come through until the age of 25. Young people are also getting married and having children later. According to the Office of National Statistics, the average age for a man to enter their first marriage in 2013 was 32.5 years and 30.6 years for women across England and Wales. This represented an increase of almost eight years since 1973.

Lead author Prof Susan Sawyer, director of the centre for adolescent health at the Royal Children’s Hospital in Melbourne, writes: “Although many adult legal privileges start at age 18 years, the adoption of adult roles and responsibilities generally occurs later.” She says delayed partnering, parenting and economic independence means the “semi-dependency” that characterises adolescence has expanded.

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The 3.5% surplus is the opposite of what’s good for Greece; there should be a 3.5% deficit, with all 7% of it invested in the economy.

Varoufakis Reveals Outburst Against ‘Stupid’ Tsipras (GR)

Former Greek Finance Minister Yanis Varoufakis has revealed he accused Prime Minister Alexis Tsipras of being “totally stupid” in accepting a demand by Greece’s creditors for big primary surpluses. During an interview with Greece’s Parapolitika radio, Varoufakis said when he learned that Tsipras in 2015 accepted, without consulting him, a primary surplus target of 3.5% he confronted the premier: “I told him: ‘Are you totally stupid? What have they given you in return?’ And he replied: ‘Oh, maybe I was stupid. I will retract from the promise’.” Varoufakis said he actually used a stronger word than “stupid”.

In the same interview, the former finance minister repeated claims that Tsipras did not really want to win in the infamous July 2015 referendum on the bailout. Varoufakis said he remembered that everyone at the prime minister’s office that evening was sad. “I do not know when exactly Tsipras decided to capitulate,” he added. Referring to his successor, Euclid Tsakalotos, he said: “I can no longer recognize him.” “Euclid became a yes man on July 6 [2015] .. The case of Euclid hurts, because I was an eyewitness of his total transformation,” he added. Varoufakis also confirmed that he still has in his possession recordings of the Eurogroup meetings of the turbulent first half of 2015.

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And also, the 3.5% surplus is a perfect way to make Greece a debt slave forever.

Greece Compliance Report Due Friday Ahead of Monday’s Eurogroup (R.)

Eurozone finance ministers could decide on Monday, or soon afterward, to release the next tranche of bailout loans to Greece after the country pushed through a batch of laws to meet reform agreements with its creditors, a senior European Union official has said. Finance ministers from the 19 countries sharing the euro meet for monthly talks on Monday and a review of Greek reforms is one of the top items on the agenda. Last Monday, the Greek Parliament approved a bill for fiscal, energy and labor reforms requested by international lenders. This is likely to complete the third and penultimate review of Greek reforms, unlocking new loans. “We are extremely well on our way towards the completion of the third review,” the senior EU official said.

“There are a number of administrative measures to be taken still. As of yet we cannot say that all the preconditions [for disbursements] have been successfully completed simply because the time lines are as they are,” the official said. Lenders’ experts, who are now translating and checking the Greek laws, are to issue a report on their compliance with the bailout’s requirements on Friday. The new loans would be between 6 and 7 billion euros, disbursed to Greece in more than one tranche, the official said. Greece would use the money to redeem maturing debt, pay arrears and create a cash buffer for when it leaves its third bailout in August. “We can be confident that the disbursements will… start in February, probably in the second half,” the official said.

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It’s not about people, it’s about money and politics. Welcome to the real Europe.

UK and France Must Stop ‘Systematic Violation’ Of Calais Refugees (Ind.)

The UK and France must urgently put an end to the “systematic violation” of refugees in Calais, a group of charities has warned. In a letter shared exclusively with The Independent, eight aid organisations urged leaders Theresa May and Emmanuel Macron to uphold their commitment to human rights law, as conditions for the thousands living on the border become increasingly perilous. The group, which includes l’Auberge des Migrants, Help Refugees, Safe Passage and Utopia56, wrote to the leaders on the same day Ms May welcomed the French President to the UK-France Summit at the Royal Military Academy in Sandhurst. “We are writing to ask that any new agreement relating to the French-British border bear in mind the human rights of displaced people currently residing in Calais,” the letter states.

“We are deeply concerned that the human rights of refugees and displaced people in northern France are being systematically violated on French territory. We moreover lament the heightened risk of sexual violence, exploitation and trafficking to which children and youth in Calais are exposed, as well as the many avoidable deaths occurring at the border.” Ahead of the visit, the Prime Minister announced the UK will take more child refugees from Calais and spend £44.5m on additional security at the French port. Ms May and Mr Macron subsequently signed a deal on migrants called the Sandhurst Treaty, designed to ease the suffering of some of the thousands of people camped near the French port who currently wait six months to have their cases settled. However, No 10 was keen to play down suggestions that Ms May had agreed to accept more refugees, insisting it would simply speed up the process of settling claims.

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And Germany now blames the island mayors.

HRW Blames Greek Authorities For Abysmal Conditions At Hotspots (K.)

In its annual review for 2018, Human Rights Watch (HRW) said the failure of Greek authorities to properly identify vulnerable asylum seekers for transfer to the mainland has “impeded their access to proper care and services.” The watchdog group also said that policy formed under the deal between the European Union and Turkey to stem the flow of migrants to the continent has led to thousands being “trapped in Greece in overcrowded and abysmal conditions, while denying most access to adequate asylum procedures or refugee protection.” “The policies, conditions, uncertainty and the slow pace of decision-making contributed to deteriorating mental health for some asylum seekers and other migrants on the islands, while creating tensions that sometimes erupted into violence,” it said.

More than 50,000 refugees and migrants are stranded in Greece. Meanwhile, five eastern Aegean island mayors are calling for a meeting with the German ambassador in Athens after coming under fire from German Interior Minister Thomas de Maiziere, who said on Wednesday that they were to blame for the appalling living conditions of refugees and migrants trapped in the hotspots. De Maiziere accused the island mayors of not making use of the aid that is being offered in order to force the government to transfer them to the Greek mainland.

