Jun 112020
 


Cy Twombly Achilles’ Shield 1978

 

Virtue signaling in the US of A has already reached new heights, and there’s little reason to believe it won’t reach even much higher as we happily signal along. In the process, we will find that applying logic to the undertaking will take us to unanticipated, and highly undesirable (for most protesters), places. But by then a lot of damage, whether we think that’s a good thing or not, will have been done.

HBO opened a Pandora’s Box all of its own when it pulled Gone With the Wind, despite that fact that Hattie McDaniel was the first black American Oscar nominee AND winner. Let’s erase that too. Along with ALL other films that depict slavery in the “wrong” light, or, better yet, that depict slavery at all.

Let’s ban all links to slavery, let’s pretend it never existed, because if we don’t we will find it’s impossible to decide between what we do and do not want to last. not all people have the same preferences or opinions, and neither do all black people.

And while we’re talking movies, and Columbus statues are toppled across the nation because Christopher (before there were any “Americans”) treated indigenous Americans poorly, do let’s ban all Hollywood westerns in which “Indians” are depicted as cannon fodder. No more John Wayne for you. Gone even the few non-westerns Wayne appeared in, because his name and face are forever linked to killing “Indians”. No more Duke.

 

And why stop there? Just to name an example, Harper Lee’s To Kill a Mockingbird, arguably a great book and a good movie, depicts a white man “being compassionate” to a black man oppressed by other white men. Can’t have that, the oppression is obviously racist and so is the good(!) white(!) man who’s the protagonist of the story, written by a white woman(!).

Let’s leaf through all American and other world literature of the past half millennium that describes slavery, including that which talks about “good white” men. There are no good white men!

Anything to do with native Americans must go. Because they were badly treated throughout the 500 years of history they share with white people (Europeans). They still are, just like African Americans. Same difference. Phillis Wheatley, Harriet Beecher Stowe, Alice Walker, Toni Morrison? Don’t think so. They were all talking about slavery. And we’re toppling statues in order to stop that talk.

Frederick Douglass? You got to be kidding. His autobiography is called “Narrative of the Life of Frederick Douglass, an American Slave“. Isn’t that enough to topple him? James Baldwin, Ralph Ellison, they all remind us of a period we don’t want to be reminded of anymore. It’s enough! No more slavery!

Martin Luther King? Get serious, he talks about nothing but oppression. He even claims black people in his lifetime were still slaves. Muhammad Ali is obviously not welcome anymore, he spoke just about exclusively from the viewpoint of an oppressed man.

 

Washington, D.C. is the capital of the United States of America. George Washington was a slaveholder, he’s obviously out. D.C. stands for District of Columbia, named after Columbus, so that needs a new name. The country gets its name from a Columbus contemporary and fellow explorer who was a slave holder and treated indigenous populations of the countries he “visited” no better than Columbus did. Wikipedia:

Amerigo Vespucci wrote his will in April 1511. He left most of his modest estate, including five household slaves, to his wife.


[..] After Hispaniola they made a brief slave raid in the Bahamas, capturing 232 natives and then returned to Spain.

There once was a time when Washington, D.C. was the capital of the United States of America. But those days must soon be gone. How can you hold on to a name for your capital city that belongs to a man who was a brazen slave holder? Or the district the capital is in? And how can you breathe in a country named after a despicable Italian slaveholder and slave trader?

The US constitution was largely written by slave holders. We’re going to need a new one.

 

 

There are 1747 “symbols of the Confederacy” in the US. I’m guessing Pelosi, once those 11 statues at the Capitol have been toppled, will start work on getting rid of the other 1736 too. And mind you, this doesn’t yet include Columbus, Vespucci, or anyone else who’s “mistreated”, enslaved, murdered, native Americans. We will easily have twice the 1747 number once we include those.

For that matter, if you’re Nancy Pelosi, how and why do you dress up in the “kente cloth” fabrics that originate with the Asanthi people that ruled in present-day Ghana from mid-1600s to mid-1900s, and were themselves … slaveholders and slave traders? Who sold god knows how many African slaves to European slave traders? How can you dress up in the garb of slave traders to protest the mistreatment of the grandchildren of slaves? Short circuit? Temporary?

 

 

For all the protesters other than Pelosi, who herself obviously joined in only for political reasons, here’s a question: Do you oppose slavery, or only slavery on US soil? Because, you know, the Romans had slaves, many African tribes had slaves, present day Chinese people did. Australia? Slave country if I ever saw one. The deeper you dig into history, the more you will find. I don’t want to bore you with an extensive list, because it would be too extensive.

