Skripal Archives - Page 2 of 3 - The Automatic Earth

The federal deficit hit $895 billion in the first 11 months of fiscal 2018, an increase of $222 billion, or 32 percent, over the same period the previous year, according to the Congressional Budget Office (CBO). The nonpartisan CBO reported that the central drivers of the increasing deficit were the Republican tax law and the bipartisan agreement to increase spending. As a result, revenue only rose 1 percent, failing to keep up with a 7 percent surge in spending, it added. Revenue from individual and payroll taxes was up some $105 billion, or 4 percent, while corporate taxes fell $71 billion, or 30 percent.

The August statistics were somewhat inflated, however, due to a timing shift for certain payments, putting the deficit measure through August slightly out of sync with the previous year, the CBO noted. Had it not been for the timing shift, the deficit would have increased $154 billion instead of $222 billion. Earlier analysis from CBO projected that deficits would near $1 trillion in 2019 and surpass that amount the following year.

With 10 years of such market manipulation that there is no market left, what exactly is normal?

• The Fed’s Lost Opportunity to Return to Normal (Rickards)

Current Fed policy will push the U.S. economy to the brink of recession, possibly by later this year. When that happens, the Fed will have to reverse course and ease monetary policy. Meanwhile, the economic cheerleaders recite recent GDP figures and the stimulative effects of the Trump tax cuts. There’s one problem with the happy talk about 3–4% growth. We’ve seen this movie before. In 2009, almost every economic forecaster and commentator was talking about “green shoots.” In 2010, then-Secretary of the Treasury Tim Geithner forecast the “recovery summer.” In 2017, the global monetary elites were praising the arrival (at last) of “synchronized global growth.”

None of this wishful thinking panned out. The green shoots turned brown, the recovery summer never came and the synchronized global growth was over almost as soon as it began. Strong quarters have been followed by much weaker quarters within six months on six separate occasions in the past nine years. There’s no reason to believe this time will be any different. This expansion has been extraordinarily long — over 30% longer than average — indicating that a recession should be expected sooner rather than later. Into this mix of weak growth comes the Federal Reserve, which is tightening monetary policy, reducing the base money supply and supporting a strong dollar. All of these policies are associated with slower growth ahead and a high probability of recession.

Plunge protection. Imitating ECB.

• China ‘National Team’ Bought Billions In Stocks in Q2 – Goldman (CNBC)

As the mainland Chinese stock market dropped in the second quarter, groups with government ties bought shares, according to a Goldman Sachs analysis. The “national team” of entities related to or influenced by the state was formed in 2015 to help support stocks during that summer’s market turmoil. The Shanghai composite crashed more than 40 percent that year, and has struggled to recover since. The index’s losses accelerated in June, when it fell 20 percent from a recent high, or into a bear market. Beijing’s efforts to reduce the economy’s reliance on debt has led to tighter financial conditions, while rising U.S.-China trade tensions have added to pressure on growth. In all, the Shanghai composite lost 10 percent in the second quarter.

During that time, the national team bought an estimated net 116 billion yuan — or nearly $17 billion — worth of local stocks known as A shares, Goldman Sachs’ Chief China Equity Strategist Kinger Lau said in a Friday report.The second-quarter purchases account for about 0.2 percent of market capitalization and follow sales of 71 billion yuan in the first quarter, Lau said. Overall, his team estimated the national team holds 1.5 trillion yuan worth of A shares, or about 2.9 percent of the listed market capitalization. The findings are based on analysis of required quarterly disclosures of the top 10 shareholders in A share companies.

Source: Goldman Sachs Global Investment Research

Trump unites China and Russia.

• Putin Bashes Protectionism, ‘Sanctions, Bans And Political Bias’ (CNBC)

President Vladimir Putin appeared to take another thinly veiled swipe at Trump’s economic policies on Wednesday, a day after Russia and China vowed to stand together to fight protectionism. “The world and global economy are coming up against new forms of protectionism today with different kinds of barriers which are increasing,” Russian President Vladimir Putin told a plenary session at the Eastern Economic Forum (EEF) in Vladivostok, Russia. “Basic principles of trade — competition and mutual economic benefit — are depreciated and unfortunately undermined, they’re becoming hostages of ideological and fleeting political situations, in that we see a serious challenge for all of the global economy, especially for the dynamically-growing Asia-Pacific and its leadership,” he added.

Putin’s comments come as China and Russia appeared united on Tuesday after the leaders of both countries pledged to stand together to fight protectionism. The comments were seen as a thinly veiled attack on U.S. President Donald Trump who has implemented a massive package of tariffs on Chinese imports and threatened further sanctions on Moscow. [..] Putin said Wednesday that Russia and its eastern economic partners should work to keep trade free of barriers. “We’re convinced that in order for our region to continue to achieve high growth rates, and to remain a key participant in the global economy and trade, it should retain the spirit of economic freedom, to be the space of business initiative without sanctions, bans and political bias ,” Putin told delegates.

With a whole series of CCTV images. Because Russian secret agents on murder missions are too stupid to avoid their photos being taken. There is even one where they take time to ‘pose’ by looking into a shop window with a camera, taken AFTER the ‘attack’.

• Skripal Poisoning Suspects Are Civilians, Not Criminals, Says Putin (G.)

The two men accused by the UK of carrying out a nerve agent attack in Salisbury have been identified and are civilians, not criminals, Vladimir Putin has said. “We know who they are, we have found them,” Putin said at an economic forum in the eastern Russian city of Vladivostok, adding that the two men – named by the UK as Alexander Petrov and Ruslan Boshirov – might soon make appearances in the media to protest their innocence. “These are civilians,” Putin said in remarks reported by Russian news agencies. “There is nothing criminal here.” British officials have said the men were agents of Russian military intelligence dispatched to kill Sergei Skripal, a former Russian spy who had given information to British intelligence. He was imprisoned in Russia before being released in a spy swap in 2010.

Putin’s remarks appeared to be a denial that the men worked for Russia’s military intelligence service the Main Directorate, commonly called the GRU. British officials this month charged the two men in absentia with the attempted murder with novichok of Sergei Skripal, his daughter, Yulia, and a police officer who investigated the scene. Scotland Yard released CCTV images of the two suspects at Salisbury train station on the day of the attack. [..] Putin called on the two men to appear in the media to protest their innocence, saying he “wanted to address them directly”. The Russian’s president’s words marked a departure from his country’s earlier position, which was to disregard the evidence released by Scotland Yard as a fabrication.

And the military too. And this is just what you’re allowed to know.

• UK Police Prepares For Disorder At Ports If UK Crashes Out Of EU (Ind.)

Police are preparing for disorder at British ports in the event of a no-deal Brexit, Metropolitan Police Commissioner Cressida Dick has revealed. The head of Scotland Yard said her force was also bracing for the loss of key European data systems that are “very important” for keeping London safe. She said that the police were conducting careful, calm and sober contingency planning for eventualities, particularly relating to ports in Kent as well as in other parts of the UK. “Is there going to be protests, is there going to be disorder?” she asked, while addressing delegates at the Police Superintendents’ Association conference in Leicester. “At the moment in planning terms it’s a long-way off because there are so many uncertainties that could happen.”

Her comments came after a leaked document prepared by the National Police Coordination Centre revealed the “real possibility” of police calling on the military to help with civil disorder caused by a no-deal Brexit. It warned of traffic queues at ports and said concerns around medical supplies could “feed civil disorder”, while a rise in the price of goods could also lead to “widespread protest” and trigger crimes such as theft. Ms Dick raised additional concerns over the potential loss of access to EU systems including the European Arrest Warrant, Europol and databases containing information on criminals and terrorists entering the UK. “At any one time in my custody suites I will have 35, 40 per cent foreign nationals, over half EU citizens and a huge chunk would have travelled through Europe,” she explained.

The UK still thinks they can make separate deals. It doesn’t understand the EU.

• Barnier Confronts Raab Over Discovery Of Brexit No-Deal Letters To EU27 (G.)

Dominic Raab has been reprimanded by Michel Barnier after the EU’s chief negotiator discovered the British government had written to the 27 other member states asking for side negotiations on transport in the event of a no-deal Brexit. The Brexit secretary was confronted by Barnier during their most recent meeting in Brussels over correspondence sent in recent days to EU capitals by the Department for Transport. The letters had asked the member states to prepare to engage with the British government in side deals on aviation and haulage, to allow key trade flows to continue in the event of the UK and the EU failing to come to an agreement on leaving the union by 29 March 2019.

The transport secretary, Chris Grayling, had ordered the letters to be sent despite being told less than two weeks ago by the European commission’s most senior trade official, Violeta Bulc, that without a deal this autumn, there would be no other agreements made to protect the UK economy. Barnier is said to have reiterated that message to Raab, telling the cabinet minister: “If there is no deal, there is no trust.” The bruising exchange came on the same day that Theresa May told cabinet members the UK should remain “the EU’s closest ally” after Brexit, amid a growing belief in Downing Street that progress was gradually being made in the long-running divorce talks.

A few of them may understand the issues, but the majority sure don’t.

• Europe Is Voting On Controversial Internet Copyright Law (CNBC)

European parliamentarians are set to vote on a controversial copyright law that some critics believe could stop people from sharing memes and articles online. Lawmakers in Strasbourg, France, will cast their votes on the European Union’s new copyright directive on Wednesday. The result of that vote could determine whether large tech companies including Facebook, Twitter and Google are forced to use filtering systems that block copyrighted content. Two particular parts of the directive have attracted the most criticism from pro-internet freedom activists. One is Article 13. This section calls on internet giants to take “appropriate and proportionate” measures to prevent user-generated content that infringes a rightsholder’s copyright.

This part of the law has come under heavy criticism over concerns that tech giants could end up using automated content filtering systems. The law states that “effective content recognition systems” should be put in place by digital companies to prevent copyrighted materials from being distributed on their platforms. Campaigners have scrutinized this part of the legislation over concerns that it could amount to censorship, and argue that the use of copyright-protected material by way of commentary or parody should be permitted under the doctrine of “fair use.” Particular attention has been paid to the status of “memes,” which often rely on copyright protected images or pieces of video, and whether they could be censored as a result.

Echoing a point I’ve been making.

• Americans Need Social Media Guided by the US Constitution (Krieger)

This past Friday, Alex Jones was de-platformed from the last couple of third party tools he had been using to publicly communicate his message after Twitter and Apple permanently banned him and his website Infowars. This means an American citizen with a very large audience who played a meaningful role in the 2016 election, has been banned from all of the most widely used products of communication of our age: Twitter, Facebook, Google’s YouTube and Apple’s iTunes. You can point out he still has his radio show and website, and this is unquestionably true, but when it comes to the everyday tools most people interact with to receive information and communicate in 2018, Alex Jones has been thrown down the memory hole. Not because he was convicted of a crime or broke any laws, but because corporate executives decided he crossed an arbitrary line of their own creation.

It’s not against the law to be crazy or say crazy things in this country. It’s also not against the law to say hateful things. It’s pretty obvious the main reason Alex Jones was deleted from public discourse by Silicon Valley executives relates to his impact and popularity. [..] unabashed bigots like David Duke and Louis Farrakhan continue to have active presences across social media, and rightly so. The difference is neither David Duke nor Louis Farrakhan played a major role in the election of Donald Trump, whereas Alex Jones did. Jones and Infowars were having an outsized impact on the U.S. political discourse in a manner tech giant executives found threatening and offensive, so they collectively found excuses to silence him.

When the outrage mob consisting of politicians, corporate media outlets like CNN, and even his own employees, complained to Twitter’s Jack Dorsey on the issue of Alex Jones, he couldn’t hold the line on free speech because his company’s own policies are junk. Twitter, Facebook and YouTube should have a clear policy when it comes to speech, and it should be this: If it isn’t breaking the law – in other words, if it’s protected speech under the First Amendment – it stays up. Period. When you have corporate rules against “hate speech,” you’re relying on a concept that doesn’t really have any sort of legal standing when it comes to free speech in this country. There is no “hate speech” exception to the First Amendment of the U.S Constitution.

They want to regulate themselves. Don’t let them.

• Internet Industry Group Backs ‘National’ Data Privacy Approach (R.)

A group representing major internet companies including Facebook, Amazon.com and Alphabet said on Tuesday it backed modernizing U.S. data privacy rules but wants a national approach that would preempt California’s new regulations that take effect in 2020. The Internet Association, a group representing more than 40 major internet and technology firms including Netflix, Microsoft and Twitter, said “internet companies support an economy-wide, national approach to regulation that protects the privacy of all Americans.” The group said it backed principles that would ensure consumers should have “meaningful controls over how personal information they provide” is used and should be able to know who it is being shared with.

Consumers should also be able to seek deletion of data or request corrections or take personal information to another company that provides similar services and have reasonable access to the personal information they provide, it said. The group also told policymakers they should give companies flexibility in notifying individuals, set a “performance standard” on privacy and data security protections that avoids a prescriptive approach and set national data breach notification rules. Michael Beckerman, president and chief executive officer of the Internet Association, said in an interview the proposals were “very forward looking and very aggressive” and would push to ensure the new rules apply “economy wide.” He said the group “would be very active working with both the administration and Congress on putting pen to paper.”

Leftwing and intelligence.

• Armageddon Rides In The Balance (PCR)

For some time I have pointed out the paradox of the American liberal/progressive/left being allied with the CIA, FBI, military/security complex and deep state. Now leftist Ann Garrison has noticed the paradox of this alliance. She concludes that the left has lost its mind. Indeed, it has. Out of its hatred of Trump the left has united with the forces of evil and war that are leading to conflict with Russia. The left’s hatred of Trump shows that the American left has totally seperated from the interests of the working class, which elected Trump. The American left has abandoned the working class for the group victimizations and hatreds of Identity Politics. As Hillary put it, the working class comprises the “Trump deplorables.” The Democratic Party, like the Republicans, represents the ruling oligarchy.

I have explained that the leftwing lost its bearings when the Soviet Union collapsed and socialism gave way to neoliberal privatizations. The moral fury of the leftwing movement had to go somewhere, and it found its home in Identity Politics in which the white heterosexual male takes the place of the capitalist, and his victim groups—blacks, women, homosexuals, illegal immigrants—take the place of the working class. The consequences of the leftwing’s alliance with warmongers and liars is the leftwing’s loss of veracity. The left has endorsed a CIA orchestration—“Russiagate”—for which there is no known evidence, but which the left supports as proven truth. The purpose of “Russiagate” is to prevent President Trump from normalizing relations with Russia.

In these times when so many Americans are hard pressed, normal relations could adversely impact the budget and power of the military/security complex by reducing the “Russian threat.” If there is no real Russian threat, only an orchestrated perceived one, the question arises: why does the military/security complex have a taxpayer-supported annual budget of $1,000 billion dollars? The presstitutes have kept the truth from emerging that the “Russiagate” investigation has found no sign of a Trump/Putin plot to steal the 2016 presidential election from Hillary. Indeed, it has been proven beyond all questioning that the Hillary emails were not hacked but were downloaded on a thumb drive. This proof collapses the entire premise of “Russiagate.” Nevertheless, the hoax continues.

He might as well be talking about himself.

• Tsipras Warns “Europe Has No Future If It Doesn’t Admit Mistakes” (KTG)

Europe will have no future if the bloc does not admit mistakes in handling the financial and the migration crisis, Prime Minister warned the European Parliament on Tuesday. Alexis Tsipras said Europe could face an existential crisis over nationalism unless the bloc admits mistakes and its failure to handle a fiscal crisis and the deal with an influx of migrants effectively. The Greek Prime Minister said economic austerity pushed by European governments has fostered fear, racism and the emergence of the far right.“ The economic austerity pursued by European governments had fostered fear, racism and the emergence of the far right, he told lawmakers in the European parliament.

“The EU’s failure to give democratic and effective responses to modern challenges will lead irrevocably to the triumph of chauvinism and will rekindle nationalistic rivalry,” he said. “It will turn it into a fragmented continent, a continent without cohesion, without an international role, and without a future,” he said. Tsipras also criticised Europe’s handling of security and said this could have helped bolster support for far right parties. Several European countries including France and Belgium have seen attacks by Islamist militants in recent years. “The issue at stake is existential for Europe,” said Tsipras. “The handling so far of the financial crisis, the refugee crisis and a security crisis, has exposed huge deficiencies and contradictions.”

“93% of farmers expressed concern that the merger will harm independent farmers and farming communities.”

• Monsanto-Bayer Merger Hurts Farmers and Consumers (CP)

The U.S. Department of Justice issued a stern warning in its lawsuit against the conditionally-approved mega-merger between Bayer and Monsanto in June. The anti-competitive price effects of the merger would, according to the DOJ, “likely result in hundreds of millions of dollars per year in harm, raising costs to farmers and consumers.” The Justice Department warned that the combining of Bayer and Monsanto would reduce competition for vegetable seeds, likely driving up prices. Further, farmers might see prices for GMO cotton, canola, corn and soybean seeds increase, as well as price increases for herbicide and seed treatments. After imposing some limited divestments on Monsanto, the DOJ approved this merger, enabling Monsanto to hide its controversial name brand while giving Bayer anti-competitive control over seeds, pesticides, farmers and consumers worldwide.

But the harm to consumers and farmers will still exist. The DOJ is on the brink of essentially authorizing a monopoly. This is bad news for nearly everyone on the planet except Bayer and Monsanto executives and shareholders. Aside from a combined Bayer-Monsanto, only three other seed companies will be in the market manufacture and sell these products. Farmers overwhelmingly object to the merger. 93% of farmers expressed concern that the merger will harm independent farmers and farming communities. Farmers’ top three concerns were that Bayer/Monsanto “would use its dominance in one product to push sales of other products;” “control data about farm practices;” and that the merger will create “increased pressure for chemically dependent farming.”

Meanwhile, super typhoon Mangkhut is heading straight for Hong Kong.

• ‘Monster’ Hurricane Florence To Pummel US Southeast For Days (R.)

Hurricane Florence, on track to become the first Category 4 storm to make a direct hit on North Carolina in six decades, howled closer to shore on Tuesday, threatening to unleash deadly pounding surf, days of torrential rain and severe flooding. Fierce winds and massive waves are expected to lash the coasts of North and South Carolina and Virginia even before Florence makes landfall by early Friday, bringing a storm surge as much as 13 feet (4 meters), the National Hurricane Center in Miami warned. Catastrophic floods could follow if the storm stalls inland, it said. Although Florence was still days from arrival, authorities took extraordinary measures to move people out of harm’s way. More than 1 million residents have been ordered to evacuate from the coastline of the three states, while university campuses, schools and factories were being shuttered.

The U.S. Coast Guard closed ports in Wilmington and Morehead City, North Carolina and Hampton Roads, Virginia to inbound vessels greater than 500 tons and was requiring vessels of that size to leave if they did not have permission to be in the ports. Packing maximum sustained winds of 140 miles per hour (225 km per hour), the storm ranked as a Category 4 on the five-step Saffir-Simpson hurricane scale and was expected to grow stronger and larger over the next few days, the NHC said. “This storm is a monster,” North Carolina Governor Roy Cooper said. “Even if you’ve ridden out storms before, this one is different. Don’t bet your life on riding out a monster.” He cited forecasts showing Florence was likely to stall over North Carolina, “bringing days and days of rain.”

Graph: weather.com

Debt Rattle September 6 2018

Sep 062018

September 6, 2018 Posted by Raúl Ilargi Meijer at 9:22 am Finance Tagged with: Abenomics, Brexit, denuclearize, Dorsey, Facebook, Korea, resistance, Sandberg, Skripal, treason, Trump, Twitter, White House 13 Responses »

Vincent van Gogh Night Cafe (Place Lamartine in Arles) 1888

• I Am Part of the Resistance Inside the Trump Administration (NYT)

• Who Wrote The Anti-Trump Op-Ed? (MW)

• Trump May Declassify the 20 FISA Docs Congress Wants (Sara Carter)

• Trump Accuses Social Media Firms Of Interfering In 2016, 2018 Elections (CNBC)

• Jack Dorsey Tops Sheryl Sandberg As Tech’s DC Rep (R.)

• Sheryl Sandberg Misled Congress About Facebook’s Conscience (IC)

• Only 17% Expect A Good Brexit Deal For Britain, Just 40% Back Leave (ES)

• Chequers Plan Is Dead,’ Says MP, Who Reported Rejection By Barnier (G.)

• Kim Jong Un Wants To Denuclearize During Trump’s First Term (R.)

• BOJ Board Member Urges More Stimulus, ‘No Room For Complacency’ (R.)

• Huge Surplus Draws Germany Back Into Trump’s Trade War Line Of Fire (R.)

• Here’s Another Headache For Beaten-Up Auto Stocks (MW)

• Tunisian Fishermen Await Trial In Italy After ‘Saving 100s Of Migrants’ (G.)

• The Impossible Photo (Craig Murray)

Whatever it is, it has nothing to do with democracy. Trump was elected, not some faceless group around him.

• I Am Part of the Resistance Inside the Trump Administration (NYT)

President Trump is facing a test to his presidency unlike any faced by a modern American leader. It’s not just that the special counsel looms large. Or that the country is bitterly divided over Mr. Trump’s leadership. Or even that his party might well lose the House to an opposition hellbent on his downfall. The dilemma — which he does not fully grasp — is that many of the senior officials in his own administration are working diligently from within to frustrate parts of his agenda and his worst inclinations. I would know. I am one of them. To be clear, ours is not the popular “resistance” of the left. We want the administration to succeed and think that many of its policies have already made America safer and more prosperous.

But we believe our first duty is to this country, and the president continues to act in a manner that is detrimental to the health of our republic. That is why many Trump appointees have vowed to do what we can to preserve our democratic institutions while thwarting Mr. Trump’s more misguided impulses until he is out of office. The root of the problem is the president’s amorality. Anyone who works with him knows he is not moored to any discernible first principles that guide his decision making. Although he was elected as a Republican, the president shows little affinity for ideals long espoused by conservatives: free minds, free markets and free people.

At best, he has invoked these ideals in scripted settings. At worst, he has attacked them outright. In addition to his mass-marketing of the notion that the press is the “enemy of the people,” President Trump’s impulses are generally anti-trade and anti-democratic. Don’t get me wrong. There are bright spots that the near-ceaseless negative coverage of the administration fails to capture: effective deregulation, historic tax reform, a more robust military and more. But these successes have come despite — not because of — the president’s leadership style, which is impetuous, adversarial, petty and ineffective.

“Our job is to publish op-eds that further the public’s understanding of what the hell is going on, and I think this piece makes a significant contribution.”
Jim Bennett, New York Times editorial page editor

• Who Wrote The Anti-Trump Op-Ed? (MW)

So who wrote it? From newsrooms to coffee-house chatter to the White House itself, that was the big question on everyone’s mind Wednesday night after the New York Times published an anonymous, bombshell anti-Trump op-ed written by a “senior administration official.” The article, which described an “amoral” and “reckless” President Donald Trump being covertly held in check by the “adults in the room” to preserve the country’s democratic principles, sent Trump into a rage, the Washington Post reported. Trump said the author was gutless, and tweeted “TREASON?” White House press secretary Sarah Sanders said the author was “pathetic” and should resign. But the author remained a mystery.

The White House was in “total meltdown” Wednesday night, a source told Politico. “It’s like the horror movies when everyone realizes the call is coming from inside the house,” another source told the Post. Some criticized the Times for running an anonymous opinion piece, but editorial page editor Jim Bennett told Vanity Fair that the newspaper had a responsibility to run it. “The question for us was, does making this unusual grant, is it merited by the significance of the piece? We feel that it was,” Bennett said. So who was it? That’s the million-dollar question. Literally, since the author could very well receive a book deal once his or her identity is revealed.

The Times, at least, isn’t telling. In an interview with CNN’s Brian Stelter, Times op-ed editor Jim Dao said the official reached out through an intermediary several days ago. He said the Times did speak to the author directly. “We were simply trying to abide by the standard that the Times in general would use when referring to someone who’s not named,” Dao told CNN. Only a “very small number of people within the Times who know this person’s identity,” Dao said, and the Times used “special precautions” to protect their identity.

As I said in The Shape of Trump to Come, declassifying is the way to go. But some will resist it, for sure.

• Trump May Declassify the 20 FISA Docs Congress Wants (Sara Carter)

President Trump is expected to declassify the redacted 20 pages of documents from the controversial Foreign Intelligence Surveillance Act (FISA) warrant that have still not been made public, which allowed the FBI to spy on short-term campaign volunteer Carter Page, numerous sources told SaraACarter.com. This comes after nearly a year of stonewalling by the Department of Justice at the demand of lawmakers, who claim that the 20 redacted pages will reveal explosive information about the FBI’s handling of the Trump-Russia investigation, according to sources.

However, President Trump, who has been under pressure from some DOJ officials not to release the classified documents, “could always change his mind and it’s not a guarantee that it will happen, but the indications are that it more than likely will possibly be before the end of this week,” said a U.S. official, who spoke on condition of anonymity due to the sensitive nature of the subject.