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Dec 072017
 


MC Escher Convex and concave 1955

 

Note: no Debt Rattle tomorrow due to travel

 

The Great Credit Party Is Almost Over, Societe Generale Says (BBG)
Mother of All Bubbles Too Big to Pop – Peter Schiff (USAW)
One Day Soon, The Sun Will Not Rise (Econimica)
China’s Financial System Has Three Important ‘Tensions’ – IMF (CNBC)
Bitcoin Mining Service NiceHash Says Hackers Emptied Its Wallet (BBG)
Trump: Government Shutdown ‘Could Happen’ Saturday (CNBC)
Trump Calls On Saudi Arabia To End Yemen Blockade Immediately (Ind.)
Why the Deep State Is at War With Trump (Stockman)
How Corporate Power Killed Democracy (CP)
EU Regulators Threaten Court Challenge To EU-US Data Transfer Pact (R.)
Greek Stability Attracts US Investors Amid Turkey, Middle East Tumult (CNBC)
Greek Islands Boiling Over As Winter Arrives (K.)
Scientists Warn Of 93% Chance Global Warming Will Exceed 4°C (Ind.)

 

 

“Emerging market and high-yield markets are the most alarming.”

The Great Credit Party Is Almost Over, Societe Generale Says (BBG)

The great credit party that’s taken yield premiums in major markets down around lowest in a decade is probably months away from an end, as central banks normalize monetary policy and the economic outlook softens, Societe Generale predicts. “We expect next year to be a transition year, when the ultra-low yield environment finally starts to lose its grip,” Societe Generale credit strategists Juan Esteban Valencia and Guy Stear wrote in a note. “The U.S. and the eurozone are heading for an economic slowdown in 2019, and given the rising levels of corporate leverage, this should have an impact on credit.” U.S. investment-grade bond premiums will widen by mid-2018, with European counterparts following suit, as credit markets price in the economic slowdown, they wrote.

“The sword falls in 2H,” they predicted in a report that recognized last year’s annual outlook proved too bearish. Societe Generale had anticipated political risk to hurt credit in 2017, but changed tack by March as that didn’t pan out. Now, with global premiums having fallen further, “credit looks very pricey indeed,” they wrote. “Emerging market and high-yield markets are the most alarming.”

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Schiff is right, except he keeps being focused on the dollar alone. It’s an American thing.

Mother of All Bubbles Too Big to Pop – Peter Schiff (USAW)

Money manager Peter Schiff correctly predicted the financial meltdown in 2008. Now, 10 years later, what does Schiff see today? Schiff says, “I predicted a lot more than just the stock market going down back then. I predicted the financial crisis, but more importantly, I predicted what the government would do as a result of the financial crisis and what the consequences of that would be because that’s where we’re headed. The real crash I wrote about in my most recent book is still coming. . . . This is the third gigantic bubble that the Fed has inflated, and when this one pops, it’s not going to be ‘the third time is a charm.’ It’s going to be ‘three strikes and you’re out.’ I think this bubble is too big to pop. I think it’s the mother of all bubbles, and when it bursts, there is not a bigger one that the Fed is going to be able to inflate to mask these problems, meaning we can’t kick the can down the road anymore.”

This time, the crisis is going to hit everyone in the wallet. Schiff goes on to say, “I think the problem we are going to be confronted with is going to be much worse than a financial crisis. It is going to be a dollar crisis, and it is going to be a sovereign debt crisis where the bonds people are worried about are not some sub-prime mortgages. . . . It’s going to be the U.S. government that people are worried about and the solvency of the U.S. government and the Treasury bonds. If it’s a dollar crisis and people are worried about the dollar, the only thing worse than owning a dollar today is owning the promise of being paid in dollars in the future. I don’t think we have the courage to default and admit to our creditors that we don’t have the money and we can’t repay. I think we will create all the money that we need so we can pretend to repay, but what we end up doing is wiping out the debt with inflation.”

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Many more graphs in this from Chris Hamilton. US population growth? It was all immigration: “.. the US fertility rate has been negative for 45 years..”

One Day Soon, The Sun Will Not Rise (Econimica)

When the Q4 US resident population data is released, something that has not happened in the post WWII era will take place. The population of adults aged 15-64 years old will decline. This was not supposed to happen and will put an end to seven plus decades of continuous population growth which has meant a growing workforce, a growing consumer base, and growing tax base. A growing core US population, something considered as sacrosanct as the sun rising, will not happen. On a year over year basis, where there once were up to 3 million more homebuyers than the previous year, 3 million more car buyers than the year before, 3 million more potential customers…there will be likely be thousands fewer.

Many will assume this is a demographic issue of boomers exiting the working age population… but actually demographics is simply the early onset of a disease that will only progressively worsen. This is truly a population growth issue, not simply a demographic distribution problem. The economic system the US and world have adopted are dependent on perpetual growth on a quarter over quarter and year over year basis. Two negative quarters (or even zero growth) and a recession is called and all the Federal Reserve’s and federal governments tools are employed. Given the importance of growth, the most important factor in growing the economy is the rising demand represented by a growing population. But the US fertility rate has been negative for 45 years (chart below) meaning the native population (plus immigrants) have continually failed to replace themselves.

This means US population growth has simply been a story of immigration. And until 2000, N. America was the primary destination for the majority of the world’s immigrants. However, since ’00 and particularly since ’05, the migration patterns have significantly changed.

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The soft approach.

China’s Financial System Has Three Important ‘Tensions’ – IMF (CNBC)

An almost two-year long study of the Chinese financial system by the International Monetary Fund found three major tensions that could derail the world’s second-largest economy. Those tensions emerged as China moves away from its role as the world’s factory to a more modern, consumer-driven economy, the IMF said. The financial sector is critical in facilitating that transition, but in the process it evolved into a more complicated and debt-laden system. “The system’s increasing complexity has sown financial stability risks,” the fund said in the 2017 China Financial Sector Stability Assessment report released on Thursday morning Asia hours. The report was a culmination of the fund’s several visits to China between October 2015 and September 2017.

The assessment is intended to identify key sources of systemic risk in the financial sector so that policies can be implemented to enhance resilience to shocks and problems that could spread across the globe. The first tension in China’s financial system, according to the IMF, is the rapid build-up in risky credit that was partly due to the strong political pressures banks face to keep non-viable companies open, rather than letting them fail. Such struggling firms have, in recent years, taken on more debt to achieve growth targets set by the authorities. The overall debt-to-GDP ratio in the Asian economic giant grew from around 180% in 2011 to 255.9% by the second quarter of 2017, data by the Bank for International Settlements showed. The rise coincided with a slowdown in productivity growth and pressures on asset quality in the banking system – increasing the risks faced by the Chinese economy.