 

 

Or maybe a second question, though it has mostly already been answered: Is this protest only about slavery, or about the oppression of people(s) in general? It’s already been answered in toppling the Columbus statues, since Christopher was not a slavetrader as far as we know, so, see above, we’re talking about both “indians” and “negroes”.

I use both derogatory terms on purpose, precisely because they paint the picture of what things used to be like. That they are no longer tolerated tells a story all by itself. And yes, much more is needed, but can that be achieved by toppling statues and banning books and movies? Is that how those two terms were banned?

We cannot escape our past and probably that’s the reason we shouldn’t try. What we need to do, what our role in the story is, is to not follow in the “footsteps of wrong”, and to do better. Do we have a better chance at doing better and escaping “wrong” if and when we ban all symbols of it, so we can no longer see it?

Or is our best chance to let all these things last so we can point at them to say: that is wrong!? If all the statues and books and movies are gone, how will our children know?

And I haven’t even mentioned the music yet, the unique melting pot of European melodies and African beats that gave the world blues and jazz and rock, all born from the plantation life that so many stories depict, and the music itself, growing under the statuesque eyes of the likes of Jefferson Davis or George Washington.

Maybe if you like your blues and jazz and rock and rap, you should call for the statues and books to remain standing, because without the narratives they bear witness to, there would be no blues, or anything that came after. Maybe you should celebrate your ancestors’ genius that gave America (or whatever you wind up calling it soon) its music, which, accidentally, has conquered all the countries of all the slavetraders of the past.

Maybe the music, the books, represent your ancestors’ victory over their oppressors, and maybe you risk tainting that hard-fought victory by trying to erase the memories of those they fought against to attain it.

And no, you can’t just pick the books and statues and music you would like and dump everything else. It doesn’t work that way. Your neighbor might have slightly different criteria and pick other favorites, and so on.

You can’t say we’ll hold on to Toni Morrison and throw out Harper Lee, you can’t dump Gone With the Wind but keep Guess Who’s Coming to Dinner, because each of these are part of the exact same story.

It’s a package deal, called history. And you’re not going to get the best end of that deal by pretending history doesn’t exist.

 

 

 

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Jun 112020
 


Banksy Bataclan emergency door 2018 (was stolen in 2019, recovered yesterday)

 

Pelosi Urges Confederate Statues Be Removed From Capitol (AP)
Statues of Christopher Columbus Toppled Across The US (CNN)
Walmart To Stop Keeping ‘Multicutural’ Beauty Products In Locked Displays (R.)
Latin America Hits 70,000 Pandemic Deaths, Daily Record In Mexico (R.)
BHP To Destroy At Least 40 Aboriginal Sites, Up To 15,000 Years Old (G.)
Rio Tinto Destroys 46,000-Year-Old Aboriginal Site: ‘Misunderstanding’ (G.)
Arrival Of Million By Sea Adds To UK Quarantine Doubts (Times)
UK Economy Likely To Suffer Worst COVID19 Damage – OECD (G.)
Fed Vows To Support US Economy’s ‘Long Road’ To Recovery After Dire 2020 (R.)
US Housing ‘Apocalypse’ Coming As Coronavirus Protections Expire (CNBC)
Amazon Bans Police Use Of Facial Recognition Tech – For A Year (BBC)
The Elevator Arises As The Latest Logjam In Getting Back To Work (KHN)
Lilly COVID19 Treatment Could Be Authorized For Use As Soon As September (R.)
Germany Takes In Another 249 Refugee Children From Greece (K.)
FBI Knew Steele Dossier Linked To Clinton, Dems From The Start (JTN)

 

 

Worldometer reports new cases for June 9 (midnight to midnight GMT+0) at + 134,705. A new record.

My count from about 6 am EDT to 6 am EDT is about + 138,341 cases.

New deaths also rose from + 5,032 to + 5,165 (my count + 5,348)

US passed 2,000,000 cases.

 

 

 

 

New cases past 24 hours in:

• US + 20,852
• Brazil + 33,100
• Russia + 8,779
• India + 12,375
• Pakistan + 5,834
• Chile + 5,737

 

 

Cases 7,482,561 (+ 138,341 from yesterday’s 7,344,220)

Deaths 419,488 (+ 5,348 from yesterday’s 414,140)

 

 

 

 

 

From Worldometer yesterday evening -before their day’s close-:

 

 

From Worldometer:

 

 

From COVID19Info.live:

 

 

 

 

Pelosi’s Box. She has no idea. She’s only focused on beating Trump.