In July, the Justice Department released over 400 previously top-secret documents connected to the Page warrant. However, more than 20 pages of the FISA document remained highly classified and have only been viewed by a select group of Congressional members and investigators. The lawmakers are now asking that those documents be made public. Behind the scenes, the battle between Justice Department officials and senior members of Congress intensified over the past year, leading lawmakers to call on President Trump to intervene and declassify the documents.

In a 38 minute interview with the Daily Caller Tuesday, President Trump said the White House is “looking at it very seriously right now because the things that have gone on are so bad, so bad. I mean they were surveilling my campaign. If that happened on the other foot, they would’ve considered that treasonous. They would’ve considered that spying at the highest level. Can you imagine if we were doing that to Obama instead of Obama and his people doing that to us? Everybody would’ve been in jail for the next 500 years. OK? Can you believe it, where they paid this guy millions of dollars, it turned out? If you look at all of the things that are happening.”

Only one way out: make it impossible. But that means giving them a different status.

• Trump Accuses Social Media Firms Of Interfering In 2016, 2018 Elections (CNBC)

President Donald Trump accused social networks of interfering in the 2016 presidential election and November’s midterm elections. Trump told online conservative publication The Daily Caller he thinks big tech firms “already have” intervened in the midterms, and said Facebook and Google intervened in the 2016 presidential election on behalf of Democratic presidential candidate Hillary Clinton. “I mean the true interference in the last election was that — if you look at all, virtually all of those companies are super liberal companies in favor of Hillary Clinton,” Trump said, according to the outlet.

“Maybe I did a better job because I’m good with the Twitter and I’m good at social media, but the truth is they were all on Hillary Clinton’s side, and if you look at what was going on with Facebook and with Google and all of it, they were very much on her side.” The president also warned tech firms not to continue with alleged bias against conservatives. Trump accused Google last week of rigging search results to prioritize negative coverage and left-leaning news outlets. He warned the issue “will be addressed,” suggesting regulatory consequences for social media companies. Trump then mentioned rivals Facebook and Twitter by name, saying all three companies were “treading on very, very troubled territory and they have to be careful.” Google, Twitter and Facebook have denied political bias in the algorithmic tailoring of news content.

“In an afternoon House hearing, Dorsey said if you sat down with a cup of coffee and read Twitter’s rules, you would not be able to understand them.”

• Jack Dorsey Tops Sheryl Sandberg As Tech’s DC Rep (R.)

Jack Dorsey surprisingly topped Sheryl Sandberg as Big Tech’s best Washington representative. Twitter’s usually dry chief executive seemed more genuine than the polished Facebook No. 2 in his first congressional hearing. In Wednesday’s Senate Intelligence Committee hearing, Dorsey said he is a man of “few words.” It was a stark contrast to Sandberg, who is more at ease speaking in public; her Washington experience as Larry Summers’ chief of staff at Treasury two decades ago also showed through. But she sounded more like a politician, repeatedly saying “we can do better” and using jargon like “inauthentic accounts.”

Dorsey gave a more honest analysis of the existential dilemma facing his $25 billion micro-blogging site and other social-media platforms – from toxic interactions between users, to promulgation of actual fake news to election meddling. Yet inflammatory content often produces more user engagement, leading to growth and advertising revenue. Nonetheless, Dorsey told lawmakers he is taking a fundamental look at Twitter’s business model and user incentives. For example, the company is examining whether it’s right to entice a user to gather more followers by putting that figure in a noticeable font. The same goes for retweets. Dorsey said those metrics should not be a proxy for how much a user contributes to healthy dialogue on Twitter, one of the goals of the platform.

[..] The companies brought the scrutiny on themselves, partly by acting too slowly. But Dorsey sounded humbled and acknowledged reality while Sandberg seemed to think Facebook can manage lawmakers by outtalking them. In an afternoon House hearing, Dorsey said if you sat down with a cup of coffee and read Twitter’s rules, you would not be able to understand them. In the Senate, Sandberg sounded defensive when asked about Facebook’s terms of service.

That’s some pretty brazen lies.

• Sheryl Sandberg Misled Congress About Facebook’s Conscience (IC)

Facebook chief operating officer Sheryl Sandberg draped herself in the star-spangled banner of American principles before today’s Senate Select Intelligence Committee hearing on social media. Sandberg proclaimed that democratic values of free expression were integral to the company’s conscience. “We would only operate in a country where we could do so in keeping with our values,” she went on. Either this was a lie told under oath, or Facebook has some pretty lousy values. Sen. Marco Rubio, R-Fla., questioned Sandberg and Twitter CEO Jack Dorsey about the fact that they are both ostensibly American companies, but also firms with users around the world — including in countries with legal systems and values that differ drastically from the United States.

Rubio cited various governments that crack down on, say, pro-democracy activism and that criminalize such speech. How can a company like Facebook claim that it’s committed to free expression as a global value while maintaining its adherence to rule of law on a local level? When it comes to democratic values, Rubio asked, “Do you support them only in the United States or are these principles that you feel obligated to support around the world?” Sandberg, as always, didn’t miss a beat: “We support these principles around the world.” Shortly thereafter she made the claim that Facebook simply would not do business in a country where these values couldn’t be maintained. Based on the information Facebook itself makes available, this is false.

In its latest publicly available “transparency report,” Facebook says it helps block free expression as a matter of policy — so long as it’s technically legal in a given market. For instance, in the United Arab Emirates, a country that Human Rights Watch says “arbitrarily detains and in some cases forcibly disappears individuals who criticize the authorities,” Facebook does its part to help.

if only the UK had functioning media.

• Only 17% Expect A Good Brexit Deal For Britain, Just 40% Back Leave (ES)

Fewer than one in five voters now expect Britain to secure a good Brexit deal as Theresa May’s plans remain under fire, according to damning new research. The proportion of people expecting a good deal has slumped dramatically from 33% in February last year to just 17% in June 2018, the survey showed. The data was conducted and shared ahead of the publication of the Prime Minister’s heavily criticised Chequers plan for the UK’s future relationship with the EU. Some 57% of voters now predict Britain will end talks with a bad deal, up from 37% since February 2017. That’s according to the survey for NatCen Social Research. Just over 50% now expect the UK’s economy to be worse of as a result of Brexit, while just 38% said Britain’s departure would mean lower immigration.

According to the new figurers, only 13% said the Government had handled negotiations well so far. That’s down from 29% in February last year. Some 64% said it had handled talks badly. There was also very little support for the EU’s approach to negotiations, with 57% saying Brussels had handled them badly. Only 16% said it had handled them well. The report, by polling expert Professor Sir John Curtice of Strathclyde University, found that 59% of members of a NatCen panel now say they would vote Remain in a second referendum. Just 41% were backing Leave. However, the researchers cautioned that this apparently comfortable lead for Remain may be skewed by the fact those responding reported voting against Brexit by a margin of 53-47% in the 2016 referendum.

Chequers is all May has.

• Chequers Plan Is Dead,’ Says MP, Who Reported Rejection By Barnier (G.)

Theresa May’s Brexit plan was left mired in uncertainty after reports that the EU’s chief negotiator, Michel Barnier, told British MPs that “les propositions sont mortes” in a Brussels meeting. The Labour MP Stephen Kinnock revealed that in talks this week Barnier had declared the Chequers proposals “dead” and suggested that there was a fundamental misunderstanding in the UK about how the single market worked. “I can tell you absolutely, unequivocally, without a shadow of a doubt that Chequers is dead in the water. Michel Barnier made it crystal clear that Chequers is completely unacceptable to the EU,” Kinnock said.

The senior remainer urged the Brexit secretary, Dominic Raab, and the prime minister’s Brexit adviser Olly Robbins, appearing before the European scrutiny committee on Wednesday, to accept that Brussels was not simply “sabre rattling” as a negotiating tactic. May faces a concerted campaign to “chuck Chequers” from disgruntled Tory MPs, led by the former ministers Boris Johnson and David Davis. There are also deep-rooted concerns in Brussels over her facilitated customs arrangement and common rulebook proposals. Bill Cash, the veteran Tory Eurosceptic, told the committee that Chequers should be “put out of its misery” as the plan satisfied “virtually no one” while the former Brexit minister David Jones asked why the government was “flogging this dead horse”.

Only thing to do for the US is to get out of the way, let Kim and Moon do what their people want them to: make peace, reunite. Trump understands this, Pompeo does not.

• Kim Jong Un Wants To Denuclearize During Trump’s First Term (R.)

North Korean leader Kim Jong Un said he wants to denuclearize the Korean peninsula during U.S. President Donald Trump’s first term, as he agreed to hold a third summit with his South Korean counterpart this month in Pyongyang, Seoul officials said on Thursday. Kim and South Korean President Moon Jae-in will meet in the North Korean capital on Sept. 18-20, during which they will discuss “practical measures” toward denuclearization, the South’s national security adviser, Chung Eui-yong, told reporters a day after meeting Kim in Pyongyang.

Kim told the South Korean officials that his faith in Trump remains “unchanged” and he wanted to denuclearize and end long-standing hostile relations between North Korea and the United States during Trump’s first term ending early 2021, Chung said. Kim’s remarks to South Korean officials mark the first time that the North Korean leader has offered a potential timeline for dismantling his country’s nuclear weapons programme. Kim “reaffirmed his determination to completely denuclearize” the peninsula, and expressed his willingness for close cooperation with South Korea and the United States in that regard, Chung said.

For years, Abenomics was all about stimulus will create inflation. Double or nothing!

• BOJ Board Member Urges More Stimulus, ‘No Room For Complacency’ (R.)

Bank of Japan (BOJ) board member Goushi Kataoka criticized on Thursday the central bank’s decision in July to make its policy framework more sustainable, arguing that it should have instead ramped up stimulus to hasten the achievement of its elusive price target. He also warned that escalating trade frictions could weigh on Japan’s export-reliant economy by slowing global economic expansion next year. “Global trade frictions are intensifying and there’s no room for complacency,” Kataoka said in a speech to business leaders in Yokohama, a city near Tokyo. Kataoka, who opposed the BOJ’s decision in July to take steps to address the rising costs of prolonged easing, said it was counter-productive to allow long-term yields to rise at a time inflation remained low.

“There’s no need to allow long-term interest rates to move in a wider range at a time when the BOJ is cutting its inflation forecasts,” he said. “Allowing long-term rates to rise at a time inflation and inflation expectations aren’t heightening much could delay achievement of the BOJ’s price target,” Kataoka said, adding that the BOJ must instead take additional easing measures to fire up inflation. Under its yield curve control policy, the central bank guides short-term interest rates at minus 0.1 percent and the 10-year government bond yield around zero percent.

Germany’s surplus inside the EU is the bigger problem.

• Huge Surplus Draws Germany Back Into Trump’s Trade War Line Of Fire (R.)

German trade figures later this week will serve as a reminder to global economy watchers, especially the primary occupant of 1600 Pennsylvania Avenue NW, Washington, D.C., of the chasm between countries that run huge current account surpluses and deficits. U.S. president Donald Trump last week renewed his attack on Germany and Europe for, in his view, manipulating the euro lower to boost exports and trade in their favour at the expense of U.S. companies. “Almost as bad as China, just smaller,” Trump told Bloomberg News. In fact, when it comes to trade surpluses vis-à-vis the United States and more broadly, Germany is bigger than China. If that U.S.-German chasm is allowed to go unchecked and stretch further, the snapback could trigger a surge in currency market volatility – currently near historic lows – and maybe even pose a threat to global financial stability.

Euro/dollar is the world’s most liquid and important exchange rate, accounting for almost a quarter of all FX trades, or around $1 trillion a day. It is so stable precisely because it is so deep and liquid. But there’s no guarantee it will remain an oasis of calm. Developed markets have been largely untouched by the volatility tearing through large parts of emerging markets right now, but no corner of world markets would be spared from turbulence, stress or rapid moves in the euro/dollar exchange rate. Germany had a larger trade surplus with the United States than any other country in the first half of this year, worth some 24.4 billion euros ($28.5 billion) which contributed to a global trade surplus of 121.5 billion euros.

Intereting development.

• Here’s Another Headache For Beaten-Up Auto Stocks (MW)

Americans are falling out of love with their cars — at least when it comes to the daily commute. Wolf Richter, of the Wolf Street financial blog, cites this growing challenge for the auto market, in our call of the day. “Driving, while still by far the top way of getting to work in America, has lost some ground,” Richter writes. “For auto makers, this is not a propitious trend.” Richter has created the chart below that’s based on recent Gallup polling. It shows a jump in the percentage of American workers who don’t use a car in their commute. That figure climbed to 16% this year, up from 9% in 2007. Instead of driving themselves or carpooling, these folks are taking public transportation, telecommuting, biking, walking or doing “something else” (maybe going by boat or scooter?). “This shift is real,” Richter says. “While the annual increments are small, spread over time they will further impact the dynamics of the auto industry.”

The people who save lives are arrested by those who don’t. But in the end the value you attach to another person’s life is the one you attach to your own.

• Tunisian Fishermen Await Trial In Italy After ‘Saving 100s Of Migrants’ (G.)

Friends and colleagues have rallied to the defence of six Tunisian men awaiting trial in Italy on people smuggling charges, saying they are fishermen who have saved hundreds of migrants and refugees over the years who risked drowning in the Mediterranean. The men were arrested at sea at the weekend after their trawler released a small vessel it had been towing with 14 migrants onboard, 24 miles from the coast of the Italian island of Lampedusa. Italian authorities said an aeroplane crew from the European border agency Frontex had first located the trawler almost 80 nautical miles from Lampedusa and decided to monitor the situation.They alerted the Italian police after the migrant vessel was released, who then arrested all crew members at sea.

According to their lawyers, the Tunisians maintain that they saw a migrant vessel in distress and a common decision was made to tow it to safety in Italian waters. They claim they called the Italian coastguard so it could intervene and take them to shore. Prosecutors have accused the men of illegally escorting the boat into Italian waters and say they have no evidence of an SOS sent by either the migrant boat or by the fishermen’s vessel. Among those arrested were 45-year-old Chamseddine Ben Alì Bourassine, who is known in his native city, Zarzis, which lies close to the Libyan border, for saving migrants and bringing human remains caught in his nets back to shore to give the often anonymous dead a dignified burial.

[..] Giulia Bertoluzzi, an Italian filmmaker and journalist who directed the documentary Strange Fish, about Bourassine, said the men were well known in their home town. “In Zarzis, Bourassine and his crew are known as anonymous heroes”, Bertoluzzi told the Guardian. “Some time ago a petition was circulated to nominate him for the Nobel peace prize. He saved thousands of lives since.”

The Skripal story has been a stinker from the get-go, but come on, now you have Aunt Millie photoshopping pics?

• The Impossible Photo (Craig Murray)

Russia has developed an astonishing new technology enabling its secret agents to occupy precisely the same space at precisely the same time. These CCTV images released by Scotland yard today allegedly show Alexander Petrov and Ruslan Boshirov both occupying exactly the same space at Gatwick airport at precisely the same second. 16.22.43 on 2 March 2018. Note neither photo shows the other following less than a second behind. There is no physically possible explanation for this. You can see ten yards behind each of them, and neither has anybody behind for at least ten yards. Yet they were both photographed in the same spot at the same second. The only possible explanations are:
1) One of the two is travelling faster than Usain Bolt can sprint 2) Scotland Yard has issued doctored CCTV images/timeline. I am going with the Met issuing doctored images.

Debt Rattle August 28 2018

Aug 282018

August 28, 2018 Posted by Raúl Ilargi Meijer at 9:38 am Finance Tagged with: BBC, Brexit, DOJ, FBI, FISA, Iran, Lanny Davis, Lesbos, May, NAFTA, Roger Waters, Skripal, suicide, Trump 17 Responses »

Vincent van Gogh Cypresses in starry night (reed pen) 1889

• Meadows: FBI/DOJ Leaked To Press, Used Articles To Obtain FISA Warrants (ZH)

• Lanny Davis Admits Being Source For CNN Trump Tower “Bombshell” (ZH)

• Trump Announces US-Mexico Trade Deal, Setting Stage For Nafta Overhaul (G.)

• Iran Says It Has Full Control Of Gulf And US Navy Does Not Belong There (R.)

• Theresa May Says A No-Deal Brexit ‘Wouldn’t Be The End Of The World’ (G.)

• Out In Left Field (Kunstler)

• Skripals – When the BBC Hide the Truth (Craig Murray)

• ‘Criminal’ Roger Waters Blacklisted By Ukraine Over Russian Interviews (RT)

• Greece Needs €4.7 Billion In Additional Tax Revenues To Reach Targets (K.)

• Children Attempting Suicide At Greek Refugee Camp (BBC)

• The Impending End Of Most Life On Earth (G.)

2nd special counsel, where are you?

• Meadows: FBI/DOJ Leaked To Press, Used Articles To Obtain FISA Warrants (ZH)

Freedom Caucus Chairman Mark Meadows (R-NC) dropped a late-night bombshell on Monday suggesting there’s evidence that the FBI and DOJ rigged their own FISA spy warrants by leaking information to the press, then using the resultant articles to obtain court authorization to surveil targets. “We’ve learned NEW information suggesting our suspicions are true: FBI/DOJ have previously leaked info to the press, and then used those same press stories as a separate source to justify FISA’s,” tweeted Meadows. Until now, we’ve known that the creator of the so-called Steele Dossier, former UK spy Christopher Steele, leaked information directly to Yahoo! News journalist Michael Isikoff – whose article became a supporting piece of evidence in the FBI’s FISA warrant application and subsequent renewals for Trump adviser Carter Page.

So while we’ve known that Steele seeded Isikoff with information from his dubious dossier, and that the FBI then used both Steele’s dossier and Isikoff’s Steele-inspired article to game the FISA system, Rep. Mark Meadows now says that the FBI/DOJ directly leaked information to the press, which they then used for the same type of FISA scheme. Strong evidence was discovered in January suggesting that former FBI employee Lisa Page leaked privileged information to Devlin Barrett, formerly of the Wall Street Journal and now with the Washington Post. Whether any of Barrett’s reporting was subsequently used to obtain a FISA warrant is unknown.

Meanwhile, Rep. Meadows’s Monday night tweet comes hours before twice-demoted DOJ employee Bruce Ohr is set to give closed-door testimony to the House Oversight Committee. Ohr was caught lying about his involvement with opposition research firm Fusion GPS co-founder Glenn Simpson – who employed Steele. Ohr’s CIA-linked wife, Nellie, was also employed by Fusion as part of the firm’s anti-Trump efforts, and had ongoing communications with the ex-UK spy, Christopher Steele as well.

Cohen’s lawyer is the best thing that happened to Trump in ages.

• Lanny Davis Admits Being Source For CNN Trump Tower “Bombshell” (ZH)

On July 26th, CNN unleashed a “bombshell” report that Michael Cohen was claiming that candidate Trump knew in advance about the infamous 2016 Trump Tower meeting. Dropping this line in the middle of their story: “Contacted by CNN, one of Cohen’s attorneys, Lanny Davis, declined to comment.”Then, last week, amid the deafening euphoria of the ‘anti-Trump’-ers, Davis told Anderson Cooper: “I think the reporting of the story got mixed up in the course of a criminal investigation. We were not the source of the story.” Davis increasingly backed away from the story in recent days, telling the Washington Post that he is not certain if the claim is accurate, and that he could not independently corroborate it. Destroying CNN’s “bombshell” story, crushing the hopes of millions of ‘not my president’-ers.

As Buzzfeed notes, after Davis publicly backtracked from the claims, the New York Post and the Washington Post outed him as their confirming source and published apologies from Davis But, of course, CNN was giving up such a great story so easily (whether it’s true or fake news), and followed up anxiously by none other than Brian Stelter who gushed over Twitter in the face of Davis’ refutation of their entire story that: ” Re: CNN’s July 27 story about Cohen claiming that Trump knew in advance about the Trump Tower meeting: “We stand by our story, and are confident in our reporting of it.”” All of which brings up to date, safe in the knowledge that despite Davis’ denial that CNN’s story ever occurred, CNN has “a source” that confirmed it and that’s good enough for them.

BUT… Now, after all that pre-amble, double-talk, and utterly bullshit fake news reporting, Lanny Davis – who we perhaps need to remind readers once again is an extremely well-paid f**king lawyer and communications expert – has told Buzzfeed that he was the anonymous source in a July CNN story. Tonight, Davis told BuzzFeed News that he regrets both his role as an anonymous source and his subsequent denial of his own involvement. Davis told BuzzFeed News that he did, in fact, speak anonymously to CNN for its story, which cited “sources with knowledge” — meaning more than one person. “I made a mistake,” Davis said. Regarding his comments about a month later to Cooper, he added, “I did not mean to be cute.”

Canada on hold.

• Trump Announces US-Mexico Trade Deal, Setting Stage For Nafta Overhaul (G.)

Donald Trump has said he will strike a new trade deal with Mexico while ripping up the North American Free Trade Agreement (Nafta) and threatening a trade war with Canada. “I’ll be terminating the existing deal and going into this deal,” the US president told reporters in the Oval Office on Monday. “We’ll be starting negotiating with Canada relatively soon. They want to negotiate very badly.” He added: “One way or the other, we have a deal with Canada. It’ll either be a tariff on cars or it will be a negotiated deal. Frankly, a tariff on cars is a much easier way to go but perhaps the other would be much better for Canada.”

Trump also said it might be possible to make a deal involving all three countries, like the 24-year-old Nafta pact, but that separate bilateral agreements are also a possibility. However, any trade deal would have to first be approved by Congress, and time is running out. Mexico’s President Enrique Peña Nieto will soon leave office and there is no guarantee his successor, Andrés Manuel López Obrador, will agree to the same terms. Nafta reduced most trade barriers between the US, Mexico and Canada. But Trump and other critics say it encouraged US manufacturers to move south of the border to exploit low-wage Mexican labour.

They have a point.

• Iran Says It Has Full Control Of Gulf And US Navy Does Not Belong There (R.)

Iran has full control of the Gulf, and the U.S. Navy does not belong there, the head of the navy of Iran’s Revolutionary Guards, General Alireza Tangsiri, said on Monday, according to the Tasnim news agency. The remarks come at a time when Tehran has suggested that it could take military action in the Gulf to block oil exports of other regional countries in retaliation for U.S. sanctions intended to halt its oil sales. Washington maintains a fleet in the Gulf which protects oil shipping routes. Tangsiri said Iran had full control of both the Gulf itself and the Strait of Hormuz that leads into it. Closing off the strait would be the most direct way of blocking shipping.

“We can ensure the security of the Persian Gulf and there is no need for the presence of aliens like the U.S. and the countries whose home is not in here,” he said in the quote, which appeared in English translation on Tasnim. Tension between Iran and the United States has escalated since President Donald Trump pulled out of a 2015 nuclear deal between Iran and world powers in May and reimposed sanctions.

Just the end of her.

• Theresa May Says A No-Deal Brexit ‘Wouldn’t Be The End Of The World’ (G.)

Theresa May claimed that a no-deal Brexit “wouldn’t be the end of the world” as she sought to downplay a controversial warning made by Philip Hammond last week that it would cost £80bn in extra borrowing and inhibit long-term economic growth. The prime minister conceded that crashing out of the European Union without a deal “wouldn’t be a walk in the park” but went on to argue that the UK could make an economic success of the unprecedented situation if it proved impossible to negotiate a satisfactory divorce. Her comments were designed to distance herself from pessimistic Treasury forecasts highlighted by the chancellor at the end of last week, predictions that incensed the Tory right and led to renewed calls from hard Brexiters for Hammond’s dismissal.

Speaking to reporters as she began a three-day trip to Africa, May cited and endorsed remarks about the Brexit situation made last week by Roberto Azevêdo, the director general of the World Trade Organisation, to justify a gentle rebuke of the chancellor. The prime minister said: “Look at what the director general of the World Trade Organisation has said. He has said about the no-deal situation that it will not be a walk in the park, but it wouldn’t be the end of the world. “What the government is doing is putting in place the preparation such that if we are in that situation, we can make a success of it, just as we can make a success of a good deal.”

Huber. Remember the name.

• Out In Left Field (Kunstler)

With Russian “meddling” stalled in the dead letter office, The New York Times has apparently re-branded itself Floozie Central in its quixotic campaign to unseat the Golden Golem of Greatness by all means necessary. The Stormy Daniels affair, and its slime-trail of payoffs, is the slender thread that the Resistance hopes to hang Donald Trump on. The great legal minds of cable TV have been very busy trying to suss out which part of the $130,000 non-disclosure payoff might apply as a campaign financing violation. If Rudy Giuliani still had his wits about him, of course, he would claim that the money was just Ms. Daniel’s going rate for an overnight frolic amongst her legendary twin peaks, that is, a sex worker’s simple transaction fee.