The second tension identified by the IMF is that risky lending has moved away from banks to the less-regulated parts of the financial system, commonly known as the “shadow banking” sector. That adds to the complexity of the financial sector and makes it more difficult for authorities to supervise activities in the system, the IMF said. And the third issue identified by the international organization is that there’s been a rash of “moral hazard and excessive risk-taking” because of the mindset that the government will bail out troubled state-owned enterprises and local government financing vehicles. An example is the “implicit guarantees” that financial institutions offer when selling products to retail investors. That is a situation where the financial product sold are not guaranteed, but banks almost always compensate investors for principal losses by dipping into their own capital.

The People’s Bank of China, in response to the IMF assessment, said in a statement on its website that it disagrees with some points in the report but the fund’s recommendations are “highly relevant in the context of deepening financial reforms” in the country. One of the points the Chinese central bank said it disagrees with is the conclusion that many banks lack the ability to withstand shocks. The IMF’s stress tests found that 27 out of 33 banks studied were under-capitalized. But the PBOC said the Chinese financial system is resilient.

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NiceHash is the largest bitcoin-mining exchange. Well, its coins have been found. But what now?

“a highly professional attack with sophisticated social engineering”

Bitcoin Mining Service NiceHash Says Hackers Emptied Its Wallet (BBG)

NiceHash, the marketplace for cloud-based mining of cryptocurrencies, said hackers breached its systems and stole an unknown amount of bitcoin from its virtual wallet. “We are working to verify the precise number of BTC taken,” the company said Wednesday in a statement on its Facebook page. It’s halting operations for 24 hours, it said. The venture’s main webpage showed a “maintenance” error message, linking to its social media accounts. NiceHash helps match people who can spare computing capacity with miners looking to solve complex math problems to obtain a variety of new coins. It later facilitates periodic payments to the service providers with bitcoin. A wallet address circulated by NiceHash users shows that more than $60 million of bitcoins might be affected, according to CoinDesk, the cryptocurrency research and news website.

Read more …

Seems a bit early, but echo chambers are deafening.

Trump: Government Shutdown ‘Could Happen’ Saturday (CNBC)

President Donald Trump on Wednesday said that a government shutdown “could happen” as soon as Saturday. “It could happen,” Trump said during a Cabinet meeting at the White House, in response to a reporter’s question about the Friday deadline for a spending bill to fund the government. “The Democrats are really looking at something that could be very dangerous for our country,” Trump said. “They are looking at shutting down. They want to have illegal immigrants, in many cases people that we don’t want in our country, they want to have illegal immigrants pouring into our country, bringing with them crime, tremendous amounts of crime.” Congress has until midnight on Friday to approve a short-term spending package to keep the government open. Despite majorities in both chambers, Republicans will need Democratic votes to pass the bill.

House Minority Leader Nancy Pelosi, D-Calif., responded on Twitter to Trump’s comments saying: “President Trump is the only person talking about a government shutdown. Democrats are hopeful the President will be open to an agreement to address the urgent needs of the American people and keep government open.” What congressional Democrats want in exchange for supporting the spending bill are permanent protections for the nearly 800,000 young, undocumented immigrants currently living in the United States who were brought here as children, the so-called Dreamers. Earlier this year, Trump canceled an Obama-era protection policy for Dreamers, the Deferred Action for Childhood Arrivals program, or DACA. The president’s order gave Congress until March 2018 to pass a bill with DACA-like protections.

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To balance out the Jerusalem decision? Jerusalem should be a religious city, not a political one.

Trump Calls On Saudi Arabia To End Yemen Blockade Immediately (Ind.)

US President Donald Trump has called on Saudi Arabia to end its Yemen blockade immediately, citing humanitarian concerns. Mr Trump said in a statement that he has directed US officials to call Saudi Arabian leaders and request they “completely allow food, fuel, water and medicine to reach the Yemeni people.” He said Yemenis “desperately need it.” A Saudi-led coalition has been fighting to defeat the Iran-backed Houthis and Yemeni President Ali Abdullah Saleh’s forces in Yemen since March 2015 with the aim of reinstating the internationally recognized government of Mr Saleh’s successor, Abed Rabbo Mansour Hadi. The US has been supporting the coalition through weapons sales, some intelligence sharing, and refuelling capabilities for air operations.

Since the conflict began, at least 10,000 people have died as a result and 40,000 have been wounded, Al Jazeera reported. Mr Saleh was killed earlier this week after moving to switch allegiances in the bloody conflict, making the situation in the country unpredictable according to experts. [..] The Saudi-led coalition had imposed a blockade on the country last month after Houthi rebels fired a missile on the Saudi capital of Riyadh. It responded by sending a slew of missiles into Yemen’s capital Sanaa. The blockade was partially lifted at the Hudaya port of the international airport in Sanaa and the first aid shipments were allowed to enter the country just last week. In the meantime, aid groups were forced to buy their own fuel in order to assist with relief work.

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Stockma’s not the lonly one pointing out that the NSA already knows everything. They don’t have to interview Flynn for that.

Why the Deep State Is at War With Trump (Stockman)

If you were a Martian visitor just disembarked from of one of Elon Musk’s rocket ships and were therefore uninfected by earth-based fake news, the culprits in Washington’s witch-hunt de jure would be damn obvious. They include John Brennan, Jim Comey, Sally Yates, Peter Strzok and a passel of deep state operatives – all of whom baldly abused their offices. After Brennan had concocted the whole Russian election meddling meme to sully the Donald’s shocking election win, the latter three holdovers – functioning as a political fifth column in the new Administration – set a perjury trap designed to snare Mike Flynn as a first step in relitigating and reversing the voters’ verdict. The smoking gun on their guilt is so flamingly obvious that the ability of the Trump-hating media to ignore it is itself a wonder to behold.

After all, anyone fresh off Elon’s rocket ship would learn upon even cursory investigation of the matter that the National Security Agency (NSA) intercepts electronically every single communication of the Russian Ambassador with any person on US soil – whether by email, text or phone call. So the clear-minded visitor’s simple question would be: What do the transcripts say? In fact, a Martian visitor would also quickly understand that the entire world – friend, rival, foe and enemy, alike – already knows of NSA’s giant digital spying operation owing to Snowden’s leaks, and that therefore there are no “sources and methods” on the SIGINT (signals intelligence) front to protect. Accordingly, the disinterested Martian would undoubtedly insist: Declassify the NSA intercepts and publish them on Facebook (and, for old timers, on the front page of the New York Times) so that the truth would be known to all.