Pelosi Urges Confederate Statues Be Removed From Capitol (AP)

House Speaker Nancy Pelosi is demanding that [11] statues of Confederate figures such as Jefferson Davis be removed from the U.S. Capitol. In a letter, Pelosi told a House-Senate committee with jurisdiction over the controversial topic that Confederate statues “pay homage to hate, not heritage. They must be removed.” The California Democrat made the announcement on the very day President Donald Trump vowed on Twitter that he would not rename military bases honoring Confederate generals. Only a short time before Pelosi’s statement, NASCAR announced it would ban displays of the Confederate flag at its races. Confederate monuments have reemerged as a national flash point since the death of George Floyd [..]

Protesters decrying racism have targeted Confederate monuments in multiple cities, and some state officials are considering taking them down. Pelosi lacks the authority to order the removal of the 11 Capitol statues honoring Confederates but is urging the little-noticed Joint Committee on the Library to vote to remove them. Senate Republicans share jurisdiction. “The statues in the Capitol should embody our highest ideals as Americans, expressing who we are and who we aspire to be as a nation,” Pelosi wrote. “Monuments to men who advocated cruelty and barbarism to achieve such a plainly racist end are a grotesque affront to these ideals.” The presence of statues of generals and other figures of the Confederacy in Capitol locations such as Statuary Hall — the original House chamber — has been offensive to African American lawmakers for many years.

Former Rep. Jesse Jackson Jr., D-Ill., was known to give tours pointing out the numerous statues. But it’s up to the states to determine which of their historical figures to display. Jefferson Davis, a former U.S. senator from Mississippi who was president of the Confederate States of America, is represented by one of two statues from that state. Pelosi noted that Davis and Confederate Vice President Alexander Stephens, whose statue comes from Georgia, “were charged with treason against the United States.” “Several states have moved toward replacing statues and others appear headed in the same direction. This process is ongoing and encouraging,” said Sen. Roy Blunt, R-Mo., chairman of the Library Committee. “As Speaker Pelosi is undoubtedly aware, the law does not permit the Architect of the Capitol or the Joint Committee of Congress on the Library to remove a statue from the Capitol once it has been received.”

Read more …

Well, let’s see…who’s uncomfortably like Columbus?

Statues of Christopher Columbus Toppled Across The US (CNN)

As racial reckoning occurs across the country following the death of George Floyd, many Confederate statues — which some consider racist symbols of America’s dark legacy of slavery — have been removed. Now, statues of Christopher Columbus, another controversial figure in US history, are also being taken down. There have been three reports of Christopher Columbus statues being tampered with — one thrown into a lake, one beheaded, and another pulled to the ground. Columbus has long been a contentious figure in history for his treatment of the Indigenous communities he encountered and for his role in the violent colonization at their expense. In recent years, many cities and states have replaced Columbus Day with Indigenous Peoples’ Day, in recognition of the pain and terror caused by Columbus and other European explorers.

[..] Elsewhere in the US, about 1,000 people gathered at Byrd Park in Richmond, Virginia on Tuesday, according to CNN affiliate WTVR. The Richmond Indigenous Society said in a tweet ahead of the rally that “we are gathering at Byrd Park to protest yet another racist monument. Christopher Columbus was a murderer of Indigenous people, mainstreaming the genocidal culture against Indigenous people that we still see today. Bring your sage, drum, jingle dress, and mask!”

[..] in Boston, officials removed the Columbus statue located in the city’s North End after it was beheaded Tuesday evening. The statue, which was erected in 1979, had been previously vandalized in 2015, when it was doused in red paint and the words “Black Lives Matter” were spray-painted on the back, CNN affiliate WBZ reported “This particular statue has been subject to repeated vandalism here in Boston, and given the conversations that we’re certainly having right now in our city of Boston and throughout the country, we’re also going to take time to assess the historic meaning of this action,” Mayor Marty Walsh said, according to WBZ.

Read more …

Oh, the webs we weave: “Many companies have issued statements in support of the black community..”

Walmart To Stop Keeping ‘Multicutural’ Beauty Products In Locked Displays (R.)

Walmart Inc will stop keeping personal care products designed for people of color in locked display cases, the retailer said, after the practice drew flak online with many saying it suggested customers for these products cannot be trusted. “We have made the decision to discontinue placing multicultural hair care and beauty products in locked cases,” the company said in an email statement on Wednesday. Walmart said the practice was in place in about a dozen of its 4,700 stores in the United States and the cases were in place to deter shoplifters from products such as electronics, automotive, cosmetics and other personal care products.


[..] The change in Walmart’s policy was prompted by a June 8 CBS News report cbsloc.al/37iJZxv that a Walmart customer had complained of the practice being discriminatory against people of color, while visiting a store in the city of Denver. “The multi-cultural hair care is all locked behind the glass. That’s so ridiculous,” Lauren Epps, a black woman was quoted as saying in the report. Many companies have issued statements in support of the black community, in addition to setting up funds to fight systematic racism. Walmart Chief Executive Doug McMillon has said the company, along with Walmart Foundation, will commit $100 million to create a new center on racial equity.