Where does it say in the constitution that a president may not consort with tramps and hussies? It was hilarious to discover that Mr. Trump’s erstwhile personal lawyer, Michael Cohen, picked DC Swamp attorney and Clinton insider, Lanny Davis, to represent him in negotiations with Special Counsel Robert Mueller. It must be like the old days in the locker room of the Burning Tree Golf Club for Lanny and Bob. They go back at least to the days when the Clintons fended off accusations of issuing pardons to special friends for a $450,000 payoff on Bubba’s last day in office, January 19, 2001. And there must have been a reunion around 2010 on the Uranium One matter, in which a tidy $145-million from Russian Oligarch Central landed in the Clinton Foundation coffers after Madam Secretary Hillary signed onto a go-ahead with the U-1 deal.

Meanwhile, way out in Left Field — Salt Lake City, actually —a forgotten lone ranger named John W. Huber is ostensibly toiling away on a roster of allegations so far ignored by the Mueller team, namely the politicization of the FBI and the Department of Justice, and the actions taken deviously by senior employees there against Mr. Trump during and after the 2016 election. Mr. Huber was tapped to carry out this assignment by Attorney General Jeff Sessions late in 2017.

BBC Newsnight correspondent Mark Urban met with Skripal multiple times in 2017.

• Skripals – When the BBC Hide the Truth (Craig Murray)

On 8 July 2018 a lady named Kirsty Eccles asked what, in its enormous ramifications, historians may one day see as the most important Freedom of Information request ever made. The rest of this post requires extremely close and careful reading, and some thought, for you to understand that claim. “Dear British Broadcasting Corporation, 1: Why did BBC Newsnight correspondent Mark Urban keep secret from the licence payers that he had been having meetings with Sergei Skripal only last summer. 2: When did the BBC know this? 3: Please provide me with copies of all correspondence between yourselves and Mark Urban on the subject of Sergei Skripal. Yours faithfully, Kirsty Eccles

The ramifications of this little request are enormous as they cut right to the heart of the ramping up of the new Cold War, of the BBC’s propaganda collusion with the security services to that end, and of the concoction of fraudulent evidence in the Steele “dirty dossier”. This also of course casts a strong light on more plausible motives for an attack on the Skripals. Which is why the BBC point blank refused to answer Kirsty’s request, stating that it was subject to the Freedom of Information exemption for “Journalism”.

“The information you have requested is excluded from the Act because it is held for the purposes of ‘journalism, art or literature.’ The BBC is therefore not obliged to provide this information to you. Part VI of Schedule 1 to FOIA provides that information held by the BBC and the other public service broadcasters is only covered by the Act if it is held for ‘purposes other than those of journalism, art or literature”. The BBC is not required to supply information held for the purposes of creating the BBC’s output or information that supports and is closely associated with these creative activities.”

Fun.

• ‘Criminal’ Roger Waters Blacklisted By Ukraine Over Russian Interviews (RT)

Pink Floyd founder Roger Waters has found himself blacklisted by being added to the Ukrainian database of national enemies, after statements to Russian media about Crimea and the conflict in Ukraine. Waters, 74, is wrapping up his US+Them European tour with concerts in St. Petersburg and Moscow this week and spoke with several Russian outlets about both music and his political activism. The rock musician has been an outspoken champion of the Palestinian cause and a critic of Western-backed rebels in Syria. On Monday, however, his name appeared in the “purgatory” database of Mirotvorets (Peacemaker), maintained by people connected with Ukraine’s security and intelligence services and listing alleged enemies of the state.

The site says “criminal” Waters is responsible of “anti-Ukrainian propaganda, attacks on the territorial integrity of Ukraine [and] participation in attempts to legalize the Russian annexation of Crimea.” As proof, the site lists links to two interviews Waters gave to Russian media outlets RIA and Izvestiya, and quotes specifically a statement about the city of Sevastopol being Russian and important to Russians. Waters called “laughable” the idea of blaming Russia for the conflict in Ukraine and said the blame rests with Victoria Nuland, the senior State Department official for Europe and Eurasia during the Obama administration. [..] Waters also expressed concern about the US leadership, which he said does not seem to recognize any agreements and does whatever it wants. Such a policy will eventually get everyone killed, the rock star told Izvestiya, in an interview published Monday.

Already grossly overtaxed.

• Greece Needs €4.7 Billion In Additional Tax Revenues To Reach Targets (K.)

The Greek government will have to collect additional tax revenues of 4.7 billion euros in the first post-bailout period of enhanced supervision (2018-2022) by its creditors, in order to achieve the agreed primary surpluses and record surpluses. These revenues are not expected to come only from economic growth but also from the imposition of new taxes, notably the trimming of the tax reduction from a current level of 1,900 euros to 1,250 euros – a change that will affect 6 million salaried employees and pensioners.

In 2018, direct taxes are projected to generate 17.4 billion euros, slightly less than the 17.7 billion of 2017. The reduction is entirely attributable to the fact that high tax rates result in an ever-increasing reduction of declared incomes. As for indirect taxes, they are expected to drop to 35.2 billion euros this year compared with 35.4 billion in 2017, while no significant change is expected for 2019, despite the projected economic growth. For 2020, tax revenues are expected to rise further when the government is seen reducing the tax-free threshold. It is indicative that revenues from direct taxes are seen rising to 18.40 billion euros that year, versus 17.43 billion in 2019.

“..her family spend all day queuing for food at the camp and all night ready to run..”

• Children Attempting Suicide At Greek Refugee Camp (BBC)

At Moria camp on the Greek island of Lesbos, there is deadly violence, overcrowding, appalling sanitary conditions and now a charity says children as young as 10 are attempting suicide. The Victoria Derbyshire programme has been given rare access inside. “We are always ready to escape, 24 hours a day we have our children ready,” says Sara Khan, originally from Afghanistan. “The violence means our little ones don’t get to sleep.” Sara explains that her family spend all day queuing for food at the camp and all night ready to run – in fear of the fights that break out constantly. Conditions are so appalling that charities have actually left in protest.

The place smells of raw sewage, and there are around 70 people per toilet, according to medical charity Medecins Sans Frontieres (MSF). Some people live in mobile cabins, but rammed in-between them all are tents and tarpaulin sheets – homes for those who cannot obtain any official living space. The camp is also now sprawling into surrounding countryside. One tent houses 17 people – four families under one canvas. MSF says there are currently more than 8,000 people crammed into Moria camp, which was supposed to house 3,000. [..] The camp opened in 2015 and was initially designed as a transit post for people to stay for a matter of days – but some have been here for years.

It is controlled by the Greek government, and the overcrowding is because Greece is enforcing the EU’s “containment” policy, keeping people on the island rather than transferring them to the Greek mainland. It is part of the EU-Turkey deal which aims to return thousands of refugees to Turkey, and it has been in force since March 2016. From then to July 2018, according to EU figures, 71,645 new refugees arrived in Greece by sea and only 2,224 have been returned to Turkey. George Matthaiou, a Greek government press representative on Moria, concedes conditions are terrible, but blames the EU rather than Greece. “We don’t have the money. You know the situation of Greece, economically,” he says. “I want to help but I can do nothing, because the European Union closed the borders.”

“I’m not going to write anymore because there’s nothing more that can be said..”

• The Impending End Of Most Life On Earth (G.)

We’re doomed,” says Mayer Hillman with such a beaming smile that it takes a moment for the words to sink in. “The outcome is death, and it’s the end of most life on the planet because we’re so dependent on the burning of fossil fuels. There are no means of reversing the process which is melting the polar ice caps. And very few appear to be prepared to say so.” Hillman, an 86-year-old social scientist and senior fellow emeritus of the Policy Studies Institute, does say so. His bleak forecast of the consequence of runaway climate change, he says without fanfare, is his “last will and testament”. His last intervention in public life. “I’m not going to write anymore because there’s nothing more that can be said,” he says when I first hear him speak to a stunned audience at the University of East Anglia late last year.

From Malthus to the Millennium Bug, apocalyptic thinking has a poor track record. But when it issues from Hillman, it may be worth paying attention. Over nearly 60 years, his research has used factual data to challenge policymakers’ conventional wisdom. In 1972, he criticised out-of-town shopping centres more than 20 years before the government changed planning rules to stop their spread. In 1980, he recommended halting the closure of branch line railways – only now are some closed lines reopening. In 1984, he proposed energy ratings for houses – finally adopted as government policy in 2007. And, more than 40 years ago, he presciently challenged society’s pursuit of economic growth.

[..] In 1971, 80% of British seven- and eight-year-old children went to school on their own; today it’s virtually unthinkable that a seven-year-old would walk to school without an adult. As Hillman has pointed out, we’ve removed children from danger rather than removing danger from children – and filled roads with polluting cars on school runs. He calculated that escorting children took 900m adult hours in 1990, costing the economy £20bn each year. It will be even more expensive today.

Debt Rattle July 19 2018

Jul 192018

July 19, 2018 Posted by Raúl Ilargi Meijer at 8:16 am Finance Tagged with: Amazon, Brexit, cashless, EU, Goldman, Google, Putin, Russiagate, Skripal, Trump 8 Responses »

Félix Vallotton The balloon 1899

• Is Goldman Sachs Really a Bank? Really? (Whalen)

• Everyone Is Smart Except Trump (Fischer)

• Russiagate Is Like 9/11, Except It’s Made Of Pure Narrative (CJ)

• Kudlow: US Expecting Significant Trade Offer From EU Soon (CNBC)

• Mega Tech’s Trillions Of Market Value In Eye-Popping Perspective (MW)

• Amazon Now Accounts For 49% Of US Online Retail (ZH)

• EU Commissioner On $5 Billion Fine: Google Has To ‘Stop This Behavior’ (CNBC)

• How Can We Reverse Brexit When Europe Doesn’t Want Us Back? (Münchau)

• Police ‘Identify’ Skripal Suspects (PA)

• Cali High Court Orders Proposal To Split Up State Removed From Ballot (R.)

• The Cashless Society Is A Con – And Big Finance Is Behind It (G.)

• The Most Unbelievable Tax Break Ever (F.)

No, it’s not.

• Is Goldman Sachs Really a Bank? Really? (Whalen)

Most of the largest US banks that reported earnings this week saw interest expense rise by mid-double digits even as interest earnings rose by single digits. Goldman Sachs, for example, saw its funding expenses increase 61% year-over-year (YOY) in Q2’18 while interest income rose just 50%. Citigroup (C), on the other hand, being already positioned in the world of institutional funding, saw interest expense rise only 28%. But the Q2’18 earnings seem to confirm a rising trend in funding costs that could see NIM flatten out and decline by 2019. When Solomon’s ascension to the top spot was announced at Goldman Sachs, our friend Bill Cohan commented on CNBC that this amounted to a takeover of GS by alumni of Bear, Stearns & Co. God does have a sense of humor.

He also reminded Andrew Sorkin et al on Squawk Box that the freewheeling Goldman of old is long gone and that GS is now run and regulated as “a bank.” Well, no, not really. Goldman Sachs is basically a broker-dealer with a small bank in tow. When you compare the net interest margin of GS with its peers, for example, the other members of Peer Group 1 defined by the FFIEC reported NIM of 3.28% vs 0.41% for GS in Q1’18. Because the bank unit of GS is so small, the overall NIM for the group is 1/10th of its peers compared with total assets. Goldman makes less than 2% on earning assets vs almost 4% for its asset peers. So to paraphrase the wisdom of Josh Brown, GS does not make money on interest rates, up or down, but rather earns fees from trading and investment banking. GS profits from the spread, both in terms of price and volume.

The basic problem confronting David Solomon and his colleagues is that GS really is not a bank. It is regulated like a bank and therefore constrained in terms of business activities, but it does not earn the carry on assets that most banks take for granted when they turn on the lights each morning. Talk of expanding the banking side of the business (aka “Marcus”) is fine, but progress in this regard is very slow indeed. Of the $9.4 billion in net revenues reported in Q2’18, just $1 billion represented net interest earnings.

My Twitter account risks becoming unreadable because of this. I like diverse points of view, but there’s just too much nastiness. People retweeting factoids dozens of times a day.

• Everyone Is Smart Except Trump (Fischer)

It really is quite simple. Everyone is smart except Donald J. Trump. That’s why they all are billionaires and all got elected President. Only Trump does not know what he is doing. Only Trump does not know how to negotiate with Vladimir Putin. Anderson Cooper knows how to stand up to Putin. The whole crowd at MSNBC does. All the journalists do. They could not stand up to Matt Lauer at NBC. They could not stand up to Charlie Rose at CBS. They could not stand up to Mark Halperin at NBC. Nor up to Leon Wieseltier at the New Republic, nor Jann Wenner at Rolling Stone, nor Michael Oreskes at NPR, at the New York Times, or at the Associated Press. But — oh, wow! — can they ever stand up to Putin! Only Trump is incapable of negotiating with the Russian tyrant.

Remember the four years when Anderson Cooper was President of the United States? And before that — when the entire Washington Post editorial staff jointly were elected to be President? Remember? Neither do I. The Seedier Media never have negotiated life and death, not corporate life and death, and not human life and death. They think they know how to negotiate, but they do not know how. They go to a college, are told by peers that they are smart, get some good grades, proceed to a graduate degree in journalism, and get hired as analysts. Now they are experts, ready to take on Putin and the Iranian Ayatollahs at age 30. That is not the road to expertise in tough dealing. The alternate road is that, along the way, maybe you get forced into some street fights.

Sometimes the other guy wins, and sometimes you beat the intestines out of him. Then you deal with grown-ups as you mature, and you learn that people can be nasty, often after they smile and speak softly. You get cheated a few times, played. And you learn. Maybe you become an attorney litigating multi-million-dollar case matters. Say what you will about attorneys, but those years — not the years in law school, not the years drafting legal memoranda, but the years of meeting face-to-face and confronting opposing counsel — those years can teach a great deal. They can teach how to transition from sweet, gentle, diplomatic negotiating to tough negotiating. At some point, with enough tough-nosed experience, you figure out Trump’s “The Art of the Deal” yourself.

Well, it sells. Bigtime.

• Russiagate Is Like 9/11, Except It’s Made Of Pure Narrative (CJ)

[..] the current administration has actually been far more aggressive against Russia than the previous administration was, and has worked against Russian interests to a far greater extent. If they wanted to, the international alliance of plutocrats and intelligence/defense agencies could just as easily use their near-total control of the narrative to advance the story that Trump is a dangerous Russia hawk who is imperiling the entire world by inflicting insane escalations against a nuclear superpower. They could elicit the exact same panicked emotional response that they are eliciting right now using the exact same media and the exact same factual situation. They wouldn’t have to change a single thing except where they place their emphasis in telling the story.

The known facts would all remain exactly as they are; all that would have to change is the narrative. Public support for Russiagate depends on the fact that most people don’t recognize how pervasively their day-to-day experience is dominated by narrative. If you are intellectually honest with yourself, you will acknowledge that you think about Russia a lot more now than you did in 2015. Russia hasn’t changed any since 2015; all that has changed is the narrative that is being told about it. And yet now the mass media and a huge chunk of rank-and-file America now view it as a major threat and think about it constantly. All they had to do was talk about Russia constantly in a fearful and urgent way, and now US liberals are convinced that Vladimir Putin is an omnipotent world-dominating supervillain who has infiltrated the highest levels of the US government.

Juncker to visit Trump next week.

• Kudlow: US Expecting Significant Trade Offer From EU Soon (CNBC)

Top White House economic adviser Larry Kudlow said the administration expects a significant trade offer to come from the European Union soon. In an interview at CNBC’s Delivering Alpha conference in New York on Wednesday, Kudlow said a lot of discussions are being held with individual countries. EU President Jean-Claude Juncker is coming to Washington next week, Kudlow said. “We will be in discussions,” he said. “I am told he’s bringing a very important free trade offer.” Kudlow added he couldn’t confirm that.

President Donald Trump has opened trade discussions on numerous fronts, using tariffs on products like steel and aluminum imports and the threat of tariffs on automobiles to get people to the negotiating table. The tariffs have rankled long-time allies in Europe and elsewhere, and tensions elevated after Trump’s visit to the NATO summit last week. That hasn’t deterred progress, however. “I am told through sources, including our ambassadors, that [German Chancellor Angela] Merkel has been working on that, shaking up the EU,” Kudlow said. “The president has put things on the table. The Europeans are looking at them, okay? And we may be pleasantly surprised.”

“Value”.

• Mega Tech’s Trillions Of Market Value In Eye-Popping Perspective (MW)

A picture is worth a thousand words but a pie chart may be more eloquent, especially when it comes to sizing up the giants of the tech industry. Michael Batnick, director of research at Ritholtz Wealth Management, on Wednesday tweeted out a chart that underscored how absolutely dominant tech companies have become in a world where size seems to increasingly matter. Batnick, in his tweet, noted that the top five S&P 500 companies — Apple, Amazon.com, Alphabet Inc., Microsoft and Facebook — combined are worth $4.095 trillion versus $4.092 trillion for the bottom 282 companies.

As mind-boggling as that may be, Batnick told MarketWatch that this sort of concentration is normal, pointing out that AT&T and General Motors represented 14.5% of the S&P 500 during their heyday in 1965. What is different today, however, is that all the big players are uniformly tech names. “The gains have been extraordinary over the past five years, with Facebook, Apple, Amazon, Microsoft and Google growing from $1.2 trillion to near $4 trillion,” wrote Batnick in a recent blog entry.

At what point do we call it a monopoly?

• Amazon Now Accounts For 49% Of US Online Retail (ZH)

Amazon will account for 49.1% of all online retail sales, up from 43% the year before, if they clear an expected $258 billion in sales this year. The stunning figure provided by research firm eMarketer is tempered by the fact that Amazon’s near-majority share of online sales accounts for just 5% of all retail sales. Amazon is set to rake in $258.22 billion in US retail sales in 2018, while annual growth has jumped 29.2% year-over-year, reports Tech Crunch. Fueling Amazon’s rise is a robust network of third-party sellers and a rapidly expanding range of goods from groceries to fashion – made all the more attractive for subscribers of their Prime services.

Now, it is fast approaching a tipping point where more people will be spending money online with Amazon, than with all other retailers — combined. Amazon’s next-closest competitor, eBay, a very, very distant second at 6.6 percent, and Apple in third at 3.9 percent. Walmart, the world’s biggest retailer when counting physical stores, has yet to really hit the right note in e-commerce and comes in behind Apple with 3.7 percent of online sales in the US. -TC

And more fines coming. But who pays in the end?

• EU Commissioner On $5 Billion Fine: Google Has To ‘Stop This Behavior’ (CNBC)

The EU’s commissioner for competition, Margrethe Vestager, said Google has to “stop this behavior” in an interview with CNBC on Wednesday, after a record antitrust fine against the company. “The thing that Google has to do now is of course to stop,” Vestager told “Squawk on the Street.” “This of course will free up the market to allow mobile manufacturers to use other Android systems.” Regulators hit the Alphabet unit with a $5 billion fine for abusing the dominance of its Android mobile operating system – by far the most popular smartphone OS in the world. The EU says Google pushed device makers to bundle Google apps like the Chrome web browser and Gmail, which harms competition. The European Commission, the EU’s executive body, threatened additional fines if Google didn’t put an end to illegal conduct within 90 days.

“They have products that we all like and like to use,” Vestager said. “The only thing we don’t like is when they get to misuse their success and put in place illegal restrictions.” Wednesday’s fine is the largest ever issued to Google, dwarfing even the $2.7 billion penalty from the EU last year for favoring its shopping service over competitors. The company plans to appeal the ruling, according to a statement. The commission is still investigating a third antitrust case against Google’s search advertising service, AdSense. “This is not about Apple, this is not about Android, this is about Google behavior — a behavior that’s illegal for a dominant company because it’s locking down competition and disabling innovation and choice that we would all like to enjoy,” Vestager said.

Good question. But first more mayhem at home.

• How Can We Reverse Brexit When Europe Doesn’t Want Us Back? (Münchau)

What strikes me most about the Brexit discussions in the UK is not the usual Eurosceptic xenophobia, but the lack of understanding of the EU’s position by those who campaign in favour of a Brexit reversal. The leaders of the EU are officially disappointed that Britain is headed for the door; secretly they will be relieved when it goes. In truth, the EU does not really want Brexit to be reversed. Why? Britain has a reputation as an obstreperous “partner” in the institutions, and in the past has sometimes made it harder for Europe to move forward—most notoriously in 2011, when David Cameron used the euro–crisis to try and extract concessions on other things. In the event of a reversal, the Europeans would rightly assume that the ghost of Brexit would never go away.

Ukip would be back in the European Parliament, adding strength to the Salvini and Le Pen factions. Brussels, Berlin and Paris could all do without that. Let’s imagine—and it’s more of a leap than many Remainers acknowledge—that all the legal questions could be swept out of the way. I suppose the EU would ultimately accept a reversal, but without enthusiasm—and with conditions. If a UK prime minister wrote a letter to Donald Tusk, president of the European Council, asking for Brexit to be reversed, he would immediately invoke a special EU summit, in which the other leaders would make at least three demands: the first is an end to the British budget rebate for the next budget period, and perhaps also an end to certain other instances of special treatment, such as on the Charter of Fundamental Rights.

Secondly, the EU would insist that the UK could not block decisions they have taken since the UK announced its intention to leave. The third ask would be for a political commitment by the big political parties not to trigger Brexit again after the next elections. Just let that sink in for a minute. And in any second referendum, the Brexiteers could reasonably argue that the UK was not simply remaining, but doing so on much less advantageous terms. Britain, in other words, would inject a whole new wave of political instability and unpleasantness into its own politics, and those of the continent, if—after all the turmoil—it tried to remain. It would become harder, not easier, for Europe to grapple with the really big challenges it faces with the UK back on board.

No they haven’t. An unnnamed cources alleges the police say it’s the Russians. And that is presented as news. Because waiting for proof is so last century.

• Police ‘Identify’ Skripal Suspects (PA)

Police are believed to have identified the suspected perpetrators of the Novichok attack on Russian former spy Sergei Skripal. Officers think several Russians were involved in the attempted murder of the former double agent and daughter Yulia in Salisbury and are looking for more than one suspect. A source with knowledge of the investigation told the Press Association: “Investigators believe they have identified the suspected perpetrators of the Novichok attack through CCTV and have cross-checked this with records of people who entered the country around that time. They (the investigators) are sure they (the suspects) are Russian.”

The news comes as an inquest is due to open on Thursday for Dawn Sturgess, 44, who died earlier this month, eight days after apparently coming into contact with Novichok from the same batch used in the attempted murder of the Skripals in March. Her partner Charlie Rowley, 45, was left fighting for his life after also being contaminated by the chemical weapon. It is understood Sturgess was exposed to at least 10 times the amount of nerve agent the Skripals came into contact with. Investigators are working to the theory that the substance was in a discarded perfume bottle found by the couple in a park or somewhere in Salisbury city centre and Sturgess sprayed Novichok straight on to her skin, the source said.

Some rich guy’s hobby.

• Cali High Court Orders Proposal To Split Up State Removed From Ballot (R.)

The California Supreme Court on Wednesday ordered the November ballot purged of an initiative that seeks to split California into three states, citing significant questions raised about the proposal’s validity. State election officials certified last month that supporters of the so-called Cal3 measure, also known as Proposition 9, had collected enough signatures to qualify it for the ballot in the country’s most populous state. An environmental group, the Planning and Conservation League, challenged the measure in court, arguing it posed a “revision” of the state constitution – as opposed to an amendment – that is too sweeping to be legally subjected to the direct consent of the voters.

Siding with opponents for the time being, the court directed state election officials to keep the measure off the upcoming November ballot to allow the justices sufficient time to review and decide the merits of the case. The court left open the possibility of allowing the initiative to be put before voters in the future, saying the “potential harm in permitting the measure to remain on the ballot outweighs” the harm of its delay. The initiative was launched by billionaire Silicon Valley venture capitalist Tim Draper, who has argued that California’s size makes it ungovernable. He failed in two previous bids to qualify a six-way split of California for the ballot.

Nudging.

• The Cashless Society Is A Con – And Big Finance Is Behind It (G.)

All over the western world banks are shutting down cash machines and branches. They are trying to push you into using their digital payments and digital banking infrastructure. Just like Google wants everyone to access and navigate the broader internet via its privately controlled search portal, so financial institutions want everyone to access and navigate the broader economy through their systems. Another aim is to cut costs in order to boost profits. Branches require staff. Replacing them with standardised self-service apps allows the senior managers of financial institutions to directly control and monitor interactions with customers. Banks, of course, tell us a different story about why they do this.

I recently got a letter from my bank telling me that they are shutting down local branches because “customers are turning to digital”, and they are thus “responding to changing customer preferences”. I am one of the customers they are referring to, but I never asked them to shut down the branches. There is a feedback loop going on here. In closing down their branches, or withdrawing their cash machines, they make it harder for me to use those services. I am much more likely to “choose” a digital option if the banks deliberately make it harder for me to choose a non-digital option. In behavioural economics this is referred to as “nudging”. If a powerful institution wants to make people choose a certain thing, the best strategy is to make it difficult to choose the alternative.