Of course, that would punch a deep hole in the entire RussiaGate witchhunt because NSA, in fact, did record Flynn’s late December conversations with Russian Ambassador Kislyak. And there was not a single word in them that related to alleged campaign collusion or otherwise inappropriate communications by the in-coming national security adviser to a newly-elected President who was three-weeks from inauguration. Indeed, as explained below, Mueller has effectively told us that Flynn’s communications with Kislyak were clean as a whistle.

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Corporatism. Another name for Mussolini’s version of fascism.

How Corporate Power Killed Democracy (CP)

The rise of Corporate Power was the fall of democracy. Over the long haul, US politics has revolved around a deep tension between democracy and an unrelenting drive for plunder, power and empire. Granted that our democracy has been seriously flawed and only rarely revolutionary, yet the democratic movements are the source of every good thing America has ever stood for. Since the mid-1970s, when the corporations fused with the state, a new imperial order emerged that killed what remained of representative democracy. Not only would corporations exercise public authority as only government once had, but government would coordinate and serve corporate activity. Power and profits became one and the same. Corporate power has replaced democracy with oligarchy and justice with a vast militarized penal system.

Instead of innovative production, they plunder people and planet. To achieve this new order, elections and the economy had to be drained of any remaining democratic content. Both Democrats and Republicans were eager to have at it. By the 1990s “Third Way” Democrats like Bill Clinton abandoned what was left of the New Deal to try to outdo the Republicans as the party of Wall Street. The Republicans pioneered election fraud on a national scale in 2000, 2004, and 2016; a lesson the Democrats learned all too well by the 2016 Primary. Neither major party wants election reform since free and fair elections would threaten the system itself. So-called private corporations like Facebook, Google and Twitter control information and manage the 1st Amendment.

The corporate media now broadcast propaganda and play the role of censor once monopolized by the FBI and CIA. The migration of propaganda work to civilian organizations began under Ronald Reagan. While both major parties offer the people nothing beyond austerity and the worst kind of identity politics, the big banks like Goldman Sachs gained positions of real influence with both Republican and Democratic administrations and always with the Department of the Treasury and the Federal Reserve. Without pubic money and political protection the banking system — the headquarters of the mythical free market — could not function.

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Yes, this has everything to do with Google, Facebook et al (not just government spies). It involves some $260 billion in digital trade.

EU Regulators Threaten Court Challenge To EU-US Data Transfer Pact (R.)

European Union privacy regulators have threatened to bring a legal challenge to a year-old EU-U.S. pact on the cross-border transfer of personal data if their concerns about its functioning and U.S. surveillance practices are not resolved by the autumn of 2018, they said in a report. The EU-U.S. Privacy Shield pact was agreed last year after the European Union’s highest court had struck down the previous Safe Harbour Principles agreement which allowed companies to transfer European citizens’ personal data to the United States, due to concerns about intrusive U.S. surveillance of online data. The Privacy Shield pact enables companies to easily conduct everyday cross-border data transfers in compliance with EU data protection rules.

“The WP29 (Article 29 Working Party) has identified a number of significant concerns that need to be addressed by both the (European) Commission and the U.S. authorities,” the regulators – known as the Article 29 Working Party – said in their report. The European Commission, which negotiated the Privacy Shield deal, conducted its first annual review in September and said it was satisfied with the way it was working. It did however ask Washington to improve it, including by strengthening the privacy protections contained in a controversial portion of the U.S. Foreign Intelligence Surveillance Act (FISA), known as Section 702. Section 702 allows the U.S. National Security Agency to collect digital communications from foreign suspects living outside the United States. It is due to expire on Dec. 31 in the absence of congressional action.

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It won’t remain stable. Or rather, it never was: poevry is making more victims every day.

Greek Stability Attracts US Investors Amid Turkey, Middle East Tumult (CNBC)

A series of positive factors for the Greek economy are attracting U.S. investors back to the embattled euro zone nation, a government minister told CNBC. “There are many American investors who are interested in participating in projects in Greece, because every clever investor would be interested in an economy that now starts to have positive growth rates,” Dimitris Tzanakopoulo, Greek minister of state and the government spokesperson, told CNBC Monday. Following a meeting between President Donald Trump and Greek Prime Minister Alexis Tsipras in October, there’s a renewed interest from the U.S. in shoring up its investments in Greece, especially in the energy sector.

Aside from a bounce back in economic growth, Tzanakopoulo said that Greece was “a pillar of stability in a region” and is winning back investors. “(The region) has many, many problems, wherever you look there’s destabilization, there is turbulence,” Tzanakopoulo said in his office in Athens. “We think we are one of the factors which will secure and guarantee stability in the region and this is something everybody knows, from the U.S. to our European partners,” he said. At the crossroads of Europe, Asia, and Africa, Greece is a key ally for many Western countries in the face of escalating tumult in Turkey and the rest of the Middle East.

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Apparently Berlin has not given permission to move refugees to the mainland. Shame on you, mutti Merkel.

Greek Islands Boiling Over As Winter Arrives (K.)

The decision by the Migration Policy Ministry to expand and upgrade hot spots on Chios and Lesvos have cultivated a tense atmosphere, as critics say it will do nothing to ease pressure on the eastern Aegean islands and or to alleviate the situation of thousands of stranded refugees and migrants crammed in camps designed to hold far less people. Moreover, the onset of winter has made a bad situation even worse and the calls for authorities to accelerate asylum applications so as to transfer people to the mainland have become even louder. In the bid to deal with the deteriorating conditions, a team from Medecins Sans Frontiers (MSF) has, since last week, set up operations outside the Moria camp in Lesvos, offering assistance to those in need in cooperation with the Hellenic Center for Disease Control and Prevention (KEELPNO).

In a Facebook post, MSF said the harsh conditions and the cold are posing a serious threat to the health of the some 7,000 people that remain at the Moria hot spot. The group, which has called for the immediate transfer of those living at Moria to the mainland, has set up a mobile unit outside the camp to help children under the age of 16 and pregnant women. MSF is also distributing blankets, mattresses and other basic necessities as the situation, it said, is on the brink of a humanitarian crisis. At the same time, the Migration Policy Ministry is planning to transfer another 65 prefabricated huts to Moria in a bid to increase the camp’s capacity and to improve the living conditions of those that are still staying in summer tents. But the move is set to trigger more acrimony, as islanders and local authorities have said they do not agree with the expansion of the hot spot’s capacity.

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That would mean much higher sea levels.

Scientists Warn Of 93% Chance Global Warming Will Exceed 4°C (Ind.)

Current predictions of climate change may significantly underestimate the speed and severity of global warming, according to a new study. Reappraisal of the models climate scientists use to determine future warming has revealed that less optimistic estimates are more realistic. The results suggest that the Paris Climate Agreement, which aims to keep global average temperatures from rising by 2C, may be overly ambitious. “Our study indicates that if emissions follow a commonly used business-as-usual scenario, there is a 93% chance that global warming will exceed 4C by the end of this century,” said Dr Ken Caldeira, an atmospheric scientist at the Carnegie Institution for Science, who co-authored the new study. This likelihood is an increase on past estimates, which placed it at 62%.

Climate models are vital tools for scientists attempting to understand the impacts of greenhouse-gas emissions. They are constructed using fundamental knowledge of physics and the world’s climate. But the climate system is incredibly complex, and as a result there is disagreement about how best to model key aspects of it. This means scientists have produced dozens of climate models predicting a range of different global warming outcomes resulting from greenhouse-gas emissions. Based on a “business-as-usual” scenario in which emissions continue at the same rate, climate models range in their predictions from a 3.2C increase in global temperatures to a 5.9C increase The new study, published in the journal Nature, sought to resolve this situation and establish whether the upper or lower estimates are more accurate.

To do this, Dr Caldeira and his collaborator Dr Patrick Brown reasoned that the most accurate models would be the ones that were best at simulating climate patterns in the recent past. “It makes sense that the models that do the best job at simulating today’s observations might be the models with the most reliable predictions,” said Dr Caldeira. Their conclusion was that models with higher estimates were more likely to be accurate, with the most likely degree of warming 0.5C higher than previous best estimates.

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If I knew for a certainty that a man was coming to my house with the conscious design of doing me good, I should run for my life.
—Thoreau

 

Jul 032017
 
 July 3, 2017  Posted by at 9:32 am Finance Tagged with: , , , , , , , , , ,  6 Responses »


Paul Klee Girl in Mourning 1939

 

Merkel Promises Full Employment In Party Platform (R.)
Theresa May Steps Back From Public Sector Pay Cap Amid Austerity Backlash (Ind.)
Donald Trump May Make ‘Sneak’ Visit To UK Within Fortnight (G.)
Maine, New Jersey Lawmakers Scramble To End Partial Government Shutdowns (R.)
Illinois House Approves Major Income Tax Hike (CTrib)
China Inc’s $7.8 Billion of Dividend Payments Will Stress the Yuan (BBG)
Japan PM Abe’s Party Suffers Historic Defeat In Tokyo Election (R.)
Abe’s Mentor Says BOJ Needs Fresh Face as Kuroda Is Out of Ideas (BBG)
Saudi Arabia, Allies Give Qatar Two More Days To Accept Demands (R.)
The Crash of 1929 (Jesse’s Café/PBS)
Italy Urges EU Ports To Take Migrants As Pressure Builds (AFP)
‘Our Future Is Slavery, The West Gets Everything’ – Congo (RT)

 

 

Note: tomorrow’s a travel day for me. Not sure about a Debt Rattle.

 

 

Plus tax relief. Plus support for young families to build new housing. Now compare that to Greece, where over half of young people are unemployed, and where taxes are being raised all the time and pensions cut. That, too, is a German decision. But Greeks don’t get to vote for or against Merkel.

Merkel Promises Full Employment In Party Platform (R.)

Chancellor Angela Merkel’s conservatives will promise to all but eliminate unemployment in Germany by the year 2025 when they announce their 2017 election campaign platform on Monday. Merkel’s Christian Democrats (CDU) and their Bavarian sister party, the Christian Social Union (CSU), will present their platform for the Sept. 24 election on Monday with other already known policies such as income tax cuts worth 15 billion euros per year and promises to build flats. “A major point is that we’d like to achieve full employment,” Horst Seehofer, CSU chairman and state premier in Bavaria, said on Sunday on his way into a meeting of the conservative leadership. The CDU/CSU consider full employment to be a jobless rate of less than 3% – compared to 5.5% now.

Those “Economic Miracle” levels of unemployment have not been seen in the country since the mid-1970s. The two parties also want to add 15,000 police officers in the 16 federal states. The sister parties, however, will not agree on a joint position on refugees. The CSU wants an upper limit of 200,000 per year, which Merkel and the CDU rejects. “We agree to disagree on that,” Interior Minister Thomas de Maiziere (CDU) said in a Bild am Sonntag newspaper interview, referring to the issue that split the two parties badly since some 1 million refugees arrived in late 2015. The CDU/CSU hold a 16%age point lead over the center-left Social Democrats in opinion polls with a 40-24 lead, but would still need a coalition partner. They rule with the SPD and in the past they have ruled with the Free Democrats (FDP).

[..] Earlier on Sunday, CDU Finance Minister Wolfgang Schaeuble said in a radio interview there could be room to cut taxes by more than the €15 billion already announced. Germany has had balanced budgets since 2014 and the government plans to have no new borrowing in its planning through 2021. Schaeuble told Deutschlandfunk radio he hoped there could be tax relief beyond that already promised €15 billion income tax cut. “We’re planning, all in all, to do more than just correcting the income taxes by €15 billion,” he said, referring to plans to reduce the country’s “cold progression” tax increases – or clandestine tax increases. [..] Schaeuble said aside from fighting “cold progression”, the Christian Democrats want to support young families to build new housing while also supporting research and development for small- to medium-sized companies.

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Messing it up as they go along.

Theresa May Steps Back From Public Sector Pay Cap Amid Austerity Backlash (Ind.)