We can illustrate this with the example of self-checkout tills at supermarkets. The underlying agenda is to replace checkout staff with self-service machines to cut costs. But supermarkets have to convince their customers. They thus initially present self-checkout as a convenient alternative. When some people then use that alternative, the supermarket can cite that as evidence of a change in customer behaviour, which they then use to justify a reduction in checkout employees. This in turn makes it more inconvenient to use the checkout staff, which in turn makes customers more likely to use the machines. They slowly wean you off staff, and “nudge” you towards self-service.

Looks like a good story. But is it?

• The Most Unbelievable Tax Break Ever (F.)

Success Street in North Charleston, South Carolina, might be the most misnamed place in America, a path through a weedy, desolate neighborhood with 20% unemployment and a 40% poverty rate. Its biggest claim to fame strolls past the gritty brick apartment buildings and tumbledown bungalows on a muggy morning in late June: Timothy Scott, a local product who grew up to become the first black Republican U.S. senator in more than three decades. Joining Scott is another success story: the frenetic, peripatetic tech billionaire Sean Parker, who flew in by private jet from Los Angeles’ ritzy Holmby Hills for a personal tour of the senator’s hometown.

“I remember so many kids with amazing potential who died on the vine,” Scott says as he surveys the shuttered Chicora Elementary School, where weeds climb the walls and graying plywood shields shattered windows. “The frustration, irritation and low expectations were so pervasive here that I always wanted to make a difference.” He now may get his chance. Today’s visit is less a grim walk down memory lane than a legislative victory lap for Scott and Parker. The unlikely pair are core members of an even more unlikely group of conservatives and liberals, capitalists and philanthropists, U.S. lawmakers and small-town mayors who have successfully created one of the greatest tax-avoidance opportunities in American history, in the service of underperforming American cities and neighborhoods.

For all the focus on drastic tax-rate cuts, the fate of the state and local tax deduction and the exploding federal deficits, it’s the least-known part of last year’s tax-cut law that could be the most consequential. Officially called the Investing in Opportunity Act, it promises to pump a massive amount of cash into America’s most impoverished communities by offering wealthy investors and corporations a chance to erase their tax obligations. [..] The heart of this new law: Opportunity Zones, or “O-zones,” low-income areas designated by each state. Investors will soon be able to plow recently realized capital gains into projects or companies based there, slowly erase the tax obligations on a portion of those gains and, more significantly, have those proceeds grow tax-free. There are almost no limits.

Debt Rattle June 9 2018

Jun 092018

June 9, 2018 Posted by Raúl Ilargi Meijer at 8:16 am Finance Tagged with: discontent, Facebook, G7, house-rich, Juggernaut, marijuana, overvalued, overwhelmed, plastics, Skripal, Trump 5 Responses »

Edward Hopper Summertime 1943

• Why Trump Is Targeting G-7 Nations On Trade (MW)

• More Than Half Of American Homes Are Overvalued, CoreLogic Warns (ZH)

• America Is House-Rich But Cash-Poor (MW)

• Cities Struggle To Fend Off “Unstoppable Juggernaut” Of Chinese Homebuyers (ZH)

• The Summer of Discontent (Jim Kunstler)

• Facebook Shared Sensitive User Info Via “Secretive” Data Deals (ZH)

• Canada First G7 Nation To Make Marijuana Legal (G.)

• Trump Voices Support For Bipartisan Pot Legislation (Pol.)

• 7 In 10 Americans Are Overwhelmed By News, More Among Republicans (ZH)

• Berlin Still Has ‘No Evidence’ From UK That Moscow Is Behind Skripal Case (RT)

• Tourists To Med Told To Ditch Plastic To Avoid Huge Rise In Beach Litter (G.)

• Microplastics In Our Mussels: The Sea Is Feeding Human Garbage Back To Us (G.)

Deficits and reserve currencies. Joined at the hip.

• Why Trump Is Targeting G-7 Nations On Trade (MW)

President Trump has threatened Canada and France with higher tariffs if they don’t ease up on what he considers unfair policies, sparking fresh worries that a simmering dispute over trade will boil over and damage the world’s leading economies. The president clashed with Canadian Prime Minister Justin Trudeau and French President Emmanuel Macron in an extraordinary series of tweets ahead of meeting of G-7 leaders in Quebec. The G-7 consists of the U.S., U.K., Canada, France, Germany, Japan and Italy. The U.S. has run huge trade deficits for years through both Republican and Democratic presidents. In 2017, the trade gap in goods rose to a nine-year high of $807 billion (the deficit was a smaller $552 billion if services are included).

China accounted for 47% of the U.S. trade deficit in goods in 2017, but the G-7 countries were responsible for another quarter. Germany ran the biggest trade surplus with the U.S., followed by Japan and Italy. The U.S. runs smaller deficits in goods with France and Canada, according to government figures. The U.S. actually posted a small surplus with Canada in 2017 if services are included, largely reflecting how much Canadians spend when visiting the 50 states. The U.K. is the only country with which the U.S. ran a goods and overall surplus.

Long time pal Jesse Colombo posted this on Twitter. I wrote back:

“Sorry, my friend Jesse, but every single US home is overvalued. It just depends on the vantage point you look from. All prices have been distorted by the Fed’s policies, not just half of them. Arguably some more than others, but can that be the core argument here?”

• More Than Half Of American Homes Are Overvalued, CoreLogic Warns (ZH)

A history of economic cycles dating back to the mid-1800s reveals a troubling outlook for today’s Central Bank induced bull market of hopes and dreams, which could be in the later innings. It is quite evident that Americans have quit saving as their gig-economy jobs have left them in financial ruin – now being squeezed by the higher cost of living. The charades of economic stability could continue for a little longer, with President Trump’s stealth quantitative easing program to Wall Street via debt-financed tax reform, which has induced a massive wave of more than $2.5 trillion in stock buybacks — a gift to corporate America.

No matter where one looks, the valuation of many financial assets are overextended, and new evidence today from CoreLogicshows this troubling picture very late into an economic cycle: More than half of U.S. residential real estate markets were overvalued in April. CoreLogic reports that residential real estate prices nationwide increased 6.9% year over year from April 2017 to April 2018. The firm’s Home Price Index (HPI) also shows a 1.2% rise on the month-over-month basis from March to April 2018. This has certainly sparked the debate of housing affordability across the nation with many millennials struggling to achieve the American dream.

CoreLogic Market Condition Indicators showed that 40% of the 100 largest metropolitan areas were overvalued in April, compared to 28% undervalued, and 32% in line with valuations. The report uncovers a shocking discovery that of the nation’s top 50 largest residential real estate markets, 52% were overvalued in April.

Since they’re all overvalued, any talk of house-rich is shaky.

• America Is House-Rich But Cash-Poor (MW)

The very same day Lindsay learned he wouldn’t qualify for a refinance, help arrived. It was a direct mail solicitation, in the form of a fake check “payable to Michael Lindsay for $186,000.” A company called Unison was offering money in exchange for an ownership stake in the Lindsay house. Lindsay investigated, and found Unison’s process both “professional” and “informative,” he said. “It had come down to the fact that the only other option I had was to sell the house,” Lindsay told MarketWatch. He hated that idea, since his two boys, who’d already been through so much, were thriving in their school district. And while he didn’t want to rule out downsizing, there was just too much emotion attached to the home where the boys had been born, where he and Vanessa had tracked their growth through pencil marks in the garage.

Ultimately, Lindsay said, “It just felt crazy that there was so much equity in the home and I couldn’t get at it.” He signed on with Unison. After just three weeks, the company had dispersed $200,000 in cash to pay off Lindsay’s creditors and allow him to do much-needed deferred maintenance on the house. Unison’s product, which it calls HomeOwner, has been around for years, but it’s really hit its stride in the past year or so. The housing market has not only recovered from the Great Recession, it’s heated up. According to an analysis from Attom Data, nearly 14 million Americans are now “equity rich” – meaning they have at least 50% equity in their homes. It bears repeating that many owners and communities are not so lucky: over a million Americans are underwater, and some cities and towns are still reeling under the weight of abandoned and vacant homes and stagnant micro-economies.

But for most of the country, rapidly rising home prices and a dearth of anything else to buy means people are staying in their homes longer, allowing them to accrue more and more equity: $15 trillion worth, to be exact. That may sound like a first-world problem, but as Lindsay’s example illustrates, all the equity in the world is worthless if it’s locked in an untouchable asset while medical bills, home improvement costs, and other expenses are mounting. And since home equity is usually most concentrated among those who’ve lived in their homes the longest, that’s often retirees – the people most in need of certain cash flow.

Central banks and Chinese buyers.

• Cities Struggle To Fend Off “Unstoppable Juggernaut” Of Chinese Homebuyers (ZH)

As we’ve pointed out time and time again, foreign – mainly Chinese – buyers seeking to park their ill-gotten gains beyond the reach of the Communist Party have – in addition to global capitals like New York City and London – favored a handful of cities in the Pacific Northwest, as well as Australia and New Zealand. Many of these cities – for example, Vancouver – have seen property values rise to levels that are unaffordable for local buyers. While the influx of capital helped fuel an economic recovery in the aftermath of the crisis, home values soon reached crisis levels that demanded action by local officials. Some places have tried to use taxes to deter foreign buyers. In some instances, the taxes worked – at least temporarily.

But with the flow of buyers refusing to slow despite efforts by the Chinese government to stop money moving offshore, many of these cities are getting desperate. And after years of occasional headlines, it appears the crisis has finally become dire enough for the mainstream press to start paying attention. To wit, government officials in Canada and Australia who spoke with the Wall Street Journal for a story about how Chinese homebuyers expressed concern that widespread foreign ownership has created bubbles in local real-estate markets. Even as Australia and New Zealand and some Canadian cities have raised taxes on foreign buyers, many are worried that home values will continue to climb, foiling policy makers best efforts to control them.

Since it passed an 8% foreign buyers tax last summer, Sydney says foreign buying hasn’t let up. Jon Ellis, chief executive of Investorist, an online portal for cross-border property transactions, said Chinese property buyers are an “unstoppable juggernaut”. In some markets with large Mandarin-speaking populations, locals can spot real-estate ads in Mandarin at bus stations and benches in the surrounding area. In response, Vancouver imposed a 15% foreign buyers tax back in 2016. When that didn’t work, city officials worked with the province on something more aggressive.

“We’ll be fortunate if we can turn out brooms and scythes twenty years from now, let alone flying Teslas.”

• The Summer of Discontent (Jim Kunstler)

The ill-feeling among leaders of the G-7 nations — essentially, the West plus Japan — was mirrored early this morning in the puking financial market futures, so odious, apparently, is the presence of America’s Golden Golem of Greatness at the Quebec meet-up of First World poobahs. It’s hard to blame them. The GGG refuses to play nice in the sandbox of the old order. Like many observers here in the USA, I can’t tell exactly whether Donald Trump is out of his mind or justifiably blowing up out-of-date relationships and conventions in a world that is desperately seeking a new disposition of things. The West had a mighty good run in the decades since the fiascos of the mid-20th century. My guess is that we’re witnessing a slow-burning panic over the impossibility of maintaining the enviable standard of living we’ve all enjoyed.

All the jabber is about trade and obstacles to trade, but the real action probably emanates from the energy sector, especially oil. The G-7 nations are nothing without it, and the supply is getting sketchy at the margins in a way that probably and rightfully scares them. I’d suppose, for instance, that the recent run-up in oil prices from $40-a barrel to nearly $80 has had the usual effect of dampening economic activity worldwide. For some odd reason, the media doesn’t pay attention to any of that. But it’s become virtually an axiom that oil over $75-a-barrel smashes economies while oil under $75-a-barrel crushes oil companies.

[..] There is also surprisingly little critical commentary on the notion that Mr. Trump is seeking to “re-industrialize” America. It’s perhaps an understandable wish to return to the magical prosperity of yesteryear. But things have changed. And if wishes were fishes, the state of the earth’s oceans is chastening to enough to give you the heebie-jeebies. Anyway, we’re not going back to the Detroit of 1957. We’ll be fortunate if we can turn out brooms and scythes twenty years from now, let alone flying Teslas. This will be the summer of discontent for the West especially. The fact that populism is still a rising force among these nations is a clue of broad public skepticism about maintaining the current order. No wonder the massive bureaucracies vested in that order are freaking out. I’m not sure Mr. Trump even knows or appreciates just how he represents these dangerous dynamics.

Since this is their business model, period, it’s time to stop them.

• Facebook Shared Sensitive User Info Via “Secretive” Data Deals (ZH)

If you feel like there’s been a new embarrassing revelation about Facebook’s privacy practices every day this week, well, you’re not entirely wrong. In the third bombshell report to drop since Moday, the Wall Street Journal is reporting that Facebook struck customized data-sharing deals with a select group of companies, granting several of them special access to user records well after the point in 2015 when Facebook said it had shifted its privacy policies in response to learning that a researcher had improperly taken Facebook user data and sold it to Cambridge Analytica. The unreported agreements were known internally as whitelists.

They reportedly allowed certain companies to access sensitive information like phone numbers and a metric called “friend that measured the degree of closeness between users and others in their network,” the people said. The whitelist deals were struck with companies as diverse as Nissan and RBC Capital. The deals represented Facebook bending over backwards to allow special data access to a broader universe of companies, many of whom were valuable advertisers. Others needed the access to wind down unfinished projects after the new developer regulations. But some were granted the special access for “unspecified reasons” that WSJ apparently couldn’t crack.

WSJ also raises further questions about who had access to the data of billions of Facebook users and why they had access – and, what’s more, why didn’t Mark Zuckerberg mention any of this during the Congressional hearings? Facebook said companies were granted this special access as something of a workaround after Facebook stopped granting unfettered access to developers in 2015. Many of the details published in the report appeared vague – for example, WSJ couldn’t pin down how many Facebook clients had been granted this privilege. Perhaps that’s why they published it after 4 pm Eastern on a June Friday.

Pot and opioids. Many more questions than answers.

• Canada First G7 Nation To Make Marijuana Legal (G.)

Even places that have already taken the legalization plunge are hoping Canada will solve some mysteries. After Colorado legalized marijuana five years ago, for example, organized crime reacted by ramping up supplies of “black tar heroin, opiates and harder drugs”, said Dr Larry Wolk, the state’s top public health official. But Wolk says he is interested to watch that process unfold on a bigger scale in Canada, where the new law is expected to deal a much more significant blow to the black market. Any new mix of illicit drugs in the country could have new effects on public health. “What’s the impact of marijuana legalization on the opioid crisis?” he asked as an example.

“Does it actually act as a substitute so that people can get off opiates for chronic pain? Is there a positive impact? Or is it a negative impact, because as a result there’s more opiates in the black market? Is [pot] a gateway? We don’t really have an answer.” One delicate balance for Canadian authorities has been guessing at what kind of pricing will be low enough to eradicate illicit sales – yet not so low as to entice new users. Canada’s finance minister, Bill Morneau, recently said the goal is “keeping cannabis out of the hands of kids and out of the black market. That means keeping the taxes low so we can actually get rid of the criminals in the system”.

The end of Sessions as AG? We’ll take it. While thinking about all the young black kids whose lives have been screwed for small amounts of pot.

• Trump Voices Support For Bipartisan Pot Legislation (Pol.)

President Donald Trump said Friday he “probably will end up supporting” bipartisan legislation to bar the federal government from interfering with marijuana legalization laws at the state level, putting him at odds with efforts by his own Justice Department to crack down on the substance nationwide. The bill, unveiled by Sens. Cory Gardner of (R-Colo.) and Elizabeth Warren (D-Mass.), lawmakers of two states that have voted to legalize certain types of pot use, would in effect give states the right to determine their own approach to regulating the drug.

Pressed on whether he supports the measure while addressing reporters outside the White House on Friday, the president said he supports it now and will “probably” support it going forward. “I really do. I support Senator Gardner,” Trump said of the lawmaker’s bill. “I know exactly what he’s doing, we’re looking at it. But I probably will end up supporting that, yes.” The remarks stand in contrast to the actions of his own Justice Department, which under the direction of Attorney General Jeff Sessions has moved aggressively to crack down on the proliferation of laws to decriminalize and legalize cannabis.

The less news people read, the more exhausted they are?!

• 7 In 10 Americans Are Overwhelmed By News, More Among Republicans (ZH)

In a period in which most Americans feel mentally exhausted by news flow — from Facebook’s trending stories to Twitter’s hashtags to Trump’s spontaneous tweeting — and of course, how could we not forget, the mainstream media’s constant barrage of very fake news, approximately 70% of Americans feel “overwhelmed by the amount of news there is,” according to a Pew Research Center survey conducted from Feb. 22 to March 04, 2018. Nearly 68% of Americans feel mentally exhausted by the high-rate of news in the modern era, compared with just 30% of Americans who enjoyed the amount of news they get.

Pew said today’s “feelings of information overload” is similar to how Americans felt during the 2016 presidential election. While it certainly seems like Americans are consuming too much media, Republicans are experiencing more news fatigue than anyone else. Roughly 77% of Republicans and Republican-leaning independents are mentally drained from the constant bombardment of news headlines, compared with just 61% of Democrats and Democratic-leaning independents, said Pew. The report detailed that avid news watchers were less likely to experience mental fatigue than those who sparingly read headlines. For those who chase headlines “most of the time,” 62% reported psychological exhaustion, meanwhile, 78% of those who less frequently get news say they are overwhelmed.

The human brain which created this modern world is just not wired to process the vast amounts of information from news networks and social media. Americans are sleepwalking into a period of too much stimulation in tense periods, which could result in irrational decision making. America is stressed — its people are stressed — and there is just too much damn news. What could go wrong from here?

That’s a surprise…NOT.

• Berlin Still Has ‘No Evidence’ From UK That Moscow Is Behind Skripal Case (RT)

The German government has zero evidence from the British authorities that could back London’s claims that Moscow was behind the poisoning of the Skripals, German media reports. More than three months since the start of the probe into the poisoning of former Russian double agent Sergei Skripal and his daughter Yulia, the UK is still conspicuously tight-lipped when it comes to any real evidence that could prove its accusations against Russia. On Wednesday, the German government informed a parliamentary oversight committee during a closed hearing that it still has not received any evidence suggesting that Russia might well be behind the incident that took place in early March, German TV station RBB reports.

“It is [still] only known that the poison used in the attack was a nerve agent called Novichok, which was once produced in the Soviet Union,” Michael Goetschenberg, a correspondent of German ARD and an expert on security services, told RBB, commenting on the results of the hearing, which he is familiar with. Apart from this information, which was released by the British authorities soon after the incident, no new data on Russia’s alleged implication in this case was provided to Germany so far, he added. German intelligence has also found no Russian trace in this case so far, Goetschenberg said. “The BND, Germany’s foreign intelligence… has also contacted its own sources and tried to verify the information [about Russia’s potential involvement] in some way,” he told RBB, adding that it eventually failed to find any evidence pointing to Moscow as well.

Following the poisoning, which London blamed on Moscow using the now infamous wording “highly likely,” the UK and its allies expelled dozens of Russian diplomats, with Moscow giving a mirror response. Russia has categorically denied any involvement, and has complained that the victims were not allowed visits by Russian lawyers and diplomats, and the results of the investigation were kept secret. The Russian envoy to the UK has on several occasions alleged that London was even trying to “destroy” evidence in the probe.

It is very easy for governments to simply ban the stuff. But for some reason they don’t. Selling the stuff and then asking people not to use it seems Kafkaesque. At best.

• Tourists To Med Told To Ditch Plastic To Avoid Huge Rise In Beach Litter (G.)

Tourists are being urged to reduce their use of plastic as new figures reveal holidaymakers cause a 40% spike in marine litter in the Mediterranean each summer. Nearly all the waste created by the surge in tourism over the summer months in countries like Italy, France and Turkey is plastic litter, says WWF in a new report. In a matter of weeks over the holiday season the rise in plastic marine pollution contributes to the estimated 150m tonnes of plastic in the ocean. WWF said in its report the majority of plastic waste polluting the Mediterranean Sea comes from Turkey and Spain, followed by Italy, Egypt and France – countries to which more than 34 million British holidaymakers are preparing to travel this year.

Tanya Steele, chief executive of WWF, said holidaymakers were leaving behind a toxic legacy of plastic waste. “The birds, fish and turtles of the Mediterranean are choking on plastic … plastic is ending up in the fish and seafood we eat on holiday. “We’re asking people to think about how they can cut down on the amount of single-use plastic they use and throw away on holiday,” she said. Steele urges holidaymakers to drink tap water where it is safe to do so, refuse plastic straws and skip the purchase of inflatable pool toys. “We can all be part of the solution and not the problem,” she said. In Europe plastics account for 95% of the waste in the open sea, posing a major threat to marine life, says WWF.

After China, Europe is the second largest producer of plastic in the world, producing 27m tonnes of plastic waste. The continent dumps up to an estimated 500,000 tonnes of macroplastics and 130,000 tonnes of microplastics in the sea every year, the report says. But delays and gaps in plastic waste management in most Mediterranean countries mean only a third of the 60m tonnes of plastic produced is recycled. Half of all plastic waste in Italy, France and Spain ends up in landfills. Home to almost 25,000 plant and animal species – of which 60% are unique to the region – the Mediterranean holds only 1% of the world’s water but contains 7% of all of the world’s microplastic waste. Plastics have also been found in oysters and mussels, while crisp packets and cigarettes have been found in large fish, WWF says.

“Shakespeare’s Ariel looked down into the ocean and saw “something rich and strange”; we look down and see our consuming society reflected back at us.”

• Microplastics In Our Mussels: The Sea Is Feeding Human Garbage Back To Us (G.)

Shellfish are the natural filter systems of our seas, mechanisms of purity. So, to discover in a report released on World Oceans Day that mussels bought from UK supermarkets were infested with microplastic seems like a final irony in the terrible story of the plasticisation of the sea. According to the study by the University of Hull and Brunel University London, 70 particles of microplastic were found in every 100 grams of mussels. There’s a vital disconnection here – highlighted by the bottled water you drink to wash down your moules-frites, and the fact that 89% of ocean trash comes from single-use plastic. No sea is immune from this plague, nor any ocean creature, from the modest mussel or zooplankton to the great whales.

I have just returned from Cape Cod, where, due to pollution and other anthropogenic effects, the North Atlantic right whale may be extinct by 2040 – a huge mammal about to vanish from the sight of the shores of the richest, most powerful nation on Earth. On the pristine, remote Cisco Beach on Nantucket, I watched a grey seal watching me – only to realise the sleek pelage of its midriff was bound with an orange plastic bag. Last month, off St Ives in Cornwall, I saw a cormorant tugging helplessly at a monofilament of fishing line that had trussed its bill to its arched neck. The underwater photographer Andrew Sutton sends a selfie from Costa Rica: he is holding miles of illegal plastic long line, tangled like a grotesque bouquet.

From Sri Lanka to the Mediterranean, our summer holiday idylls become places of mortality. That we cannot look underneath what Herman Melville called “the ocean’s skin” is part of the problem. It is as if, defeated by the sea’s mystery, we punish it for defying our dominion. And so, it wreaks its revenge, feeding our own rubbish back to us. Shakespeare’s Ariel looked down into the ocean and saw “something rich and strange”; we look down and see our consuming society reflected back at us.

Have We All Been Silenced?

May 182018

May 18, 2018 Posted by Raúl Ilargi Meijer at 1:50 pm Finance Tagged with: Assange, Catalunya, Ecuador, Guardian, innuendo, insinuations, journalism, Russia, Skripal, Spain, submission 4 Responses »

Leonard Misonne Waterloo Place, London 1899

Let me start by saying I have nothing against the English newspaper The Guardian. They publish some good things, on a wide range of topics. But they also produce some real stinkers. And lately they seem to publish quite a few of those. On Wednesday there was an entire series of hit pieces on Julian Assange, which I wrote about in I Am Julian Assange.

And apparently they’re not done. As I said on Wednesday, the relationship between Assange and the paper has cooled considerably, after The Guardian’s initial cooperation with Wikileaks on files Assange had shared with them. But does that excuse hit pieces, personal attacks, innuendo, suggestive and tendentious writing, in bulk?

There was one more article in the hit pieces series on Wednesday:

Assange ‘Split’ Ecuador And Spain Over Catalan Independence

Julian Assange’s intervention on Catalan independence created a rift between the WikiLeaks founder and the Ecuadorian government, which has hosted Assange for nearly six years in its London embassy, the Guardian has learned. Sources who spoke on condition of anonymity said Assange’s support for the separatists, including a meeting in November, led to a backlash from Spain, which in turn caused deep concern within Ecuador’s government. While Assange’s role in the US presidential election has been an intense focus of US prosecutors, his involvement in Spanish politics appears to have caused Ecuador the most pain.