Tory austerity appeared to be crumbling at the edges today, as Theresa May further distanced herself from a hated public sector pay freeze. Downing Street said the Government would consider potential wage increases for nurses, police officers and firefighters on a “case by case” basis after a string of top cabinet ministers signalled backing for an end to the blanket 1 per cent cap on all public servants. Environment Secretary Michael Gove said the Government should now listen to the recommendations of salary review bodies ignored by ministers for almost ten years. Education Secretary Justine Greening and Health Secretary Jeremy Hunt are also both reported to be pushing for new deals for teachers and nurses. The Independent reported last week how the Government faced a first ever strike from the Royal College of Nursing over a crisis in the profession.

There has also been mounting pressure from Jeremy Corbyn’s Labour – whose party fought a successful election campaign on an anti-austerity message. A Downing Street spokesman defended the Government’s record, but pointed to potential changes ahead. He said: “Dealing with the economic mess we inherited from Labour has meant hard work and sacrifice, including for public sector workers. That hard work and those tough decisions have helped get our deficit down by three quarters, and public sector pay restraint has helped us protect jobs. “Independent public sector pay review bodies are currently reporting to Government and we are responding to them on a case-by-case basis. While we understand the sacrifice that has been made, we must also ensure we continue to protect jobs and deal with our debts.”

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What is the Queen would be received like this?:

“MPs and trade unions vowed to hold the largest demonstrations in UK history if Donald Trump made a state visit to the UK..”

Donald Trump May Make ‘Sneak’ Visit To UK Within Fortnight (G.)

Anti-Donald Trump protesters are preparing to spring into action at short notice, after it emerged that Downing Street is braced for a snap visit from the US president in the next two weeks. A formal state visit, which was expected to take place over the summer, was postponed last month, amid fears that it could be disrupted by mass protests, despite Theresa May extending the invitation personally when she visited the White House late last year. But Whitehall sources confirmed the government has now been warned that the president could visit Turnberry, his golf resort in Scotland, during his trip to Europe, between attending the G20 summit in Hamburg next weekend and joining celebrations for Bastille Day in France on 14 July.

Trump would be expected to come to Downing Street to meet the prime minister for informal talks as part of any such visit – though final confirmation would be likely to be given with just 24 hours’ notice, to minimise the risk of disruption. May invited Trump to Britain seven days after his inauguration when she became the first foreign leader to visit him in the White House. In February activists, MPs and trade unions vowed to hold the largest demonstrations in UK history if Donald Trump made a state visit to the UK, forming The Stop Trump coalition, even hiring a permanent staff member. In early June, just after the UK general election, it emerged that the US president had told May that he did not want to go ahead with the state visit to Britain until the British public supports his coming, fearing large-scale demonstrations.

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How about you borrow some more, guys? Or, you know, come clean and tell people their pensions are shot.

Maine, New Jersey Lawmakers Scramble To End Partial Government Shutdowns (R.)

Partial government shutdowns in Maine and New Jersey entered a second day on Sunday as lawmakers returned to their respective state capitals in a bid to break budget impasses that have led to the suspension of many nonessential services. In Maine, a bipartisan legislative committee met in Augusta in hopes of breaking a stalemate between Republican Governor Paul LePage and Democratic lawmakers. The shutdown came after LePage threatened to veto a compromise reached by lawmakers in the state’s $7.055 billion, two-year budget. In New Jersey, the legislature was due to reconvene to resolve a political fight over a controversial bill that Governor Chris Christie said must be passed alongside the state’s budget.

After House Republicans in Maine voted to reject a compromise deal on Saturday, the Bangor Daily News reported that Republican Minority Leader Ken Fredette presented a $7.1 billion plan he said could get the governor’s approval, but some Democrats noted that was costlier than the rejected compromise. “The Speaker thinks it is unconscionable that Maine doesn’t have a budget, especially leading into the holiday weekend,” Mary-Erin Casale, a spokeswoman for Democratic House Speaker Sara Gideon, said Sunday morning. If the budget committee meeting on Sunday in Augusta agrees on a deal, the measure would go to the full legislature. LePage has insisted on a budget with deeper spending cuts than those contemplated by lawmakers and has promised to veto any spending plan that raises taxes.

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Sign of things to come.

Illinois House Approves Major Income Tax Hike (CTrib)

The Illinois House on Sunday approved a major income tax increase as more than a dozen Republicans broke ranks with Gov. Bruce Rauner amid the intense pressure of a budget impasse that’s entered its third year. The Republican governor immediately vowed to veto the measure, saying Democratic House Speaker Michael Madigan was “protecting the special interests and refusing to reform the status quo.” The measure, which needed 71 votes to pass and got 72, is designed to start digging the state out of a morass left by the lengthy stalemate. Madigan, in a statement, praised the action as “a crucial step toward reaching a compromise that ends the budget crisis by passing a fully funded state budget in a bipartisan way.”

The tax hike now heads to the Senate, but whether there will be enough votes to send it to Rauner’s desk is in question. When the Senate approved its own tax hike in late May, no Republicans voted for it and several Democrats voted against it. Senators return to the Capitol on Monday. The crucial vote in the House was the big story Sunday, though. Ultimately, pressure that had built up in districts across the state moved enough Republicans to defy the governor. With state government operating without a budget for two full years, public universities risk losing their accreditation, social service providers are closing their doors and layoffs of road construction workers are imminent.

Adding to lawmakers’ anxiety was a promised downgrade of the state’s credit rating to junk status, which could spike the cost of borrowing at a time when the state has $15 billion in unpaid bills. Left out of the House budget package was a plan for dealing with the unpaid bills, though both sides generally agree that some amount of borrowing will be needed. Rauner, a former private equity specialist from Winnetka, had spent tens of millions of dollars on legislative campaigns and TV ads to prop up the Illinois Republican Party as a counterweight to Madigan and his labor union allies. And Republican lawmakers largely had stuck by their governor — until Sunday. [..] The proposal mirrors a plan the Senate passed earlier this year and calls for raising the personal income tax rate from the current 3.75% to 4.95%, which would generate roughly $4.3 billion. An increase in the corporate income tax rate from 5.25% to 7% would bring in another $460 million.

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Bearish on the dollar? You sure?

China Inc’s $7.8 Billion of Dividend Payments Will Stress the Yuan (BBG)

The yuan’s rebound may be undermined by a seasonal hunt for dollars as Chinese companies prepare to pay dividends to shareholders overseas. Demand for the greenback and other currencies will peak at $7.8 billion in July, a substantial sum considering that local lenders settled an average of $11.8 billion in foreign-exchange for clients in the first five months of 2017. China’s currency reserves have shrunk every July in the last three years, with former regulator Guan Tao saying last week that demand for foreign-exchange surges in this period. China’s exchange rate has turned more volatile in the past two months, climbing the most in more than a year in May and then declining in June before suspected central bank intervention spurred a rally.

Goldman Sachs warned capital outflows have picked up, while recent data suggest the economy is showing signs of slowing as an official deleveraging drive crimps spending. “The need for dividend payouts will pressure the yuan and may pressure a recent increase in China’s foreign reserves,” said Xia Le at BBVA. “The yuan’s advance in the past few days is not sustainable – short-term factors such as dividend payments and long-term ones like capital outflows will work together to push the currency weaker in the coming months.” Offshore-listed Chinese firms need to pay a combined $16 billion of dividends in foreign exchange in the three months through August. That includes $2.4 billion in June and $5.9 billion for August.

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Abe will shuffle his cabinet to deflect attention from himself. But he’s in trouble.

Japan PM Abe’s Party Suffers Historic Defeat In Tokyo Election (R.)

Prime Minister Shinzo Abe’s Liberal Democratic Party suffered an historic defeat in an election in the Japanese capital on Sunday, signaling trouble ahead for the premier, who has suffered from slumping support because of a favoritism scandal. On the surface, the Tokyo Metropolitan assembly election was a referendum on Governor Yuriko Koike’s year in office, but the dismal showing for Abe’s party is also a stinging rebuke of his 4-1/2-year-old administration. Koike’s Tokyo Citizens First party and its allies took 79 seats in the 127-seat assembly. The LDP won a mere 23, its worst-ever results, compared with 57 before the election. “We must recognize this as an historic defeat,” former defense minister Shigeru Ishiba was quoted as saying by NHK.

“Rather than a victory for Tokyo Citizens First, this is a defeat for the LDP,” said Ishiba, who is widely seen as an Abe rival within the ruling party. Past Tokyo elections have been bellwethers for national trends. A 2009 Tokyo poll in which the LDP won just 38 seats was followed by its defeat in a general election that year, although this time no lower house poll need be held until late 2018. [..] “We must accept the results humbly,” said Hakubun Shimomura, a close Abe ally and head of the LDP’s Tokyo chapter. “The voters have handed down an extremely severe verdict.” Abe is expected to reshuffle his cabinet in coming months in an effort to repair his damaged ratings, a step often taken by beleaguered leaders but one that can backfire if novice ministers become embroiled in scandals or commit gaffes.

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If Kuroda’s out of ideas, that means Abenomics has failed. And that in turn means Abe should go too.

Abe’s Mentor Says BOJ Needs Fresh Face as Kuroda Is Out of Ideas (BBG)

Haruhiko Kuroda shouldn’t serve another term as governor of the Bank of Japan because the central bank will need fresh ideas as it moves toward exiting years of unprecedented monetary easing, according to an adviser to the prime minister. “An exit will surely come up within the next five years and we need someone who can prepare for it,” said Nobuyuki Nakahara, a former BOJ board member. “He will fall into inertia and struggle to come up with bold new ideas. It’s the same in the private sector when a corporate president stays too long,” he said. Nakahara’s comments come amid growing speculation among private economists that Prime Minister Shinzo Abe will reappoint Kuroda, 72, after his five-year term ends in April.

Nakahara, who was close to Abe’s father, Shintaro, has known the prime minister since he was young and has advised him for years. In an interview on June 29, Nakahara, one of the architects of Abenomics, said he didn’t have any replacements for Kuroda in mind. But he said change at the top of the BOJ would be good because the government and central bank should strike a new accord and form a new strategy for the next five years. The current accord, issued in January 2013, says the central bank should aim for price stability at an annual inflation rate of 2%, while the government is responsible for strengthening competitiveness and the nation’s growth potential. More than four years later, the inflation target remains far off.

[..] Kuroda’s propensity to surprise markets with innovative ideas has been waning, according to Nakahara. And the strains of his record easing are particularly evident in the bank’s purchases of exchange-traded funds, which are distorting the market, he said. “They can’t keep holding ETFs forever,” he said. Nakahara offered a possible solution. How about getting companies to buy back their own shares from the BOJ? Or the BOJ could tell companies it plans to sell the shares on the market. If the companies need funding for share buybacks, the central bank could help with a loan-support program. “That’s my secret strategy,” he said.

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Really, close Al Jazeera? What an awful signal that would be. Why not close CNN then?!

Saudi Arabia, Allies Give Qatar Two More Days To Accept Demands (R.)

Four Arab states that accuse Qatar of supporting terrorism agreed to extend until Tuesday a deadline for Doha to comply with a list of demands, as U.S. President Donald Trump voiced concerns about the dispute to both sides. Qatar has called the charges baseless and says the stiff demands – including closing Qatar-based al Jazeera TV and ejecting Turkish troops based there – are so draconian that they appear designed to be rejected. Saudi Arabia, Bahrain, Egypt and the United Arab Emirates (UAE) have raised the possibility of further sanctions against Qatar if it does not comply with the 13 demands presented to Doha through mediator Kuwait. They have not specified what further sanctions they could impose on Doha, but commercial bankers in the region believe that Saudi, Emirati and Bahraini banks might receive official guidance to pull deposits and interbank loans from Qatar.

According to a joint statement on Saudi state news agency SPA, the four countries agreed to a request by Kuwait to extend by 48 hours Sunday’s deadline for compliance. Foreign ministers from the four countries will meet in Cairo on Wednesday to discuss Qatar, Egypt said on Sunday. Kuwait state media said its Emir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah had received a response by Qatar to the demands. It did not elaborate. The four states cut diplomatic and commercial ties with Qatar on June 5, accusing it of supporting terrorism, meddling in their internal affairs and cosying up to regional adversary Iran, all of which Qatar denies. Mediation efforts, including by the United States, have been fruitless. Trump spoke separately to the leaders of Saudi Arabia, Qatar and the Crown Prince of Abu Dhabi in the UAE to discuss his “concerns about the ongoing dispute”, the White House said.

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For history buffs.