The Ecuadorians cut Assange’s internet connection and ended his access to visitors on 28 March, saying he had breached an agreement at the end of last year not to issue messages that might interfere with other states. Quito has been looking to find a solution to what it increasingly sees as an untenable situation: hosting one of the world’s most wanted men.

In November 2017, Assange hosted two supporters of the Catalan independence movement, whose push for secession from Spain had plunged the country into its worst political crisis since returning to democracy. Assange has said he supported the right to “self-determination” and argued against “repression” from Madrid.

He was visited by Oriol Soler, a Catalan businessman and publisher, and Arnau Grinyó, an expert in online communications campaigns. Their meeting, which was reported by the Spanish press, took place a little over a month after the unilateral Catalan independence referendum, and 13 days after the Spanish government responded to the unilateral declaration of independence by sacking the administration of the then Catalan president, Carles Puigdemont, and assuming direct control of the region.

I think that’s we call ‘leading’. Terminology like “..Assange’s role in the US presidential election..”, “..one of the world’s most wanted men..”, “..unilateral referendum..”, “..unilateral declaration of independence..”, are suggestive, they are meant to paint a picture in the reader’s head. What’s missing is any and all mention of the brutal violence in Catalunya on referendum day. That, too, has a purpose.

Assange has been a vocal critic of Madrid’s handling of the Catalan crisis and described the independence movement as “the redefinition of the relationship between people and state”, and “the most disciplined Gandhian project since Gandhi”. A Spanish diplomat told the Guardian that Spain “conveyed a message” to Ecuadorian authorities that Assange was using social media to support the secessionist movement and sending out messages “that are at odds with reality”.

A billion people have been critics of what happened around the referendum. So why not Assange? For what reason did he need to be shut up? Everyone can speak their mind, but not him? We no longer have freedom of speech? Isn’t that something a newspaper, most of all, first of all, should stand up for? An embassy of a democratic nation? No, not a word.

[..] “Spain has, on a number of occasions, informed the Ecuadorian authorities of its concerns over the activities that Julian Assange has engaged in while in the Ecuadorian embassy in London.” [..]In December, Ecuador’s president, Lenín Moreno, reminded Assange that he should refrain from trying to intervene in Ecuadorian politics.

US intelligence agencies and Spanish authorities have separately claimed that Russia has had a hand in their domestic affairs. US agencies have accused WikiLeaks of working with Russian intelligence to try to disrupt the US election by releasing hacked emails from Hillary Clinton’s 2016 presidential campaign, and Spanish officials have suggested that much of the messaging on social media about the Catalan crisis originated in Russia.

Obviously, Assange has never interfered in Ecuadorian politics. That’s just utter nonsense. But that last bit takes the cherry. There is no proven link between Assange and Russia. There is no proven link between Russia and US elections. There is no proven link between Russia and hacked emails. There is no proof the emails were hacked. And as for Russia interfering in the Catalan referendum: oh, please.

Is this just very very bad journalism, or is it something more? You be the judge. But beware that almost all of this stuff consists of insinuations. It’s an affront to journalism.

Glenn Greenwald interviewed Former Ecuadorian President Rafael Correa after the Guardian pieces came out:

Ecuador’s Ex-President Denounces Treatment of Julian Assange as “Torture”

Former Ecuadorian President Rafael Correa, in an exclusive interview with The Intercept on Wednesday morning, denounced his country’s current government for blocking Julian Assange from receiving visitors in its embassy in London as a form of “torture” and a violation of Ecuador’s duties to protect Assange’s safety and well-being. Correa said this took place in the context of Ecuador no longer maintaining “normal sovereign relations with the American government — just submission.”

Correa also responded to a widely discussed Guardian article yesterday, which claimed that “Ecuador bankrolled a multimillion-dollar spy operation to protect and support Julian Assange in its central London embassy.” The former president mocked the story as highly “sensationalistic,” accusing The Guardian of seeking to depict routine and modest embassy security measures as something scandalous or unusual.

[..] Correa continues to believe that asylum for Assange is not only legally valid, but also obligatory. “We don’t agree with everything Assange has done or what he says,” Correa said. “And we never wanted to impede the Swedish investigation. We said all along that he would go to Sweden immediately in exchange for a promise not to extradite him to the U.S., but they would never give that. And we knew they could have questioned him in our embassy, but they refused for years to do so.” The fault for the investigation not proceeding lies, he insists, with the Swedish and British governments.

But now that Assange has asylum, Correa is adamant that the current government is bound by domestic and international law to protect his well-being and safety. Correa was scathing in his denunciation of the treatment Assange is currently receiving, viewing it as a byproduct of Moreno’s inability or unwillingness to have Ecuador act like a sovereign and independent country.

Maybe we should suggest that somebody may have interfered in Ecuador’s presidential elections?! You know, to get to Assange?!

Then today we read in the Guardian that in the aftermath of its hit series, Ecuador has dismissed security for Assange. Is this when MI6 and the CIA get to move in?

Ecuador To Remove Julian Assange’s Extra Security From London Embassy

The president of Ecuador, Lenin Moreno, has ordered the withdrawal of additional security assigned to the Ecuadorian embassy in London, where WikiLeaks founder Julian Assange has remained for almost six years. The move was announced a day after an investigation by the Guardian and Focus Ecuador revealed the country had bankrolled a multimillion-dollar spy operation to protect and support Assange, employing an international security company and undercover agents to monitor his visitors, embassy staff and even the British police.

Over more than five years, Ecuador put at least $5m (£3.7m) into a secret intelligence budget that protected him while he had visits from Nigel Farage, members of European nationalist groups and individuals linked to the Kremlin.

[..] Ecuador suspended Assange’s communication systems in March after his pointed political comments on Twitter. Assange had tweeted messages challenging Britain’s accusation that Russia was responsible for the poisoning of a Russian former double agent and his daughter in Salisbury.

What? Ecuador muted Assange because he challenged Britain’s accusation -unfounded as far as we can tell- that Russia poisoned the Skripals? But wait. I thought they cut him off because of Spain? Or the US? Now it’s Britain? Everyone and their pet hamster is suspicious of that Skripal story. But again, Assange is not allowed to be?

Oh, and all the terrible, and terribly suspicious, people that came to see him. “Nationalists” and “individuals linked to the Kremlin.” Leading, suggestive, truly repugnant “journalism”.

But then, also today, that same Guardian gives the floor to Melinda Taylor, one of Assange’s lawyers. Do they think that giving her a voice makes up for all the damage they’ve done to Assange, to themselves, to freedom of speech and to journalism? One might be tempted to think so.

Julian Assange Is Suffering Needlessly. Why Not Report That?

Breaking news: a series of articles has been published by the Guardian concerning Julian Assange, splashed over the front pages. The big reveal? That after the UK threatened to invade the Ecuadorean embassy, Ecuador beefed up its security and surveillance at said embassy. And that this costs money. And there is pressure to find a solution to a situation that has been described by the United Nations as illegal and arbitrary detention.

Lost in the lede was this: that Ecuador appears to be hoping “that Assange’s already uncomfortable confinement will become intolerable”. The Oxford dictionary defines “intolerable” as “unbearable, insufferable, unsupportable, insupportable, unendurable, beyond endurance, unacceptable, impossible, more than flesh and blood can stand, too much to bear, past bearing, not to be borne, overpowering (…)”.

Isn’t the headline story that the editor-in-chief of WikiLeaks remains detained without access to fundamental healthcare? And since March this year, has been cut off from the outside world, bar meetings with his lawyers, which have apparently been surveilled?

Assange has won numerous awards for publishing information that has exposed egregious violations of human rights and abuses of state power. He has also won the more dubious prize of being placed in the crosshairs of US government attempts to silence free speech by silencing the publications and publishers that dare to speak freely.

And if only the ongoing Julian Assange tragedy was the only affront to news gathering. But no, there’s still always the Skripals. It looks like the gag order has been lifted. Yesterday, the Sun, which at least doesn’t pretend to be a quality paper, ran this:

Sergei Skripal Still Being Questioned Over Salisbury Nerve Agent Attack

Detectives are still questioning poisoned spy Sergei Skripal as he recovers in hospital, nearly 10 weeks after being attacked with a nerve agent, Sky News has learned. They are trying to piece together the Russian former double agent’s life in retirement in Britain, as more details emerged of his recent activities. They want to know more about his regular train journeys to London, his trips abroad, and his monthly meetings with his alleged former MI6 handler in a Salisbury restaurant. It was reported this week that the 66-year-old had been briefing intelligence agencies in the Czech Republic and Estonia on Russian spies and their methods, giving one lecture as recently as 2016.

Would that activity, years after arriving in Britain in a spy swap with Moscow, have been motive enough for the murder attempt on him and his daughter Yulia? The government insists the Kremlin was responsible for the attack, in which the deadly nerve agent novichok was smeared on the front door handle of Mr Skripal’s Salisbury home. But former KGB officer and espionage historian Alexander Vassiliev said it was more likely the work of the Russian mafia, out to embarrass Vladimir Putin’s regime.

Mr Vassiliev said: “It wasn’t the reason to kill him. I’m sure when Putin released him, and pardoned him, he knew Skripal would be co-operating with British secret services and other European espionage agencies. “All defectors are doing it, they work as consultants, they give lectures, they write books – it’s a normal thing. He had to earn his living somehow – he wouldn’t have been a taxi driver. “Skripal was arrested in 2004 – that was a long time ago and he didn’t know specific details about current objectives or operatives. The Russian government had no reason to kill Skripal – he was nobody and he wasn’t a danger.

Now, that’s funny. He’s been briefing Czech intelligence. The Czech Republic, we learned recently, is one of a group of countries that have the formula for novichok AND have produced small quantities of it. The “it could only have been Russia” narrative is, based on what we know, dead as a door handle.

That was yesterday. And lo and behold, this morning the Guardian writes that Skripal has been discharged from hospital. They got all the info they wanted out of him?

Sergei Skripal Discharged From Salisbury Hospital

The Russian ex-spy Sergei Skripal, who was exposed to a nerve agent, has been discharged from Salisbury district hospital, health officials have said. Skripal’s release follows that of his daughter, Yulia, and DS Nick Bailey, who were also exposed to novichok in March. The hospital said: “While these patients have now been discharged, their right to patient confidentiality remains and limits us from giving detailed accounts of the treatment these individuals received. “However, treating people who are so acutely unwell, having been poisoned by nerve agents, requires stabilising them, keeping them alive until their bodies could produce more enzymes to replace those that had been poisoned.”

Yup, we’re sticking with the ‘novichok from Russia’ story. We’re not going to provide any proof, you will have to believe us. I think that’s the frame we must see this last article in, easily one of the weirdest things I’ve read in a while. And again it’s from the Guardian. “As if” to emphasize the dark and massive threat that is hanging over Britain. Create an atmosphere, paint a picture. Julian Assange and the Russians (and Trump!) against Spain, the US and Britain, those staunch defenders of human rights and ‘our values’.

Almost 100 Police Have Received Psychological Help After Salisbury Attack

Almost 100 Wiltshire police officers and staff have sought psychological support after the nerve agent attack in Salisbury, the Guardian can reveal. Among those who have asked for help were officers who initially responded to the collapse of the former Russian spy Sergei Skripal and his daughter, Yulia, and those who were at or close to the various investigation sites in subsequent days and weeks. Some reported feeling disorientated and anxious while others were concerned about the possible long-term health effects on the public.

Wiltshire’s chief constable, Kier Pritchard, told the Guardian that officers – including himself and other police personnel continued to receive help more than two months after the attack. Pritchard took up the role of head of the force on the day of the attempted murders and said he had personally received the “best support” as he worked through the implications for him and his family of being a high-profile figure in the response to a state-sponsored attack.

One police officer, DS Nick Bailey, spent more than two weeks in hospital after being exposed to the novichok nerve agent and when he was discharged said life would never be the same again.

You know who might have helped us try to find out what really happened to the Skripals? Julian Assange. But he’s been silenced. Where do we turn now? How do we find the truth anymore? Have we effectively all been silenced?

Debt Rattle May 5 2018

May 052018

May 5, 2018 Posted by Raúl Ilargi Meijer at 9:11 am Finance Tagged with: Argentina, BLS, business cycle, China, gorilla, Monsanto, mortgage prisoners, Mueller, OPCW, recession, Skripal, Trump, unemployment 4 Responses »

Edgar Degas Landscape with Path Leading to a Copse of Trees 1890-92

• 40% Unemployment Ain’t Awesome (Stockman)

• The Next Recession Is Closer Than You Think (Cook)

• US Lays Down A List Of Trade Demands To China (CNBC)

• Theresa May Under Pressure To Ditch New Immigration Clampdown (Ind.)

• 150,000 UK ‘Mortgage Prisoners’ Need Help To Escape Expensive Deals (Ind.)

• Argentina Hikes Interest Rates To 40% Amid Inflation Crisis (Ind.)

• Judge In Manafort Case Rebukes Mueller For Exceeding Authority (G.)

• The Horsefly Cometh (Jim Kunstler)

• Chemical Weapons Watchdog Backtracks On ‘100g Of Novichok’ Claim (Ind. )

• Greek Unpaid Taxes Build Up Again As Taxpayers Are Unable To Pay (K.)

• Monsanto Appeals To India Supreme Court Over GMO Cotton Patents (R.)

• Congo To Drill For Oil In Parks Home To Endangered Mountain Gorilla (Ind.)

“..at some point it gets pretty hard to hide 16.6 million missing workers..”

• 40% Unemployment Ain’t Awesome (Stockman)

[..] the Awesome Economy narrative gets more threadbare by the month. As Jeff Snider astutely observed in his commentary on today’s report—at some point it gets pretty hard to hide 16.6 million missing workers. What he means is that if the labor force participation rate had not plunged from more than 67.0% to the 62.8% level reported again for April, there would be 16.6 million more persons employed in the US economy today at the ostensible 3.9% unemployment rate.

“Here in the United States, the Bureau of Labor Statistics (BLS) sends us another farce. These payroll Friday’s were always a little overwrought, but in the past four years they have become ridiculous spectacles. It’s not the fault of the BLS (apart from questions about their estimates for 2014), mainly it is the same issue as in Japan. What should be obvious is misinterpreted sometimes intentionally. According to the latest figures, the unemployment rate in the US is now down to 3.9%. The reason it crossed the 4% line in April was perfect. Not in the manner of what a 3.9% unemployment should indicate, rather it was all the wrong things that expose the unemployment rate for what it is – meaningless. The primary reason for its drop was another monthly subtraction from the labor force. Down for a second month in a row, in April by 236k, the HH Survey managed to increase by all of 3k. The result: a perfectly representative decline to 3.9%.”

The Keynesian gummers reject Snider’s point entirely, of course, on the vague theory that retirements and the aging demographics of the US explain away much of the change in the participation rate. As a matter of fact, they don’t. And, besides, the whole BLS employment/unemployment reporting framework and model is essentially a pile of garbage that might have been relevant during the days of your grandfather’s economy, if even then. That is, it is built on the flawed notion that labor inputs can be accurately measured by a unit called a “job” and that an economic trend in motion tends to stay in motion.

To the contrary, in today’s world labor is procured by the hour and by the gig—meaning that the “job” units counted in both the establishment and household surveys are a case of apples, oranges and cumquats. The household survey, for example, would count as equally “employed” a person holding: • a 10-hour per week gig with no benefits; • a worker holding three part-time jobs adding to less than 36 hours per week with some benefits; and • a 50-hour per week manufacturing job (with overtime) providing a cadillac style benefit package.

How about Kondratieff?

• The Next Recession Is Closer Than You Think (Cook)

Business cycles run for periods of years, not days, weeks, or months. So business cycle analysis is different from the common definition of market-timing because it is concerned with a much longer time horizon. It is difficult for anyone other than politicians to deny the existence of a business cycle, which includes both an expansion and a recession phase because they are a fact of economic life. A recent Goldman Sachs research piece not only acknowledges the existence of cycles but divides them into four phases and produces recommended asset allocations for each phase, as shown below.

Goldman’s investment recommendation for 2018 is based on the belief that 2018 lies within Phase 3, in which the economy is operating above capacity and growing. More broadly, Goldman’s chart and table show that identifying the Phases is a crucial determinant of investment success. For example, if 2018 truly lies within Phase 4, cash and bonds would outperform commodities and equities. \The Fed appears to agree with Goldman’s analysis of Phase 3, based on its simultaneous campaigns to lift the Fed Funds rate and to reduce the size of its bond holdings that were acquired during its QE experiment. In another admission that business cycles exist, Bank of America/Merrill Lynch (BAML) produces a monthly Fund Manager Survey, in which it asks the largest institutional investment managers a simple question; where are we in the business cycle?

[..] The BAML survey extends further back than 2008, so we can get a better idea of investors’ beliefs leading to the recession of 2008-09, as shown below. During these years, investors were given two other choices to describe the economy; early-cycle or recession. A majority of investors believed the economy was late-cycle beginning in 2005, with a peak in that belief occurring in late 2007 (thin black line), which coincided with a continuous decline in the percentage believing the economy was mid-cycle. During the period 2005-2007, almost no investors believed that the economy was in either in its early-cycle or recession.

China is negotiating.

• US Lays Down A List Of Trade Demands To China (CNBC)

The U.S. stands ready to impose further trade tariffs on Chinese products if Beijing walks away from agreed-upon commitments, according to a reporter at the Wall Street Journal. Trade representatives from the U.S. and China entered a second day of trade discussions on Friday, as the world’s two largest economies sought to find a way to stave off global concerns of a full-blown trade war. The discussions, led by Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He, are expected to cover a wide range of U.S. complaints about alleged unfair trade practices in Beijing. A major breakthrough deal to fundamentally change China’s economic stance was widely viewed as highly unlikely.

In a tweet posted Friday, Lingling Wei, a China economics correspondent at the Wall Street Journal, said the U.S asked China to reduce its trade surplus by at least $200 billion by year-end 2020, citing a document issued to the Chinese before the talks. President Donald Trump has often called on China to reduce its bilateral trade deficit by $100 billion a year. The U.S. trade envoy also wanted China not to target U.S. farmers and agricultural products and sought assurances from the Asian giant that it would not retaliate over restrictions on investments from Beijing, Wei said.

The entire British press seems set on ignoring Labour’s win. Which, true enough, isn’t big enough.

• Theresa May Under Pressure To Ditch New Immigration Clampdown (Ind.)

Theresa May is under mounting pressure to ditch a fresh immigration clampdown dubbed “the next Windrush”, ahead of a crucial Commons vote next week. Thirty-four organisations have joined forces to urge the prime minister not to repeat the blunders that sparked the scandal by preventing other immigrants from proving their right to be in the UK. Under planned new data laws, people will be denied access to the personal information the government holds about them if releasing it would “undermine immigration control”. Leading lawyers have warned that withholding potentially vital proof would lead to people being wrongly deported, detained or denied health treatment – in a mirror image of the treatment of the Windrush generation.

On Wednesday, Labour and the Liberal Democrats will join forces to try to throw out the exemption, arguing it is the “first test” of Ms May’s promise to learn the lessons of the Windrush debacle. Now, the joint letter – seen by The Independent – brings together human rights campaigners, trade unions, migrant support groups and law firms to warn it will “foster fear within minority communities”. Unless halted, the plan will make it “near-impossible” to prevent the “disposing of information that could help people prove their right to reside in the UK – as it did with the Windrush landing cards”, they say. People would also avoid using essential public services “for fear that their medical or school records will be secretly passed to the Home Office”.

The lenders don’t own the loans anymore, they’ve been packaged and sold.

• 150,000 UK ‘Mortgage Prisoners’ Need Help To Escape Expensive Deals (Ind.)

Tens of thousands of people are “mortgage prisoners”, trapped on expensive deals and not allowed to switch, the financial regulator has said. The Financial Conduct Authority urged for more innovation to help around 150,000 people who signed up for deals before interest rates plummeted after the financial crisis. They have since been switched to more expensive “reversion rates” once their previous deal expired and are unable to switch because they do not meet stricter affordability rules which have been brought in. Christopher Woolard, director of strategy and competition at the FCA, said: “For many, the market is working well, with high levels of consumer engagement. “However, we believe that things could work better with more innovative tools to help consumers.

“There are also a number of long-standing borrowers that have kept up-to-date with their mortgage repayments but are unable to get a new mortgage deal; we want to explore ways that we, and the industry, can help them.” The FCA said it will consider seeking an industry-wide agreement to approve applications from those who are affected and are up-to-date with payments. However, this will only help 30,000 people who are with authorised mortgage lenders. The remaining 120,000 are with firms who are not authorised to lend, often because the lender has sold on a batch of mortgages. These firms are outside the FCA’s remit, which is set by parliament, meaning new legislation would be required to enable the regulator take action.

“..large twin budget and current account deficits, a heavy dollar debt burden, entrenched high inflation and an overvalued currency..”

• Argentina Hikes Interest Rates To 40% Amid Inflation Crisis (Ind.)

Argentina has jacked up its interest rates to 40 per cent in a drastic attempt to keep a lid on domestic inflation and stabilise its currency. The Latin American country’s central bank announced the hike on Friday, the third in seven days, saying it would keep using the tools at its disposal to get inflation back down to it 15 per cent target. Inflation in the country is currently running at 25.4 per cent, despite the investor-friendly economic reforms of President Mauricio Macri. Argentina is one of several emerging market economies that have suffered from currency pressure in recent weeks as the US dollar has strengthened and foreign capital has been withdrawn.

“Investors are moving out of [emerging markets], frontier [economies], and other risky assets and so countries like Argentina remain at heightened risk,” said Win Thin of Brown Brothers Harriman. The value of the Argentinian peso has declined from 18.6 against the greenback in January to 23 this week. President Macri succeeded the Peronist Cristina Fernandez de Kirchner in 2015 and has been seeking to reverse her policies of protectionism and high government spending. “This crisis looks set to continue unless the government steps in to reassure investors that it will take more aggressive steps to fix Argentina’s economic vulnerabilities,” said Edward Glossop of Capital Economics.

“Risks to the peso have been brewing for a while – large twin budget and current account deficits, a heavy dollar debt burden, entrenched high inflation and an overvalued currency. The real surprise is how quickly and suddenly things seem to be escalating.”

“It’s unlikely you’re going to persuade me the special prosecutor has power to do anything he or she wants. ..”

• Judge In Manafort Case Rebukes Mueller For Exceeding Authority (G.)

A federal judge has rebuked the special counsel investigating alleged collusion between Trump aides and Russia, for overstepping his bounds in a criminal case against the president’s former campaign manager. Robert Mueller last year brought tax and bank fraud charges against Paul Manafort, the first indictment in the Russia investigation. Manafort maintains his innocence. On Friday TS Ellis, a judge in the eastern district of Virginia, suggested that Mueller’s real motivation for pursuing Manafort was to compel him to “sing” against Trump. “You don’t really care about Mr Manafort’s bank fraud,” the judge, reportedly losing his temper, challenged lawyers from the office of special counsel.

“You really care about getting information Mr Manafort can give you that would reflect on Mr Trump and lead to his prosecution or impeachment.” The comments, at a tense court hearing in Alexandria, were a boost for Manafort’s lawyers who contend that the charges against him are outside Mueller’s mandate to investigate Russian interference in the 2016 election. Ellis added: “I don’t see what relationship this indictment has with anything the special counsel is authorised to investigate. “We don’t want anyone in this country with unfettered power. It’s unlikely you’re going to persuade me the special prosecutor has power to do anything he or she wants. The American people feel pretty strongly that no one has unfettered power.”

[..] Ellis withheld ruling on dismissal of the indictment. He asked the special counsel’s office to share privately with him a copy of deputy attorney general Rod Rosentein’s August 2017 memo elaborating on the scope of Mueller’s Russia investigation. The current version has been heavily redacted, he said. Leaving the White House on his way to Texas on Friday, Trump claimed he would welcome an interview with Mueller. “So I would love to speak,” he told reporters. “I would love to go. Nothing I want to do more, because we did nothing wrong. We ran a great campaign. We won easily.” But he added: “I have to find that we’re going to be treated fairly, because everybody sees it now, and it is a pure witch-hunt. Right now, it’s a pure witch-hunt.”

The FBI is far from squeaky clean.

• The Horsefly Cometh (Jim Kunstler)

You can see where this Mueller thing is going: to the moment when the Golden Golem of Greatness finally swats down the political horsefly that has orbited his glittering brainpan for a whole year, and says, “There! It’s done.”

It suggests that Civil War Two will end up looking a whole lot more like the French Revolution than Civil War One. The latter unfurled as a solemn tragedy; the former as a Coen Brothers style opéra bouffe bloodbath. Having executed the presidential swat to said orbiting horsefly, Trump will try to turn his attention to the affairs of the nation, only to find that it is insolvent and teetering on the most destructive workout of bad debt the world has ever seen. And then his enemies will really go to work. In the process, they’ll probably wreck the institutional infrastructure needed to run a republic in constitutional democracy mode.