The Crash of 1929 (Jesse’s Café/PBS)

“…people believed that everything was going to be great always, always. There was a feeling of optimism in the air that you cannot even describe today.” “There was great hope. America came out of World War I with the economy intact. We were the only strong country in the world. The dollar was king. We had a very popular president in the middle of the decade, Calvin Coolidge, and an even more popular one elected in 1928, Herbert Hoover. So things looked pretty good.” “The economy was changing in this new America. It was the dawn of the consumer revolution. New inventions, mass marketing, factories turning out amazing products like radios, rayon, air conditioners, underarm deodorant…One of the most wondrous inventions of the age was consumer credit. Before 1920, the average worker couldn’t borrow money. By 1929, “buy now, pay later” had become a way of life.”

“Wall Street got the credit for this prosperity and Wall Street was dominated by just a small group of wealthy men. Rarely in the history of this nation had so much raw power been concentrated in the hands of a few businessmen…” “One of the most common tactics was to manipulate the price of a particular stock, a stock like Radio Corporation of America…Wealthy investors would pool their money in a secret agreement to buy a stock, inflate its price and then sell it to an unsuspecting public. Most stocks in the 1920s were regularly manipulated by insiders ” “I would say that practically all the financial journals were on the take. This includes reporters for The Wall Street Journal, The New York Times, The Herald-Tribune, you name it. So if you were a pool operator, you’d call your friend at The Times and say, “Look, Charlie, there’s an envelope waiting for you here and we think that perhaps you should write something nice about RCA.”

And Charlie would write something nice about RCA. A publicity man called A. Newton Plummer had canceled checks from practically every major journalist in New York City… Then, they would begin to — what was called “painting the tape” and they would make the stock look exciting. They would trade among themselves and you’d see these big prints on RCA and people will say, “Oh, it looks as though that stock is being accumulated. Now, if they are behind it, you want to join them, so you go out and you buy stock also. Now, what’s happening is the stock goes from 10 to 15 to 20 and now, it’s at 20 and you start buying, other people start buying at 30, 40. The original group, the pool, they’ve stopped buying. They’re selling you the stock. It’s now 50 and they’re out of it. And what happens, of course, is the stock collapses.”

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Prediction: the EU will offer more money. They simply don’t understand that some things are not about money.

Italy Urges EU Ports To Take Migrants As Pressure Builds (AFP)

The French and German interior ministers met with their Italian counterpart Marco Minniti in Paris on Sunday to discuss a “coordinated response” to Italy’s migrant crisis, hours after Minniti had called on other European countries to open their ports to rescue ships. The working dinner at the French interior ministry – also attended by EU Commissioner for Refugees Dimitris Avramopoulos – was aimed at finding “a coordinated and concerted response to the migrant flux in the central Mediterranean (route) and see how to better help the Italians,” a source close the talks said. The four-way talks between Minniti, Thomas de Maiziere of Germany, Gerard Collomb of France and Avramopoulos will also prepare them for EU talks in Tallinn this week. “The talks went off very well,” a member of the Italian delegation told AFP after the Paris meeting, with the “Italian proposals being discussed”.

“We are under enormous pressure,” Minniti had said earlier Sunday in an interview with Il Messaggero. With arrivals in Italy up nearly 19% over the same period last year, Rome has threatened to close its ports to privately-funded aid boats or insist that funding be cut to EU countries which fail to help. “There are NGO ships, Sophia and Frontex boats, Italian coast guard vessels” saving migrants i the Mediterranean, Minniti said, referring to the aid boats as well as vessels deployed under EU border security missions. “They are sailing under the flags of various European countries. If the only ports where refugees are taken to are Italian, something is not working. This is the heart of the question,” he said. “I am a europhile and I would be proud if even one vessel, instead of arriving in Italy, went to another European port. It would not resolve Italy’s problem, but it would be an extraordinary signal” of support, he said.

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I’ve often said that the Congo is perhaps richer in resources than any other country. It should be prosperous, but instead it ranks 227th out of 230 countries for GDP per capita. That’s our doing.

From July 5, see documentary at https://rtd.rt.com/films/congo-my-precious/

‘Our Future Is Slavery, The West Gets Everything’ – Congo (RT)

RT Documentary travels to the vast, landlocked Democratic Republic of Congo, prized for its mineral resources, but plagued by centuries of colonial rule, dictatorship, civil wars and lawlessness, and meets people trying to make a living in one of the most desperate places on Earth. The documentary crew’s key to understanding the country, seven times the size of Germany, was Bernard Kalume Buleri, born in 1960, the same year DRC was granted its independence from Belgium. Buleri served as an interpreter, guide, and finally the hero and symbol of the country, having been a direct participant in some of its bloodiest chapters. “I can’t say that the Congolese, we are in control of our destiny. No, because the ones who benefit from our minerals are not the local population, but Western countries are the ones who are taking everything.

They make themselves rich, while we are getting poorer and poorer,” says Buleri. The country of almost 80 million is one of the world’s largest exporters of diamonds, coltan – essential for electronics – and has massive deposits of copper, tin and cobalt. “I’m afraid even for my children. Because they will continue in this system to be slaves forever. We’ll never be powerful enough to challenge the Western countries. So, the future will be the future of slaves,” Buleri continues. There is plenty of blame to go around for the predicament of what is also a fertile and scenic land. With almost no educated elite, DRC was poorly-prepared for its separation from Belgian rule, now best remembered for the atrocity-filled reign of King Leopold II, which may have killed as many as half of the country’s population.

The vacuum was filled by the archetype-setting African kleptocrat Mobutu Sese Seko, who ruled the country for more than three decades, until he was deposed in 1997, plunging Africa into a series of continent-wide conflicts that may have resulted in as many as 5 million deaths through violence, starvation and disease. The country’s below-ground wealth means that it was never left alone for long enough to reform and wean itself off its reliance on metals and gems – the widely-mentioned “mineral curse.” The mines the RT crew passes are now owned by local warlords, chiefs and officials, with exports mostly going to China. [..] Millions of locals – perhaps as many as one-fifth of the adult population – are employed in what is known as artisanal mining, inefficient small-scale prospecting with simple handheld tools, with no safety measures or guaranteed wages. But for a country that ranks 227th out of 230 for GDP per capita, according to World Bank data, any job at all is a matter of survival.

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