They got a good start in politicizing the upper ranks of the FBI, a fatal miscalculation based on the certainty of a Hillary win, which would have enabled the various schemers in the J. Edgar Hoover building to just fade back into the procedural woodwork of the agency and get on with life. Instead, their shenanigans were exposed and so far one key player, Deputy Director Andrew McCabe, was hung out to dry by a committee of his fellow agency execs for lying about his official conduct. Long about now, you kind of wonder: is that where it ends for him? Seems like everybody else (and his uncle) is getting indicted for lying to the FBI. How about Mr. McCabe, since that is exactly why his colleagues at the FBI fired him?

Perhaps further resolution of this murky situation awaits Inspector General Michael Horowitz’s forthcoming report, which the media seems to have forgotten about lately. An awful lot of the mischief at the FBI and its parent agency, the Department of Justice, is already on the public record, for instance the conflicting statements of Andrew McCabe and his former boss James Comey concerning who illegally leaked what to the press. On the face of it, it looks pretty bad when at least one of these Big Fish at the top of a supposedly incorruptible agency is lying. There are at least a dozen other Big Fish in there who still have some serious ‘splainin’ to do, and why not in the grand jury setting?

There goes the OPCWs credibility.

• Chemical Weapons Watchdog Backtracks On ‘100g Of Novichok’ Claim (Ind. )

The international chemical weapons watchdog has backtracked on a suggestion that as much as 100 grams of nerve agent may have been used in the poisoning of former Russian spy Sergei Skripal and his daughter Yulia. Ahmet Uzumcu, director general of the Organisation for the Prohibition of Chemical Weapons (OPCW), had said the relatively large quantities of novichok used suggested it had been created as a weapon rather than for research purposes. But a new OPCW statement said the organisation was not able to “estimate or determine the amount of the nerve agent that was used” in the incident. Mr Uzumcu had said samples collected suggested the nerve agent used to poison the Skripals was of “high purity”.

He said: “For research activities or protection you would need, for instance, five to 10 grams or so, but even in Salisbury it looks like they may have used more than that. “Without knowing the exact quantity, I am told it may be 50, 100 grams or so, which goes beyond research activities for protection. “It’s not affected by weather conditions. That explains, actually, that they were able to identify it after a considerable time lapse.” It came as Czech President Milos Zeman said his country had produced small quantities of novichok. Britain has argued the use of Novichok – which was developed by the former Soviet Union in the 1980s – meant there was no “plausible alternative” explanation other than the Russian state was behind the attack.

However Mr Zeman’s comments were seized on by President Vladimir Putin’s spokesman Dmitry Peskov, who said they were a “clear illustration of the groundless stance the British authorities have taken”.

And they want you to believe the economy is growing.

• Greek Unpaid Taxes Build Up Again As Taxpayers Are Unable To Pay (K.)

Concerns are growing in the Finance Ministry as expired debts to the tax authorities grew at an unexpectedly high rate in March – a month with no major obligations. Unpaid taxes came to 776 million euros in March, taking total new arrears to the state in the first quarter of the year to 3.55 billion euros. According to figures released on Friday by the tax administration, the sum of old and new debts to the state amounted to 101.6 billion euros at end-March. Out of the 3.55 billion created in Q1, 3.3 billion euros was in the form of unpaid taxes. Ministry officials argue that the increase in tax debts is due to the fact that many taxpayers missed the deadlines for them to pay installments as part of debt settlement programs concerning the revelation of previously undeclared incomes.

Other reasons cited are that taxpayers have failed to pay fines, as well as many individuals and enterprises having exhausted all means for paying taxes. If this situation continues in the following months, the hole in budget revenues will grow considerably, given that the submission process for income tax statements has just begun and the first tranche is payable by end-July. The state’s response to this phenomenon is confiscations, which in March alone numbered 21,275. This takes the sum of taxpayers who have suffered confiscations to 1,109,971, while the total number of Greeks owing to the state has risen to 3,907,847.

“..agricultural products, including seeds, cannot be patented in India..”

• Monsanto Appeals To India Supreme Court Over GMO Cotton Patents (R.)

Monsanto has appealed to the Supreme Court against a ruling by the Delhi High Court which decreed last month that the world’s biggest seed maker cannot claim patents on its genetically modified or GM cotton seeds, a company spokesman said on Friday. The Delhi High Court on April concurred with Indian seed company Nuziveedu Seeds Ltd (NSL), which argued that the Patent Act does not allow Monsanto any patent cover for its genetically modified cotton seeds. Monsanto has appealed to the Supreme Court, said a Monsanto India spokesman. “In the Supreme Court, we’ll maintain our stand that agricultural products, including seeds, cannot be patented in India,” said Narne Murali Krishna, a company secretary for NSL.

“The judgement of the Delhi High Court has already vindicated our stand.” New Delhi approved Monsanto’s GM cotton seed trait, the only lab-altered crop allowed in India, in 2003 and an upgraded variety in 2006, helping transform the country into the world’s top producer and second-largest exporter of the fibre. Monsanto’s GM cotton seed technology went on to dominate 90 percent of India’s cotton acreage. But for the past few years Monsanto has been at loggerheads with NSL, drawing in the Indian and US governments, Reuters revealed last year.

Gorilla’s, bonobos, dwarf chimpanzees, Congo peacocks and forest elephants…

• Congo To Drill For Oil In Parks Home To Endangered Mountain Gorilla (Ind.)

The Democratic Republic of Congo is planning to reclassify two protected national parks to allow oil exploration. Documents seen by The Independent show the government wants to redraw the boundaries of the Salonga and Virunga national parks, which are home to critically endangered species such as mountain gorillas, to remove protected status from certain areas. Both parks are UNESCO World Heritage sites, a status which in theory should protect them from oil exploration and other extractive activities. In a letter, Congo’s oil minister Aime Ngoi Muken invited the environment minister and the minister for scientific research to a special commission meeting to discuss the plans on 27 April.

Minutes and notes of the meeting give more details about the areas in which the Congolese government wants to allow exploration. In another series of letters seen by NGO Global Witness, Congo’s oil minister Ngoi Muken argued for the need to open up the protected sites for oil exploration and set out the legal procedures to do so. Global Witness said the plans would be a violation of the UNESCO World Heritage Convention to which the Democratic Republic of Congo is a signatory. The Virunga park is one of the most biologically diverse areas on the planet and is home to about a quarter of the world’s remaining mountain gorillas. According to UNESCO, the Salonga park is Africa’s largest tropical rainforest, home to many endangered species such as bonobos, dwarf chimpanzees, Congo peacocks and forest elephants.

Debt Rattle April 15 2018

Apr 152018

April 15, 2018 Posted by Raúl Ilargi Meijer at 9:50 am Finance Tagged with: Exxon, Facebook, fracking, Lavrov, Musk, OPCW, Rovelli, Skripal, subprime, Tesla, time 19 Responses »

• Russia Claims OPCW Manipulated Skripal Findings (AFP)

• To Opt Out Of Facebook’s Tracking, I’m Going To Have To Join Facebook (Wired)

• Tesla Is The Worst Car Manufacturer In The Developed World (F.)

• New Lawsuit Alleges Musk Knowingly Lied About Model 3 Production (ZH)

• Subprime Stages Comeback As ‘Non-Prime’ (CNBC)

• 247,977 Stories In The Vacant City (NYDN)

• Judge Rules Exxon Can’t Stop Probe Into Whether They Lied For Decades (Ind.)

• World May Hit 2ºC Warming in 10-15 Years Thanks to Fracking (NC)

• ‘There Is No Such Thing As Past Or Future’ (G.)

• Time is Elastic (Rovelli)

Curiouser. You’d think Russia doesn’t just make up an entire Swiss lab.

• Russia Claims OPCW Manipulated Skripal Findings (AFP)

Moscow on Saturday accused the chemical weapons watchdog of manipulating the results of its investigation into the poisoning of a former Russian spy, saying his samples had traces of a nerve agent used by the west. Britain says former double agent Sergei Skripal and his daughter Yulia were last month targeted with a nerve agent of the novichok family, which was developed in the Soviet Union. The attack shredded ties between Russia and Britain and led to a crisis in relations between Moscow and the west including a huge wave of tit-for-tat diplomatic expulsions. The Organisation for the Prohibition of Chemical Weapons has said it confirmed “the findings of the United Kingdom relating to the identity of the toxic chemical” without naming the substance involved.

On Saturday, Russia’s foreign minister, Sergei Lavrov, claimed the UN-linked Organisation for the Prohibition of Chemical Weapons (OPCW) had sent the Skripals’ biomedical samples to Swiss experts who found they contained traces of the nerve agent BZ, used by the west. “According to the results of the examination, the samples had traces of toxic chemical BZ and its precursors,” Lavrov said, citing what he said was “confidential information”. “Russia and the USSR never developed such chemical substances,” he said. “In this regard we are asking the OPCW why the information which reflected the conclusions of specialists from the Spiez laboratory was completely omitted from the final document.”

Not a discussion we should leave up to Facebook. Or Congress.

• To Opt Out Of Facebook’s Tracking, I’m Going To Have To Join Facebook (Wired)

Now I know what you’re thinking. What kind of person has never been on Facebook? I’d like to tell you it was all about privacy, but the truth is, I just had a bad feeling about it. You see, I went to Cambridge, so I was one of the first to get the chance to join what you insist on calling your “community.” And almost instantly, it was clear that it turned people into wankers. (Bigger wankers. This was Cambridge, after all.) If I remember correctly, in the early days everyone was desperate to have a higher friend count. Then it was obsessive tagging in photos. Yes, even in its earliest days, your system brought out the worst in people.

It’s not easy, not being on Facebook. At first, it was the parties. At a certain point, people stopped sending email invites. They just assumed you were on Facebook – and, if you weren’t, you didn’t find out. I’m 35 now, so I don’t get invited to parties, unless they’re for small children. Instead, I miss out on work, because I can’t contact people or share my articles. When you finally make journalism pivot to Facebook Groups, I’ll be completely screwed. I considered joining many times. But every time I aired the thought, I got the same reaction: “Don’t! It’s the worst!” I wasn’t sure if I remembered this correctly, so I called a few people to check. All agreed: they hate your service, but they have to use it, because everyone else does. (One person objected. She works in your London office.)

Every other social network, even Twitter, has a core of fans that genuinely wish it well. You’re the sole exception. Then I got into tech, and privacy, and data protection, and I learned that you were throttling internet freedoms in developing countries, and letting random strangers see your users’ most intimate details, so I started becoming one of those paranoid people who uses a VPN all the time, and puts a scrap of torn-off Post-It note on their laptop camera. Just like you! But you probably knew all this about me anyway. Which brings me back to my question. In your testimony to Congress, you said: “Anyone can turn off or opt out of any data collection for ads, whether they use our services or not.”

But, as you should know, while that’s possible for someone on Facebook, for me, a non-Facebook user, it’s not. Your illegal trackers follow me across 30 per cent of the internet, building a “shadow profile” you store in a nonanonymised format in your “Hive” analysis database. You claim to do it “for security purposes” (let me tell you, if Facebook’s security requires you to surveil the world’s population, then you have made a desert and called it peace). But reporters – and people who used to work in your advertising team – say the information is collected to improve the friend suggestions you’ll give me in case I do ever sign up. It’s one more growth hack on a whole site of them.

What can I do to stop you? I’ve installed tracker blockers on my browser, but, since you killed the media business, a lot of my favourite sites make me disable them. And your trackers work in the apps on my phone. Unless I go full tin-foil hat (and it’s tempting), you’ve basically left me with one option. To opt out of Facebook’s tracking, I’m going to have to join Facebook. So yeah: fuck you. Because, of course, this is exactly your plan. Forcing people onto Facebook is what you’re all about.

“..that is a terrible way to produce a consumer product, and a terrible way to generate returns for shareholders.”

• Tesla Is The Worst Car Manufacturer In The Developed World (F.)

I visited my first auto plant in 1992, and have been fortunate enough to visit plants in most countries where cars are made. I have seen workers sleeping under half-finished bodies in Brazil, seen employees trying to make doors fit by using rubber hammers at a now-closed Ford facility in New Jersey and, noted, that, yes, they do have beer in the vending machines at many German auto factories. To see a rack of die castings sitting outside exposed to the weather at a facility that is, according to Google Maps, 10.7 miles away from the actual Tesla assembly facility in Fremont is just mind-boggling. Tesla is the worst car manufacturer in the developed world. Bar none. Note that I didn’t write “designer” or “marketer,” but manufacturer.

Musk had zero auto industry experience when founding Tesla and CTO J.T. Straubel—who according to Tesla’s 10-K filing personally holds Tesla’s important patents—developed a love for electric vehicles by rebuilding golf carts. It’s just astounding to me that the markets are affording a $50 billion valuation to a company that can’t perform the most basic task for which it was incorporated. Famed VW purchasing chief José Ignacio López de Arriortúa famously walked into a plant and repeatedly pointed at boxes of yet-to-be-used parts and yelled the word “capital.” When capital is tied up in byzantine manufacturing processes that stunts the development of cash flow. It’s all connected. This is why Tesla has such dire cash flow problems.

This is why I believe—sorry, Elon—Tesla is going to have to issue equity this year. My favorite automotive mantra is “quality is designed in.” That’s the most damning piece of information in the CNBC article, actually, more damning than the pictures of parts racks. Here is the quote: “Current and former employees from the company’s Fremont, Calif. and Sparks, Nevada factories blame Tesla for spending less time to vet suppliers than is typical in auto manufacturing. These people said the company failed to comprehensively test “variance specs” with some vendors before embarking on Model 3 production.”

Tesla has cut corners in building up to current production, and published reports this week indicated Tesla was alerting suppliers of an incredibly fast 19-month design-to-job one timetable on the upcoming Model Y crossover. So, it would seem corner-cutting is continuing, and that is a terrible way to produce a consumer product, and a terrible way to generate returns for shareholders.

He better hope he wins this one.

• New Lawsuit Alleges Musk Knowingly Lied About Model 3 Production (ZH)

A new securities class action lawsuit filed in late March 2018, which names Elon Musk as a defendant, alleges that the Tesla CEO knew that the Model 3 was not going to be able to be produced as the rates he claimed – and that the company was not going to be able to meet production goals due to – get this – the production lines not even being assembled. The lawsuit alleges that this didn’t prevent Elon Musk from going out and telling the investing public otherwise, hence the allegation of securities fraud. First, the allegation that Musk was told by his own employees that the Model 3 couldn’t be mass produced by the end of 2017, which was the company’s stated goal.

Then, after claiming in May 2017 that the company was “on track” to meet its mass production goal, it’s alleged the company hadn’t even finished building its production lines, clearly meaning it wasn’t “on track”. The lawsuit alleges that Musk knew the line was “way behind”. The suit alleges that the company was building Model 3’s by hand at a “pilot shop” at the same time Tesla claimed to be on track for “mass production”; it also claims that it was “evident to anyone who visited the facility” – including Elon Musk – that the line wasn’t built and that “construction workers were spending most of their shifts sitting around with nothing to do”. We also read in the lawsuit that Tesla’s Gigafactory, at the time in question, was allegedly capable of producing only one battery pack per day – and that the production of one battery pack took “two shifts” to complete.

The suit alleges that the company’s former CFO, Jason Wheeler – who is one of more than 50 key executives and VPs to have left the company over the last half decade or so – told Elon Musk personally that they wouldn’t be able to mass produce by the end of 2017. The entire lawsuit is available at this link and some of the most interesting content was first shared by critics of the company on Twitter. The drumbeat of accountability for Elon Musk continues to pound louder and louder as each day progresses, with some analysts calling for the SEC to investigate him if the company doesn’t meet its stated cash flow positive and “no capital raise” guidance for the back end of 2018.

Got to find the last sucker.

• Subprime Stages Comeback As ‘Non-Prime’ (CNBC)

They were blamed for the biggest financial disaster in a century. Subprime mortgages – home loans to borrowers with sketchy credit who put little to no skin in the game. Following the epic housing crash, they disappeared, due to strong, new regulation, and zero demand from investors who were badly burned. Barely a decade later, they’re coming back with a new name — nonprime — and, so far, some new standards. California-based Carrington Mortgage Services, a midsized lender, just announced an expansion into the space, offering loans to borrowers, “with less-than-perfect credit.” Carrington will originate and service the loans, but it will also securitize them for sale to investors.

“We believe there is actually a market today in the secondary market for people who want to buy nonprime loans that have been properly underwritten,” said Rick Sharga, executive vice president of Carrington Mortgage Holdings. “We’re not going back to the bad old days of ninja lending, when people with no jobs, no income, and no assets were getting loans.” Sharga said Carrington will manually underwrite each loan, assessing the individual risks. But it will allow its borrowers to have FICO credit scores as low as 500. The current average for agency-backed mortgages is in the mid-700s. Borrowers can take out loans of up to $1.5 million on single-family homes, townhomes and condominiums.

They can also do cash-out refinances, where borrowers tap extra equity in their homes, up to $500,000. Recent credit events, like a foreclosure, bankruptcy or a history of late payments are acceptable. All loans, however, will not be the same for all borrowers. If a borrower is higher risk, a higher down payment will be required, and the interest rate will likely be higher. “What we’re talking about is underwriting that goes back to common sense sort of practices. If you have risk, you offset risk somewhere else,” added Sharga, while touting, “We probably are going to have the widest range of products for people with challenging credit in the marketplace.”

It’s not about people, it’s about money. Fundamental flaw.

• 247,977 Stories In The Vacant City (NYDN)

There’s a hidden city in the five boroughs. Though its permanent population is zero, it is growing faster than any other neighborhood. Early numbers from the Census Bureau’s Housing and Vacancy Survey show the unoccupied city has ballooned by 65,406 apartments since 2014, an astonishing 35% jump in size in the three years since the last survey. Today, 247,977 units — equivalent to more than 11% of all rental apartments in New York City — sit either empty or scarcely occupied, even as many New Yorkers struggle to find an apartment they can afford. The Vacant City — let’s call it that, with a tip of the hat to the 1948 movie and old TV series “Naked City” — has tripled in 30 years.

A generation ago, there were just 72,051 apartments in the Vacant City. Back in 1987, when rents were cheap by today’s standards at a median $395 a month, the Vacant City made up less than 4% of rental apartments. Today, the median rent is $1,450, having risen twice as fast as inflation, even while the Vacant City tripled in size. The numbers just don’t add up the way conventional wisdom said they should. For years, development officials, the real estate industry and think tanks have told us that artificially low rents are holding the city back. Higher rents, the argument went, would free landlords to make a reasonable amount of money and serve as an incentive to increase the housing supply.

The new Census gleanings finally put the lie to that reasoning. We have higher prices for sure — but the only part of the city’s residential real estate that has grown is the Vacant City. More apartments are being held off the market than ever. Some remain vacant for legitimate reasons. Almost 28,000 of those unused units have been rented or sold but not yet occupied, or are awaiting a sale. Almost 80,000 are getting renovated, 9,600 tied up in court, and 12,700 vacant because the owner is ill or elderly or simply can’t be bothered. But that still leaves more than 100,000 units — 74,945 occupied temporarily or seasonally, and 27,009 held off the market for unexplained reasons.

Shell, Exxon, they’ve all known all along. But they have lots of power.

• Judge Rules Exxon Can’t Stop Probe Into Whether They Lied For Decades (Ind.)

A Massachusetts judge has ruled that ExxonMobil cannot stop a probe into whether the oil giant misled shareholders for decades about the dangers of climate change and its impact on their business. The judge, in a Friday ruling, found that Massachusetts Attorney General Maura Healey has grounds to pursue its civil investigation into the matter even though Exxon is not technically an in-resident corporation. The judgement follows after a federal judge in New York dismissed a similar lawsuit aimed at ending the climate change probe late last month. In that lawsuit, Exxon argued that Ms Healey and her New York counterpart, Eric Schneiderman, were pursuing their climate probes in bad faith. The judge dismissed the argument as “implausible”.

“For the second time this month, Exxon’s scorched earth campaign to block our investigation has been entirely rejected by the courts. In its decision today, our state’s highest court affirmed that Exxon is subject to our laws, and that our office has authority to investigate,” Ms Healey said in a statement following the decision. “Now Exxon must come forward with the truth, what it knew about climate change, when, and what it told the world. The people of Massachusetts — and people everywhere — deserve answers.” New York and Massachusetts first began their climate change probes after news reports in 2015 found that Exxon had known for years that reducing greenhouse gas emissions is necessary to combat climate change impacts, but did not reveal those concerns to shareholders or the public.

Exxon has denied that their public policies were in any way inconsistent with what their scientists’ findings that climate change poses a serious risk to its business and to the environment.

It’s used to be 2100. Now it’s 2030.

• World May Hit 2ºC Warming in 10-15 Years Thanks to Fracking (NC)

In 2011, a Cornell University research team first made the groundbreaking discovery that leaking methane from the shale gas fracking boom could make burning fracked gas worse for the climate than coal. In a sobering lecture released this month, a member of that team, Dr. Anthony Ingraffea, Professor of Engineering Emeritus at Cornell University, outlined more precisely the role U.S. fracking is playing in changing the world’s climate. The most recent climate data suggests that the world is on track to cross the two degrees of warming threshold set in the Paris accord in just 10 to 15 years, says Ingraffea in a 13-minute lecture titled “Shale Gas: The Technological Gamble That Should Not Have Been Taken,” which was posted online on April 4.

That’s if American energy policy follows the track predicted by the U.S. Energy Information Administration, which expects 1 million natural gas wells will be producing gas in the U.S. in 2050, up from roughly 100,000 today. An average global temperature increase of 2° Celsius (3.6° Fahrenheit) will bring catastrophic changes — even as compared against a change of 1.5° C (2.7° F). “Heat waves would last around a third longer, rain storms would be about a third more intense, the increase in sea level would be approximately that much higher and the percentage of tropical coral reefs at risk of severe degradation would be roughly that much greater,” with just that half-degree difference, NASA‘s Jet Propulsion Laboratory explained in a 2016 post about climate change.

A draft report from the Intergovernmental Panel on Climate Change (IPCC), which was leaked this January, concludes that it’s “extremely unlikely” that the world will keep to a 1.5° change, estimating that the world will cross that threshold in roughly 20 years, somewhat slower than Ingraffea’s presentation concludes.

Hawking’s successor.

• ‘There Is No Such Thing As Past Or Future’ (G.)

Rovelli’s work as a physicist, in crude terms, occupies the large space left by Einstein on the one hand, and the development of quantum theory on the other. If the theory of general relativity describes a world of curved spacetime where everything is continuous, quantum theory describes a world in which discrete quantities of energy interact. In Rovelli’s words, “quantum mechanics cannot deal with the curvature of spacetime, and general relativity cannot account for quanta”. Both theories are successful; but their apparent incompatibility is an open problem, and one of the current tasks of theoretical physics is to attempt to construct a conceptual framework in which they both work.

Rovelli’s field of loop theory, or loop quantum gravity, offers a possible answer to the problem, in which spacetime itself is understood to be granular, a fine structure woven from loops. String theory offers another, different route towards solving the problem. When I ask him what he thinks about the possibility that his loop quantum gravity work may be wrong, he gently explains that being wrong isn’t the point; being part of the conversation is the point. And anyway, “If you ask who had the longest and most striking list of results it’s Einstein without any doubt. But if you ask who is the scientist who made most mistakes, it’s still Einstein.”

How does time fit in to his work? Time, Einstein long ago showed, is relative – time passes more slowly for an object moving faster than another object, for example. In this relative world, an absolute “now” is more or less meaningless. Time, then, is not some separate quality that impassively flows around us. Time is, in Rovelli’s words, “part of a complicated geometry woven together with the geometry of space”. For Rovelli, there is more: according to his theorising, time itself disappears at the most fundamental level. His theories ask us to accept the notion that time is merely a function of our “blurred” human perception.

We see the world only through a glass, darkly; we are watching Plato’s shadow-play in the cave. According to Rovelli, our undeniable experience of time is inextricably linked to the way heat behaves. In The Order of Time, he asks why can we know only the past, and not the future? The key, he suggests, is the one-directional flow of heat from warmer objects to colder ones. An ice cube dropped into a hot cup of coffee cools the coffee. But the process is not reversible: it is a one-way street, as demonstrated by the second law of thermodynamics. Time is also, as we experience it, a one-way street. He explains it in relation to the concept of entropy – the measure of the disordering of things.

Entropy was lower in the past. Entropy is higher in the future – there is more disorder, there are more possibilities. The pack of cards of the future is shuffled and uncertain, unlike the ordered and neatly arranged pack of cards of the past. But entropy, heat, past and future are qualities that belong not to the fundamental grammar of the world but to our superficial observation of it. “If I observe the microscopic state of things,” writes Rovelli, “then the difference between past and future vanishes … in the elementary grammar of things, there is no distinction between ‘cause’ and ‘effect’.”

Extract from Carlo Rovelli’s The Order of Time.

Why do things fall? Because “..the movement of things inclines naturally towards where time passes more slowly..”

• Time is Elastic (Rovelli)

Reality is often very different from what it seems. The Earth appears to be flat but is in fact spherical. The sun seems to revolve in the sky when it is really we who are spinning. Neither is time what it seems to be. Let’s begin with a simple fact: time passes faster in the mountains than it does at sea level. The difference is small but can be measured with precision timepieces that can be bought today for a few thousand pounds. This slowing down can be detected between levels just a few centimetres apart: a clock placed on the floor runs a little more slowly than one on a table. It is not just the clocks that slow down: lower down, all processes are slower. Two friends separate, with one of them living in the plains and the other going to live in the mountains.

They meet up again years later: the one who has stayed down has lived less, aged less, the mechanism of his cuckoo clock has oscillated fewer times. He has had less time to do things, his plants have grown less, his thoughts have had less time to unfold … Lower down, there is simply less time than at altitude. Einstein understood this slowing down of time a century before we had clocks precise enough to measure it. He imagined that the sun and the Earth each modified the space and time that surrounded them, just as a body immersed in water displaces the water around it. This modification of the structure of time influences in turn the movement of bodies, causing them to “fall” towards each other.

What does it mean, this “modification of the structure of time”? It means precisely the slowing down of time described above: a mass slows down time around itself. The Earth is a large mass and slows down time in its vicinity. It does so more in the plains and less in the mountains, because the plains are closer to it. This is why the friend who stays at sea level ages more slowly. If things fall, it is due to this slowing down of time. Where time passes uniformly, in interplanetary space, things do not fall. They float. Here on the surface of our planet, on the other hand, the movement of things inclines naturally towards where time passes more slowly, as when we run down the beach into the sea and the resistance of the water on our legs makes us fall headfirst into the waves. Things fall downwards because, down there, time is slowed by the Earth.

Debt Rattle April 10 2018

Apr 102018

April 10, 2018 Posted by Raúl Ilargi Meijer at 8:51 am Finance Tagged with: bitcoin, bots, Cohen, debt, deficit, Facebook, FBI, Germany, sanctions, Skripal, Syria, Trump, Twitter, Xi 16 Responses »

Acme Storm over Manhattan 1950

• Trump Blasts “Disgraceful” FBI Raid Of Lawyer’s Office (ZH)

• Xi Vows To Further Open China Economy As US Trade Spat Simmers (AFP)

• Global Debt Jumped to Record $237 Trillion Last Year

• US Deficit to Surpass $1 Trillion Two Years Ahead of Estimates – CBO (BBG)

• Global Trade Is Broken, And Trump Is Sparking The Crisis Needed (Morici)

• Russian Firms And Rouble Hit Heavily By Trump Sanctions (G.)

• Bitcoin, the Biggest Bubble in History, Is Popping – BofA (BBG)

• Bots, Good Or Bad, Dominate Twitter Conversation (AFP)

• Black Lives Matter Facebook Page With 700,000 Followers Exposed As Fake (G.)

• 10 New Zealanders Download App On Facebook, Expose 63,714 Friends (G.)

• Your Facebook Data Is Only Worth $5.20 On The Dark Web (MW)

• Jerome Is The New Janet: Same Old Keynesian Jabberwocky (Stockman)

• Yulia Skripal Discharged From Hospital (G.)

• No Trace Of Chemical Weapons In Douma, Photos Are Fake – Russia (RT)

• “Weapons Of Mass Destruction,” And All (Kunstler)

• In 2020, German Society Will Start Collapsing (GEFIRA)

• Fishing Boat Caught With Illegal 18-Mile-Long Nets (Ind.)

“..the fact that the FBI likely seized privileged material between the president and his lawyer is certainly troubling.”

Or is it just a promotion campaign for Comey’s book tour?

• Trump Blasts “Disgraceful” FBI Raid Of Lawyer’s Office (ZH)

Update II: As many probably suspected, Trump attorney Michael Cohen is under investigation for possible fraud and campaign finance violations, the Washington Post reported. The FBI has seized documents – including emails, tax documents and other records – related to Cohen’s $130,000 payment to adult film star Stormy Daniels. Meanwhile, President Trump has stepped up to defend his longtime personal attorney, calling the raid “a whole new level of unfairness” and going as far to say it was an “attack on our country, on what we stand for before heading into a meeting with top military leaders.” He also described the special counsel’s team as “the most conflicted group of people I’ve ever met” and said the raid was “a disgraceful situation.”

Trump added that the raid happened after Deputy AG Rod Rosenstein – who is supervising the Mueller probe – approved a referral that Mueller brought to the US Attorney for the Southern District of New York. Jeff Sessions also came under fire as the president bashed him once again for recusing himself from the Mueller probe. Trump also exclaimed that “no one is looking at the other side” referring to Clinton’s 30,000 missing emails. “I have this witch hunt constantly going on,” he said. Of course, Trump has every reason to defend Cohen. As Trump’s longtime lawyer, Cohen knows where the bodies are buried. And the fact that the FBI likely seized privileged material between the president and his lawyer is certainly troubling.
–
Update: Michael Cohen’s lawyer says the FBI seized privileged communications between Cohen and his clients – a group that notably includes President Trump. And thus, we have what could quite possibly be an ulterior motive for the search. While initial reports suggested the raid on Cohen’s home wasn’t related to the Mueller probe, CBS is reporting that it’s unclear whether the raid was in relation to Stormy Daniels, the Mueller probe or something else. The Wall Street Journal reported that Cohen’s office in Rockefeller Center was searched along with his home and hotel room. The search was executed by the Manhattan US Attorney’s Office which is carrying out an independent investigation in coordination with Mueller. Cohen has of course already turned over his emails to the special counsel.

For now it’s just words. But his tone could have been different.

• Xi Vows To Further Open China Economy As US Trade Spat Simmers (AFP)

Chinese President Xi Jinping pledged on Tuesday to lower car tariffs this year and take other steps to further open the world’s number two economy, indirectly addressing major complaints by the United States in a simmering trade row. Promising a “new phase of opening up”, Xi told an economic forum on the southern island of Hainan that Beijing “does not seek a trade surplus” and hopes to increase imports. He said China will take measures to liberalise automobile investment, significantly reduce tariffs on cars this year and protect intellectual property – all areas that have been high on the list of demands by Washington. “Economic globalisation is an irreversible trend of the time,” Xi told the Boao Forum for Asia.

“The door of China’s opening up will not close, it will only open wider and wider.” Xi pushed measures in areas that have been high on the list of US President Donald Trump’s ire at China. “When a car is sent to the United States from China, there is a Tariff to be paid of 2.5%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%,” Trump tweeted on Monday. “Does that sound like free or fair trade. No, it sounds like STUPID TRADE – going on for years!” Without directly responding to Trump, Xi promised China would lower import tariffs for vehicles and other products, but he gave no details or an exact date for taking the measures.

[..] Xi also pledged specific measures to address IP protection. “This year, we will reorganise the State Intellectual Property Office to strengthen law enforcement,” he told the forum, an Asian version of the World Economic Forum, which draws global leaders to its annual meeting in the Swiss ski resort of Davos. “We encourage Chinese and foreign companies to carry out normal technical exchanges and cooperation to protect the legitimate intellectual property rights of foreign-funded enterprises in China,” he said.

This will be important: “Ireland and Italy are the only major countries where household debt as a percentage of GDP is below 50%.”

• Global Debt Jumped to Record $237 Trillion Last Year

Global debt rose to a record $237 trillion in the fourth quarter of 2017, more than $70 trillion higher from a decade earlier, according to an analysis by the Institute of International Finance. Among mature markets, household debt as a percentage of GDP hit all-time highs in Belgium, Canada, France, Luxembourg, Norway, Sweden and Switzerland. That’s a worrying signal, with interest rates beginning to rise globally. Ireland and Italy are the only major countries where household debt as a percentage of GDP is below 50%. Still, the ratio of global debt-to-GDP fell for the fifth consecutive quarter as the world’s economic growth accelerated. The ratio is now around 317.8% of GDP, or 4 percentage points below the high in the third quarter of 2016, according to the IIF. Among emerging markets, household debt to GDP is approaching parity in South Korea at 94.6%.

And the Fed wants to raise rates?!

• US Deficit to Surpass $1 Trillion Two Years Ahead of Estimates – CBO (BBG)

The U.S. budget deficit will surpass $1 trillion by 2020, two years sooner than previously estimated, as tax cuts and spending increases signed by President Donald Trump do little to boost long-term economic growth, according to the Congressional Budget Office. Spending will exceed revenue by $804 billion in the fiscal year through September, jumping from a projected $563 billion shortfall forecast in June, the non-partisan arm of Congress said in a report Monday. In fiscal 2019, the deficit will reach $981 billion, compared with an earlier projection of $689 billion. The nation’s budget gap was only set to surpass the trillion-dollar level in fiscal 2022 under CBO’s report last June.

Deficits are growing as the Trump administration enacted a tax overhaul this year that will lower federal revenue and Congress approved a roughly $300 billion spending increase. The fresh CBO estimates could heighten investor worries as they weigh the potential impact that tariff threats between the U.S. and China may have on the world economy. The report includes new projections for the effects of the tax legislation – saying it will increase the deficit by almost $1.9 trillion over the next 11 years, when accounting for its macroeconomic effects and increased debt-service costs. In December, Congress’s Joint Committee on Taxation had said the tax package would reduce federal revenue by almost $1.1 trillion over a 10-year period.

The WTO and democracy.

• Global Trade Is Broken, And Trump Is Sparking The Crisis Needed (Morici)

[..] It may be time to recognize that China is not a market economy — and is not likely to become one anytime soon. Over time, the WTO membership encompassed increasingly diverse nations. For example, Saudi Arabia joined in 2005, is not a democracy and hardly has a market economy. It’s a monarchy and dependent on oil, its government seeks to rig petroleum markets through OPEC. Nondemocratic, nonmarket economies were admitted on the premise that participation in the system would encourage reforms but as Saudi Arabia demonstrates — similar to Mexico in the 1980s — political and economic progress mostly happens when autocratic regimes are threatened by financial crisis.

For the oil kingdom, it took the U.S. shale boom and prospects of oil permanently depressed at about $65 a barrel to inspire House of Saud to select a progressive crown prince. China joined the WTO in 2002 but has hardly liberalized. Beijing is perfecting Orwellian mechanisms to monitor its citizens’ activities and squash political dissent. President Xi Jinping is enhancing the role of state-owned enterprises, extending state influence over private firms and foreign subsidiaries, and compelling the latter to form joint ventures with Chinese firms and embrace Beijing’s propaganda strategies.

China’s state capitalism clearly creates unfair advantages, imposes trade deficits and job losses on other nations, and has been the target of many unfair trade complaints in the WTO, but Beijing has invested in top flight U.S. lawyers — for example, Steptoe & Johnson. And the activities of its complex mix of state-owned and state-supported private enterprise have proven difficult to discipline under WTO rules, which were written to constrain governments operating in a market context.

From 2011 to 2017, the United States was frustrated in many dispute settlement processes covering nearly 50 industries. In 2016, the administration aides cited a long list of complaints in an effort to block the reappointment of a South Korean judge to the appellate body. Since then, Mr. Trump has been criticized — as he seems to be for every principled action — for continuing this policy by blocking the appointment of other judges to compel reform. It may be time to recognize that China is not a market economy — and is not likely to become one anytime soon. And it is not likely possible to rewrite the WTO rules just to suit its peculiar system.

Talk is better.

• Russian Firms And Rouble Hit Heavily By Trump Sanctions (G.)

The Trump administration’s new sanctions on Russian oligarchs and top government officials began to bite on Monday as the rouble suffered its biggest daily fall in more than three years, the main Russian stock index slumped and investors dumped shares in businesses controlled by Oleg Deripaska. Russia’s currency briefly dipped more than 4% before recovering slightly to trade at 60.42 to the dollar on Monday evening, down 3.8%, its biggest daily percentage fall since January 2015. The value of Deripaska’s aluminium producer Rusal halved in Hong Kong and more than 40% was wiped off the value of his London-listed EN+ as investors took fright at the potential impact.

Shares in Rusal and EN+ had already fallen sharply on Friday in response to the sanctions, which were announced towards the end of trading in London. The Russian stock market also fell heavily. The main RTS index dropped 11%, affecting companies not caught by the sanctions. The price of aluminium jumped as traders worried Rusal would be excluded from supplying the market. The firm, which produces almost 6% of the world’s aluminium, said the sanctions could cause technical defaults on bank loans and some credit obligations. Both Rusal and EN+, Deripaska’s holding company, said the sanctions could be “materially adverse to the business and prospects” of the companies.

Rusal and seven other companies linked to Deripaska were the main targets when the US imposed sanctions designed to punish Vladimir Putin’s inner circle for “malign activity”, including support for Bashar al-Assad’s government in Syria and interfering with the US election in 2016. Rusal sells more than 10% of its aluminium to the US.

Not my words. But nice graph.

• Bitcoin, the Biggest Bubble in History, Is Popping – BofA (BBG)

The greatest bubble in history is popping, according to Bank of America. The cryptocurrency is tracking the downfalls of the other massive asset-price bubbles in history less than one year out from its record, analysts lead by Chief Investment Strategist Michael Hartnett wrote in a note Sunday. The cryptocurrency has fallen more than 65% since peaking in December at $19,511. Bitcoin rose 2.2% to $6,750 on Monday.

“..accounting for two-thirds of tweets linking to popular websites..”

• Bots, Good Or Bad, Dominate Twitter Conversation (AFP)

Automated accounts or “bots” play a big role in disseminating information on Twitter, accounting for two-thirds of tweets linking to popular websites, a study showed Monday. The Pew Research Center report found bots were a major source for diffusing information on news, sports, entertainment and other topics. The researchers found that of all tweeted links to popular websites, 66% were shared by accounts that appeared to be automated rather than human users. While bots have gained attention due to concerns over Russian-sponsored manipulation of social media during the 2016 political campaign and for other hot-button topics, the researchers said they made no effort to distinguish between “good” or “bad” bots.

“The study does not find evidence that automated accounts currently have a liberal or conservative ‘political bias’ in their overall link-sharing behavior,” the researchers wrote. Twitter’s policy on automated accounts, last updated in November, allows bots to operate but with limitations. The policy allows for bots to “automatically broadcast helpful information” or “run creative campaigns that auto-reply to users.” But Twitter’s rules forbid automatic posts about trending topics or using automation “to attempt to influence or manipulate trending topics.” It also bans the use of multiple accounts to generate more activity.

“These findings illustrate the extent to which bots play a prominent and pervasive role in the social media environment,” says Pew researcher Aaron Smith. “Automated accounts are far from a niche phenomenon: They share a significant portion of tweeted links to even the most prominent and mainstream publications and online outlets. Since these accounts can impact the information people see on social media, it is important to have a sense their overall prevalence on social media.”

“.. upwards of $100,000 in donations, at least some of which was directed to bank accounts registered in Australia.”

One thing: Facebook could have known this.

• Black Lives Matter Facebook Page With 700,000 Followers Exposed As Fake (G.)

A high-ranking Australian union official has been suspended amid reports he ran a fake Black Lives Matter Facebook page that solicited donations from the movement’s supporters. CNN reports that Ian MacKay – an official with the National Union of Workers – helped set up and run a Facebook page called Black Lives Matter as well as other domain names linked to black rights. The page, which was removed by Facebook after CNN’s queries, had almost 700,000 followers – more than double the official Black Lives Matter page. MacKay – who is white – did not respond to calls or emails but denied running the page when contacted by CNN. A statement given to the Guardian by the NUW’s national secretary, Tim Kennedy, said the union had launched an investigation into the claims made in the CNN report.

He said the union had suspended “the relevant officials pending the outcome of an investigation”. “The NUW is not involved in and has not authorised any activities with reference to claims made in CNN’s story,” he said. The Guardian understands MacKay and one other NUW official has been suspended. In 2015 Mackay was appointed vice president of the NUW’s general branch and the union’s public office records state that he still holds the position. The investigation quoted sources who said the page may have garnered upwards of $100,000 in donations, at least some of which was directed to bank accounts registered in Australia.

This happened 4 years ago! And only now Facebook is “..in the process of alerting New Zealanders..”?!

• 10 New Zealanders Download App On Facebook, Expose 63,714 Friends (G.)

Ten New Zealanders who downloaded an app on Facebook could have exposed up to 63,714 of their compatriots to the data mining tactics of Cambridge Analytica. Facebook has told the country’s privacy commissioner that it is in the process of alerting New Zealanders who were affected by the breach, which occurred when ten users downloaded a personality quiz app. “For New Zealand, we estimate a total of 63,724 people may have been impacted – 10 are estimated to have downloaded the quiz app with 63,714 friends possibly impacted,” said Antonia Sanda, head of communications for Facebook in Australia and New Zealand.

New Zealand’s privacy commissioner, John Edwards, said he was urgently seeking further information from Facebook on how New Zealanders data was used by Cambridge Analytica, and is working closely with his counterparts in the US, UK Australia and Canada to establish the severity and ramifications of the privacy beach. “I think we have some real information deficits that I hope my colleagues in the UK and the US will uncover … I am not sure New Zealanders were ‘targeted’ but I think there is a level of complacency [in New Zealand]. And when you say we’re so far away, we’re only one click away really,” Edwards said.

Edwards deleted his own Facebook account shortly after the revelations regarding Cambridge Analytica broke, and said New Zealanders should seriously consider doing the same and then resetting their profile. “I am actually quite concerned about the drip-feed of information [from Facebook]. These events occurred four years ago. There was knowledge about Cambridge Analytica targeting tactics a good two years ago, yet we are really only seeing Facebook confront this issue now,” Edwards said.

This, too, is Facebook. Supply and demand.

• Your Facebook Data Is Only Worth $5.20 On The Dark Web (MW)

Were you impacted by Cambridge Analytica’s misuse of Facebook data? An estimated 87 million Facebook users will find out Monday whether the group improperly used their data, the social-media company said. All 2.2 billion Facebook users will get see a message on Facebook called “Protecting Your Information,” that lays out which third-party apps have access to your individual Facebook profile. Whether or not you were impacted by the Cambridge Analytica incident, there’s a depressing aspect of many recent privacy violations: The most important parts of your identity can be sold online for just a few dollars.

Consumers have to spend hours of their time — and, sometimes, their own money — when they find out their driver’s license, Facebook “likes” or Social Security number have been exposed to hackers. But those who sell them are making only petty cash. That’s according to a new report from the content marketing agency Fractl, which analyzed all the fraud-related listings on three large “dark web” marketplaces — Dream, Point and Wall Street Market — over several days last month. The “dark web” is part of the internet that people can only access by using special software. To create this report, Fractl accessed the dark web through the browser Tor.

People buy other risky or illegal substances on the dark web, including drugs, pirated content like movies or music and materials that help with scams, including credit-card “skimmers.” Facebook logins can be sold for $5.20 each because they allow criminals to have access to personal data that could potentially let them hack into more of an individual’s accounts. The credentials to a PayPal account with a relatively high balance can be sold on the dark web for $247 on average, the report found. One’s entire online identity, including personal identification numbers and hacked financial accounts, can be sold for only about $1,200 on the dark web, Fractl found. That’s because so much personal information may already available to hackers, after repeated data breaches across a range of industries.

“..fiscally incontinent government..” Great line.

• Jerome Is The New Janet: Same Old Keynesian Jabberwocky (Stockman)

The election of 2016 was supposed to be the most disruptive break with the status quo in modern history, if ever. On the single most important decision of his tenure, however, the Donald has lined-up check-by-jowl with Barry and Dubya, too. That is to say, Trump’s new Fed chairman, Jerome Powell, amounts to Janet Yellen in trousers and tie. In fact, you can make it a three-part composite by adding Bernanke with a full head of hair and Greenspan sans the mumble. The overarching point here is that the great problems plaguing American society – scarcity of good jobs, punk GDP growth, faltering productivity, raging wealth mal-distribution, massive indebtedness, egregious speculative bubbles, fiscally incontinent government – are overwhelmingly caused by our rogue central bank.

They are the fetid fruits of massive and sustained financial repression and falsification of the most import prices in all of capitalism – the prices of money, debt, equities and other financial assets. Moreover, the worst of it is that the Fed is overwhelmingly the province of an unelected politburo that rules by the lights of its own Keynesian groupthink and by the hypnotic power of its Big Lie. So powerful is the latter that American democracy has meekly seconded vast, open-ended power to dominate the financial markets, and therefore the warp and woof of the nation’s $19 trillion economy, to a tiny priesthood possessing neither of the usual instruments of rule.

That is to say, never before in history has a people so completely and abjectly surrendered to an occupying power – even though its ostensibly democratic government already possessed all the votes and all the guns. So it is no exaggeration to say, therefore, that the Fed is an alien state unto itself. That was powerfully symbolized most recently by the appointment of John Williams, a lifetime apparatchik at the San Francisco Fed, to the job of head satrap at the central bank’s Liberty Street outpost in the heart of Wall Street. In the scheme of things, the President of the New York Fed is #2 in the whole central banking apparatus, and as such is immensely more powerful than any Senate Committee Chairman or House Speaker. But Williams’ appointment was not reviewed or passed upon by a single elected official accountable to any voter anywhere in the US of A.

Hard to tell what the next steps are.

• Yulia Skripal Discharged From Hospital (G.)

Yulia Skripal, the daughter of the former Russian spy Sergei Skripal, has been discharged from hospital, according to reports. Just over one month after she and her father were found in Salisbury in Wiltshire after being poisoned with a nerve agent, the BBC reported that Skripal had left Salisbury district hospital. Skripal, 33, flew to the UK on 3 March, the day before she and her father are believed to have been poisoned by a novichok nerve agent. She released a statement on Friday to say her strength was “growing daily”. The BBC reported on Tuesday morning that Skripal had been taken to a secure location, though a hospital spokesman declined to comment on the reports. Christine Blanshard, the hospital’s deputy chief executive, and Lorna Wilkinson, the director of nursing, are to make a statement later on Tuesday morning.

It’s the White Helmets again.

• No Trace Of Chemical Weapons In Douma, Photos Are Fake – Russia (RT)

The Russian military has found no trace of chemical weapons use after searching parts of Syria’s Douma allegedly targeted by an “attack.” Photos of victims posted by the White Helmets are fake, Russia’s Defense Ministry said. Experts in radiological, chemical and biological warfare, as well as medics, on Monday inspected the parts of the Eastern Ghouta city of Douma, where an alleged chemical attack supposedly took place on Saturday, the Russian Reconciliation Center for Syria said in a statement. The specialists “found no traces of the use of chemical agents” after searching the sites, the statement said. The center’s medical specialists also visited a local hospital but found no patients that showed signs of chemical weapons poisoning.

“All these facts show… that no chemical weapons were used in the town of Douma, as it was claimed by the White Helmets,” the statement said, referring to the controversial “civil defense” group that was among the first to report about the alleged attack. “All the accusations brought by the White Helmets, as well as their photos… allegedly showing the victims of the chemical attack, are nothing more than a yet another piece of fake news and an attempt to disrupt the ceasefire,” the Reconciliation Center said. On Saturday, some rebel-linked groups, including the White Helmets, accused the Syrian government of carrying out a chemical attack that, allegedly, affected dozens of civilians in the Eastern Ghouta town of Douma.

The reports have already provoked a wave of outrage in the West, as the US and the EU rushed to put the blame for the incident on Damascus and Moscow. US President Donald Trum hastily denounced the perceived attack as a “mindless” atrocity and a “humanitarian disaster for no reason whatsoever,” warning of a “big price” to be paid. Syria and Russia have dismissed the accusations and called the reports fake news, aimed at helping the extremists and at justifying potential strikes against Syrian forces. In the very early hours of Monday, Israeli fighter jets targeted Syria’s T-4 airbase in Homs province, the Russian Defense Ministry said. Israel has not commented on the strike. Earlier, a number of Israeli officials had called on the US to strike Syria as a response to the reported chemical attack.

Like is the case with Russia, the Organization for the Prohibition of Chemical Weapons has declared Syria’s chemical weapons arsenal destroyed.

• “Weapons Of Mass Destruction,” And All (Kunstler)

[..] a joint mission of the United Nations Human Rights Commission (UNHRC) and the Organization for the Prohibition of Chemical Weapons (OPCW) was called in to supervise the destruction of the Syrian government’s chemical weapons, and certified it as accomplished in late 2014. Yet, poison gas incidents continued – most notoriously in 2017 when President Donald Trump responded to one with a sortie of cruise missiles against a vacant Syrian government airfield. And now another incident in the Damascus suburb of Douma has provoked Mr. Trump to tweetstormed threats of retaliatory violence, just days after he proposed a swift withdrawal from that vexing corner of the world.

Surely by now the American public has developed some immunity to claims of nefarious doings in foreign lands (“weapons of mass destruction,” and all). The operative sentence in that New York Times report is “…Syrian forces hit a suburb of Damascus with bombs that rescue workers said unleashed toxic gas.” Yeah, well, how clear is it that the toxic gas was contained in the bombs, or rather that the bombs dropped by the Syrian military blew up a chemical weapon depot controlled by anti-government Jihadis? Does that hodgepodge of maniacs show any respect for the UN, or the Geneva Convention, or any other agency of international law?

As in many previous such incidents, we don’t know who was responsible — though there is plenty of reason to believe that parties within the US establishment are against Mr. Trump’s idea of getting the hell out of that place, and might cook up a convenient reason to prevent it. Lastly, how is it in Bashar al-Assad’s interests to provoke a fresh international uproar against him and his regime? I’d say it is not the least in his interest, since he is on the verge of putting an end to the awful conflict. He may not be a model of rectitude by Western standards, but he’s not a mental defective. And he has very able Russian support advising him in what has been so far a long and difficult effort to prevent his state from failing — or being failed for him.

Germany, Japan, China.

• In 2020, German Society Will Start Collapsing (GEFIRA)

The next crisis is just a couple of years away, and Germany will be its largest victim. Economies grow, driven by capital and labour. The ECB monetary policy is currently providing the German economy with enough funds, but the country is experiencing a catastrophic lack of youth, and its ageing labour force is not being replaced as a result of which workforce is already in short supply. Since the German population is declining at a staggering pace, before the end of the century there will only be 22 million indigenous Germans left. Currently the working population has already begun to shrink. This drop is still moderate compared to what will come after 2020.

The disappearing of the nation that has just begun will have catastrophic consequences. The German government recorded a large budget surplus last year, a sign that the authorities are not willing or able to invest in their own country. Germany lacks health care professionals, road construction workers and teachers, but allocating more tax money to this sector makes no sense because there are simply no people available. For that reason road construction sites have come to a standstill and road maintenance is postponed. In order to find consumers and labourers, the German industry is investing in new factories abroad.

In the past, the German economy was able to attract employees from Southern, Eastern and Central Europe, but at present the demographic situation in states such as Spain, Portugal, Italy and Poland – which have long provided Germany with workforce – has worsened, so for all practical purposes these sources of labour have all but dried out. Poland for instance has lost a large number of young people to the West European labour market and the loss has not been made good because of extremely low fertility.The financial sector depends on a growing economy, but – apart from periods of temporary increase – there is no significant growth, and banks have to unwind their positions by selling their assets and returning cash to their clients. When the ageing population tries to sell its investments – stocks, obligations or companies – after 2020 they will find a declining working age population that is willing and able to buy these assets. It is already difficult for German business owners to find successors.

Tragic species, mankind.

• Fishing Boat Caught With Illegal 18-Mile-Long Nets (Ind.)

A fishing ship carrying 600 illegal nets stretching up to 18 miles has been seized after it escaped Chinese authorities, while using the flags of eight different countries to evade capture. The vessel, STS-50, had targeted a cod species called Antarctic toothfish that plays an important role in the Southern Ocean ecosystem, according to Indonesia‘s fisheries ministry. Its hundreds of gillnets had walls of fine mesh and could expand to a distance of 18 miles. Gillnetting has been banned in Antarctic waters since 2006 and is described by Australia as posing a “huge risk to almost all marine life, including marine mammals due to [its] indiscriminate nature”.

The use of the nets also harm seabirds including endangered albatrosses, the country’s environment department said on its website in 2011. Indonesia was acting on a request from Interpol when it seized the officially stateless craft. It had eluded authorities by flying eight different flags at different times, including those of Sierra Leone, Togo, Cambodia, South Korea, Japan, Micronesia and Namibia, the ministry said in a statement. Interpol contacted Indonesia last week with a request to investigate the vessel, fisheries minister Susi Pudjiastuti said in the statement. “Navy ship Simeuleu conducted a ‘stop, investigate and detain’ operation on Friday and successfully seized the vessel,” she said.

The STS-50 had previously been detained by China, but escaped and was caught in the port of Maputo in Mozambique before fleeing again, Ms Pudjiastuti said. Prior to its capture off the Indonesian island of Weh in the northwestern province of Aceh, the vessel had also operated under several other names including Sea Breeze, Andrey Dolgov, STD No. 2 and Aida, the statement said. Shipping data in Thomson Reuters Eikon shows the 54m-long, 452-tonne vessel was built in 1985.

Debt Rattle April 8 2018

Apr 082018

April 8, 2018 Posted by Raúl Ilargi Meijer at 9:10 am Finance Tagged with: bollworm, cannabis, Facebook, gene editing, Messenger, Minsky, opioids, pesticides, shadows, Skripal, Treasuries 7 Responses »

Johannes Vermeer The Concert 1663
Stolen from Gardner Museum March 18 1990, the single largest art theft in the world. Never recovered

• Richest 1% On Target To Own Two-Thirds Of All Wealth By 2030 (G.)

• Britain Aims To Resettle Poisoned Russian Ex-Spy In The US (R.)

• Facebook Admits To Deleting Messages From People’s Inboxes (Ind.)

• Facebook Confirms It Scans What You Send To Others On Its Messenger App (BBG)

• US Homeland Security Database Of Journalists, Bloggers, Media Influencers (JT)

• China Cannot Use Its Treasury Holdings As Leverage. Here’s Why (EH)

• Australia’s Central Bank Frets Over Chinese Shadow Banking (CBN)

• China Risks A ‘Minsky Moment’ (Auerback)

• No Brexit for a Eurozone Britain? (Varoufakis)

• Legalised Cannabis Could Help Solve America’s Opioid Crisis (Ind.)

• US Gene-Editing Ruling Delights Plant Scientists (G.)

• Hybrid Swarm Of ‘Mega-Pests’ Threatens Crops Worldwide (Ind.)

At some point it will stop. But it’s just too tempting.

• Richest 1% On Target To Own Two-Thirds Of All Wealth By 2030 (G.)

The world’s richest 1% are on course to control as much as two-thirds of the world’s wealth by 2030, according to a shocking analysis that has lead to a cross-party call for action. World leaders are being warned that the continued accumulation of wealth at the top will fuel growing distrust and anger over the coming decade unless action is taken to restore the balance. An alarming projection produced by the House of Commons library suggests that if trends seen since the 2008 financial crash were to continue, then the top 1% will hold 64% of the world’s wealth by 2030. Even taking the financial crash into account, and measuring their assets over a longer period, they would still hold more than half of all wealth.

Since 2008, the wealth of the richest 1% has been growing at an average of 6% a year – much faster than the 3% growth in wealth of the remaining 99% of the world’s population. Should that continue, the top 1% would hold wealth equating to $305tn (£216.5tn) – up from $140tn today. Analysts suggest wealth has become concentrated at the top because of recent income inequality, higher rates of saving among the wealthy, and the accumulation of assets. The wealthy also invested a large amount of equity in businesses, stocks and other financial assets, which have handed them disproportionate benefits.

New polling by Opinium suggests that voters perceive a major problem with the influence exerted by the very wealthy. Asked to select a group that would have the most power in 2030, most (34%) said the super-rich, while 28% opted for national governments. In a sign of falling levels of trust, those surveyed said they feared the consequences of wealth inequality would be rising levels of corruption (41%) or the “super-rich enjoying unfair influence on government policy” (43%).

Once they have new identities, nobody can ever ask them a question again.

• Britain Aims To Resettle Poisoned Russian Ex-Spy In The US (R.)

Britain is considering offering poisoned Russian ex-spy Sergei Skripal and his daughter Yulia new identities and a fresh life in the United States in an attempt to protect them from further murder attempts, the Sunday Times newspaper reported. It said officials at the MI6 intelligence agency have had discussions with their counterparts in the CIA about resettling the victims poisoned last month in the English city of Salisbury. “They will be offered new identities,” it quoted an unidentified source as saying.

The paper said its sources believed Britain would want to ensure their safety by resettling them in one of the so-called “five eyes” countries, the intelligence-sharing partnership that also includes the United States, Canada, Australia and New Zealand. “The obvious place to resettle them is America because they’re less likely to be killed there and it’s easier to protect them there under a new identity,” it quoted what it called an intelligence source familiar with the negotiations as saying. “There’s a preference for them to be resettled in a five-eyes nation because their case would have huge security implications,” the source added.

Some are more equal than others.

• Facebook Admits To Deleting Messages From People’s Inboxes (Ind.)

Facebook secretly deleted private messages from people’s inboxes that had been sent by CEO Mark Zuckerberg, the company has admitted. Messages disappearing from people’s inboxes was first noted by TechCrunch, who cited three sources whose inboxes had been tampered with. It is not possible for normal Facebook users to delete messages from other people’s inboxes, though Mr Zuckerberg and other executives appear to have had access to the functionality for several years. Facebook said in a statement that the self-destructing feature was added in response to the Sony Pictures hack in 2014 that compromised personal information of Sony employees, as well as copies of unreleased films.

The feature may also have been used to prevent potentially embarrassing messages from resurfacing, such as a 2004 message sent by Mr Zuckerberg that reportedly called users of the social network “dumb fucks” for trusting him with their data. “After Sony Pictures’ emails were hacked in 2014 we made a number of changes to protect our executives’ communications,” Facebook said. “These included limiting the retention period for Mark’s messages in Messenger. We did so in full compliance with our legal obligations to preserve messages.” The messages were also missing when the affected users attempted to recover them using Facebook’s “download your information” tool.

Deleting private messages from people’s inboxes without their consent may potentially go against Facebook’s terms of service, which make no mention of removing content unless it is a violation of the firm’s community standards.

We spy on you for your own good. Trust us, we know better.

• Facebook Confirms It Scans What You Send To Others On Its Messenger App (BBG)

Facebook scans the links and images that people send each other on Facebook Messenger, and reads chats when they’re flagged to moderators, making sure the content abides by the company’s rules. If it doesn’t, it gets blocked or taken down. The company confirmed the practice after an interview published earlier this week with Chief Executive Officer Mark Zuckerberg raised questions about Messenger’s practices and privacy. Zuckerberg told Vox’s Ezra Klein a story about receiving a phone call related to ethnic cleansing in Myanmar. Facebook had detected people trying to send sensational messages through the Messenger app, he said. “In that case, our systems detect what’s going on,” Zuckerberg said. “We stop those messages from going through.”

Some people reacted with concern on Twitter: Was Facebook reading messages more generally? Facebook has been under scrutiny in recent weeks over how it handles users’ private data and the revelation struck a nerve. Messenger doesn’t use the data from the scanned messages for advertising, the company said, but the policy may extend beyond what Messenger users expect. The company told Bloomberg that while Messenger conversations are private, Facebook scans them and uses the same tools to prevent abuse there that it does on the social network more generally. All content must abide by the same “community standards.” People can report posts or messages for violating those standards, which would prompt a review by the company’s “community operations” team.

Automated tools can also do the work. “For example, on Messenger, when you send a photo, our automated systems scan it using photo matching technology to detect known child exploitation imagery or when you send a link, we scan it for malware or viruses,” a Facebook Messenger spokeswoman said in a statement. “Facebook designed these automated tools so we can rapidly stop abusive behavior on our platform.”

When Facebook looks at everybody’s everything, this should come as no surprise.

• US Homeland Security Database Of Journalists, Bloggers, Media Influencers (JT)

The U.S. Department of Homeland Security is looking to create a searchable database of hundreds of thousands of news sources, journalists, bloggers and “media influencers” for the federal government, a move a DHS spokesman called “standard practice.” In a job request posted last week to the Federal Business Opportunities website, the main contracting website used by the federal government, DHS wrote that it is seeking a contractor that is able to monitor up to 290,000 global news sources, track media coverage in up to 100 languages and can “track online, print, broadcast, cable, radio, trade and industry publications, local sources, national/international outlets, traditional news sources, and social media.”

The request also seeks the ability to build lists of journalists “based on beat, location, outlet type/size, and journalist role.” Data to be collected would also include an analysis of each news source’s “sentiment,” as well as geographical spread, top posters, languages, momentum and circulation. The database of “top media influencers” would include “present contact details and any other information that could be relevant, including publications this influencer writes for, and an overview of the previous coverage published by the media influencer.”

Treasuries are the only thing China can buy with its -dollar- surplus.

• China Cannot Use Its Treasury Holdings As Leverage. Here’s Why (EH)

When China builds a trade surplus, it accumulates dollars. And it has to do something with those dollars. That means its purchase of US dollar assets is non-discretionary unless it revalues its currency. Every time there is some kind of dispute between China and the United States, a litany of voices emerges to warn of spiking interest rates. These warnings are wrong-headed. We went through this very same exercise in 2010. And Michael Pettis’s commentary is useful in this context. Let me quote from Michael and explain what it means in today’s context:

“If China runs a current account surplus, it must accumulate net foreign claims by exactly that amount, and the entity against which it accumulates those claims (adjusting for actions by other players within the balance of payments) ultimately must run the corresponding current account deficit. And as long as China ran the largest current account surplus ever recorded as a share of global GDP, and the US the largest current account deficit ever recorded, and especially since China also ran an additional capital account surplus (i.e. other non-PBoC agents ran a net capital inflow), it was almost impossible for the PBoC to do anything but buy US dollar assets. Given the sheer amounts, a substantial portion of these assets had inevitably to be USG bonds.“

The source of acrimony between China and the US is China’s trade surplus with the US. Now, when China builds this surplus, it accumulates dollars. And it has to do something with those dollars. And so, for a large portion of that dollar hoard, the Chinese have decided to store it as Treasury bonds. We don’t have to argue the merits of the Trump trade position here. It’s irrelevant regarding China’s accumulation of Treasury securities or mortgage-backed securities. Note that now it is Germany instead of China that has the largest current account surplus. And the EU has drawn Trump’s ire for this reason.

“..growing at an average annual rate of approximately 40% since 2009”

• Australia’s Central Bank Frets Over Chinese Shadow Banking (CBN)

The Reserve Bank of Australia is concerned that the rapid expansion of China’s shadow banking sector over the past decade poses a threat to financial stability.The RBA estimates that China’s shadow banking sector currently stands at USD$7 trillion, or around 60% of GDP, after growing at an average annual rate of approximately 40% since 2009. This means China’s shadow banking sector is far largely proportionately compared to other emerging economies, and roughly on par with developed nations such as the UK and the US. The RBA points out that shadow banking has brought benefits to the Chinese economy, chief amongst them the provision of more innovative forms of financing to companies otherwise barred from the state-dominated banking system.

Chinese households also benefited by obtaining access to investment products that provide competitive yields, in a highly regulated financial environment that provides few investment options.These benefits have also created problems, however, in the form of surging debt growth beyond the purview of regulatory scrutiny, riskier lending that is still inextricably linked to the Chinese banking system, as well as liquidity and maturity mismatches.These risks have been further exacerbated by the relative inexperience of China’s retail investors, and the perception that many financial instruments such as bank wealth management products enjoy “implicit guarantees. ”Beijing is well aware of the risks associated with exorbitant debt growth via shadow banking activity, launching a crackdown on the sector over a year ago as part of a broader deleveraging campaign.

The recently merged banking and insurance regulator has also flagged a continued focus on local government and state-owned enterprise leverage, alongside concern over the rapid increase in household borrowing.According to RBA analysts, however, Chinese regulators are still struggling to control breakneck credit growth in the economy.“Chinese regulators have been trying to mitigate these risks for some time, but it has been a challenge to design regulations that address these risks and are not easily circumvented,” said RBA officials in the Australian central bank’s March bulletin. In January China posted record growth in lending, which surged to 2.9 trillion yuan (approx. USD$458.5 billion) for a five-fold increase compared to the preceding month.

What Xi can’t control.

• China Risks A ‘Minsky Moment’ (Auerback)

The transformation of China’s economy, both in terms of GDP growth rate and poverty reduction since it started its transition to the market system in the late 1970s, has arguably been the biggest macroeconomic event of the past half-century. The model that has characterized the country’s high output growth rates has followed in the footsteps of the Asian “tigers“: first, its high growth rates of capital accumulation, driven by high investment-output ratios; second, a marked outward orientation through export-led growth policies; and third, the pursuit of industrialization (in particular the production and export of manufacturing goods), a key ingredient for fast growth and development. By almost every metric, China has advanced from economic backwater to the world’s second-largest GDP (and by some measures, is now the largest economy).

But in spite of signs of renewed economic activity in March, the country’s debt build-up has provoked increasing concern amongst Beijing’s policy makers, as it points to an underlying long-term financial fragility, particularly if trade war pressures intensify. Just last October during the Communist Party Plenary, Zhou Xiaochuan, then head of the country’s central bank, warned of a “Minsky moment“: “When there are too many pro-cyclical factors in an economy, cyclical fluctuations will be amplified. If we are too optimistic when things go smoothly, tensions build up, which could lead to a sharp correction, what we call a ‘Minsky Moment’. That’s what we should particularly defend against.”

To elaborate on Zhou’s statement, the economist Hyman Minsky described how once the debt “disease” goes metastatic, there will come a “Minsky moment” (a term originally coined by economist Paul McCulley) when euphoria gives way to concern and then to panic liquidation and credit revulsion. When that dynamic is in full flower, policy makers are powerless to avert it, no matter how much they want to bring the punchbowl back. Governor Zhou’s public warning was no doubt in response to recent rapid increase of debt which, according to Professor L. Randall Wray, “increased from 162% to 260% of GDP between 2008 and 2016,” and remains “a topic of discussion, if not deep concern.”

It may seem odd to warn of a Chinese slowdown, given the recent renewed surge in exports and the corresponding rise in both the manufacturing and non-manufacturing purchasing managing indices (both the manufacturing and service gauges remain above 50, and therefore indicative of robust economic activity). But these gains ought to be viewed against the backdrop of a more hostile external environment for Chinese manufactured goods. Discussing the recently imposed tariffs on steel and aluminum, the New York Times reported that Trump has already provided brief exemptions to “Canada, Mexico, the European Union, Australia, Argentina, Brazil and South Korea” (countries that “account for more than half of the $29 billion in steel sold to the United States in 2017”), which reinforces the idea that it is largely China that remains the major target of Trump’s economic nationalists.

A nice thought experiment.

• No Brexit for a Eurozone Britain? (Varoufakis)

“You can check out any time you like, but you can never leave.” Prior to the 2016 Brexit referendum, I borrowed this line from the Eagles’ 1976 hit “Hotel California” as an argument against Britain exiting the European Union. I told audiences up and down Britain that if they voted to leave the EU, they would end up more entangled with the EU Commission than ever before. As British Prime Minister Theresa May is finding out, disentangling a member state from the EU is an arduous and complex undertaking. But how much harder would Brexit have been had the United Kingdom adopted the euro back in 2000?

For starters, the people of Britain would never have been consulted on whether they wanted to check out of the EU. In a hypothetical eurozone Britain, the very announcement of a referendum on membership would have triggered a bank run. Given Britain’s chronic trade and current-account deficits, an exit from the euro would have necessarily caused a decline in the international value of UK bank deposits. Foreseeing this, depositors would have responded to the announcement of a referendum by immediately withdrawing their euros in cash or by wiring them to Frankfurt, Paris, New York, or elsewhere. And, foreseeing that reaction, no British prime minister, not even David Cameron, would have dared announce a Brexit referendum.

Looking further back, what would the effect of 16 years in the eurozone have been on the relative strength of Leavers and Remainers within the Conservative Party? What would Britain’s economic circumstances have been like prior to 2016 had the euro been the UK’s currency? Would the political pressure to hold the referendum in 2016 have been weaker had Britain shared the same currency as Germany, France, and Greece? As with all counterfactuals, we are treading on thin ice here. Nevertheless, it is not difficult to sketch a plausible economic past for a UK that, hypothetically, entered the eurozone in 2000.

Time to follow the money on pot.

• Legalised Cannabis Could Help Solve America’s Opioid Crisis (Ind.)

Legalised cannabis use may help solve America’s opioid crisis, two scientific studies have suggested. Two separate peer-reviewed studies in the journal JAMA Internal Medicine found significant drops in opioid prescribing in US states that had relaxed their cannabis laws. Both studies appear to offer insights into possible ways to solve a crisis that saw 17,087 people die from prescription opioid overdoes in the US in 2016. The crisis has its origins in soaring prescription rates after a new generation of opioids were marketed in the 1980s and 1990s with inaccurate claims that they could alleviate chronic pain with minimal risk of addiction.

The new research was accompanied by an opinion piece in JAMA Internal Medicine which said both studies produced “results suggesting that cannabis legalisation may play a beneficial role in the opioid crisis”. In the first study, researchers at the University of Georgia, Athens, looked at Medicare Part D prescriptions for people over the age of 65 between 2010 and 2015. It found that prescriptions for all opioids decreased by 2.11 million daily doses per year from an average of 23.08 million daily doses per year when a state instituted any medical cannabis law. When a state opened marijuana dispensaries, opioid prescriptions dropped by 3.7 million daily doses per year.

Loophole. And a dangerous one.

• US Gene-Editing Ruling Delights Plant Scientists (G.)

Researchers in the US have been given the go-ahead to use gene-editing techniques to alter crops and plants. The decision opens the door for scientists to create a new generation of genetically altered crops without serious restriction and paves the way for approvals for similar work in Britain and the rest of Europe. The decision – by the US Department of Agriculture – has delighted scientists who had feared that limitations on the creation and growing of genetically modified crops would also be imposed on crops created using far simpler gene-editing techniques. “I think this decision by American legislators will have all sorts of benefits in the long run,” said Professor Denis Murphy of the University of South Wales.

“This is a win-win situation because agriculture for gene-editing is cheaper, faster, simpler and more precise than the genetic modification of plants, in which a gene is taken from one organism and moved to another.” The European Court of Justice indicated in January that it does not think crops created though gene-editing techniques should be regulated by the rules that govern genetically modified organisms in Europe. “At the same time, Britain’s Acre – the advisory committee on releases into the environment – also seems to be sympathetic to this position,” said Professor Huw Dylan Jones of Aberystwyth University. “It is very encouraging.”

In the wake of hostile green campaigns, Britain imposed severe restrictions on GM crops two decades ago and few have been grown. The prospect that this fate would also befall plants created by the newer and simpler technique of gene-editing worried many researchers who feared a technology at which Britain excels would be banned. These fears are now disappearing, they say. “If we have our own domestic gene-editing industry then scientists trained at our universities will have something to work on here when they qualify,” said Murphy. “At present, our young scientists have to go to work in another country if they want to continue working on the topic.”

Gene-editing could lead to the development of domestic crops particularly suited to Britain, said Dylan Jones. “Loliums and clovers that are good for grazing could be improved to make them more hardy, for example,” he said. “It is very hopeful.” Genetically modified crops are generated through the introduction of foreign DNA sequences. Gene-edited crops are created by editing an organism’s native genome. Gene-editing is more efficient, cheaper, quicker and more precise. By altering the DNA make-up of a gene the characteristics of a cell or an organism can be changed.

I don’t like calling living creatures ‘pests’, and the tone here is a bit sensational, but the core is resistance against pesticides. We must stop poisoning nature.

• Hybrid Swarm Of ‘Mega-Pests’ Threatens Crops Worldwide (Ind.)

A pair of major agricultural pests have combined to produce a “mega-pest” that could threaten crops around the world. Losses from the original pest species, cotton bollworms and corn earworms, already amounts to billions of dollars worth of food. But a hybrid of the two, shows signs of rapidly developing resistance to pesticides and it scientists fear it could cross international boundaries undetected, wiping out all the crops it comes across. Bollworms and earworms are closely related. The bollworm has its origins in Africa, Asia and Europe while the earworm is a native of the Americas. Both are in fact moth caterpillars and they feed on more than 100 plant species including vital crops like corn, cotton, tomato and soybean.

A team of Australian scientists who discovered the hybrid mega-pests think the combination of international species could be creating a new strain with unlimited geographical boundaries. It is impossible to tell which individuals are hybrids just by looking at them, meaning by the time the hybrids have been detected it may be too late. [..] In Australia, a combination of pesticides is currently being employed to manage the nation’s bollworms, but chemical resistance is a major cause for concern. Bollworms are generally better at developing resistance than their earworm cousins, and are immune to the effects of many major insecticides.

However, within the “hybrid swarm” they studied in Brazil the scientists found creatures that were largely earworm in their genetic makeup, but with bollworm DNA coding for pesticide resistance. The scientists warned that the Brazilian case highlighted the threat that new “agriculturally problematic” strains of pest could soon spread throughout the rest of the Americas. “On top of the impact already felt in South America, recent estimates that 65% of the USA’s agricultural output is at risk of being affected by the bollworm demonstrates that this work has the potential to instigate changes to research priorities that will have direct ramifications for the people of America, through the food on their tables and the clothes on their backs,” said Dr Craig Anderson, one of the study’s authors.

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