Read more …

Columbus opened the doors for the conquistadores. 500+ years later, the population still lives that.

Latin America Hits 70,000 Pandemic Deaths, Daily Record In Mexico (R.)

Latin America’s coronavirus crisis reached a grim new milestone on Wednesday with total deaths exceeding 70,000, according to a Reuters count, as Mexico hit a daily record for confirmed infections. Brazil, with the largest economy in the region, remains Latin America’s most affected country as total fatalities are just shy of 40,000, the world’s third highest death toll after the United States and Britain. In the region’s second biggest country Mexico, a new daily record of 4,883 confirmed cases was reported by the health ministry, along with 708 additional fatalities.


The daily totals bring Mexico’s overall official count to 129,184 infections and 15,357 deaths. The World Health Organization has determined that Latin America is the new hotspot for the pandemic, which began around the beginning of the year in China and quickly spread to Europe and beyond. Governments across the globe acknowledge that the real number of infected people is significantly higher than the official counts. Latin American fatalities attributed to the highly-contagious Covid-19 respiratory illness caused by the virus stand at 70,972, while total infections are at 1.45 million.

Read more …

And talking about slavery and the mistreatment of indigenous people…

BHP To Destroy At Least 40 Aboriginal Sites, Up To 15,000 Years Old (G.)

Mining giant BHP Billiton is poised to destroy at least 40 – and possibly as many as 86 – significant Aboriginal sites in the central Pilbara to expand its $4.5bn South Flank iron ore mining operation, even though its own reports show it is aware that the traditional owners are deeply opposed to the move. In documents seen by Guardian Australia, a BHP archaeological survey identified rock shelters that were occupied between 10,000 and 15,000 years ago and noted that evidence in the broader area showed “occupation of the surrounding landscape has been ongoing for approximately 40,000 years”. BHP’s report in September 2019 identified 22 sites of artefacts scatters, culturally modified trees, rock shelters with painted rock art, stone arrangements, and 40 “built structures … believed to be potential archaeological sites”.


Under section 18 of the Western Australian Aboriginal Heritage Act, the traditional owners – in this case the Banjima people – are unable to lodge objections or to prevent their sacred sites from being damaged. They are also unable to raise concerns publicly about the expansion, having signed comprehensive agreements with BHP as part of a native title settlement. BHP agreed to financial and other benefits for the Banjima people, while the Banjima made commitments to support the South Flank project. But the Banjima native title holders told the WA government in April they did not want any of the 86 archaeological sites within the project area to be damaged, saying the “impending harm” to the area “is a further significant cumulative loss to the cultural values of the Banjima people”.

Read more …

Autralia is built on its own unique legacy of destruction.

Rio Tinto Destroys 46,000-Year-Old Aboriginal Site: ‘Misunderstanding’ (G.)

The head of Rio Tinto’s iron ore division said he has “taken accountability” for the destruction of a 46,000-year-old Aboriginal heritage site but refused to give a direct answer when asked if the company knew traditional owners did not want the rock shelter destroyed, saying: “clearly, there was a misunderstanding”. In an interview on Radio National on Friday, the chief executive of Rio Tinto iron ore, Chris Salisbury, said it it had “taken accountability” for the destruction of the site, which was one of two destroyed in a blast to expand the Brockman 4 iron ore mine last month. The two sites were located in Juukan Gorge in the Hamersley Ranges, about 300km inland from Karratha in Western Australia’s iron ore rich Pilbara region.


Traditional owners the Puutu Kunti Kurrama and Pinikura people only learned of the planned detonation on 15 May, nine days before it took place. They said the loss was “soul destroying”. Salisbury said the company “regrettably … thought we had a shared understanding with the PKKP about the future of the sites” and would conduct a review to learn “how did this go wrong from our point of view”. He also refused to provide a direct answer when asked if a statement released by the company last week, which suggested the PKKP had only “recently expressed concerns” about the site, was incorrect. It released another statement apologising “for the distress we caused” but not the destruction, on Sunday.

Read more …

No testing, no quarantines. More people than this arrived by air. No testing. Now that they’ve all landed and had the chance to infect Britons, there’s a quarentine.

Arrival Of Million By Sea Adds To UK Quarantine Doubts (Times)

More than 1.1 million people have arrived in the UK by sea since the start of the year without being forced to self-isolate as concerns mount over the government’s quarantine policy. Official figures show that there were 346,000 arrivals in the UK in March and April alone despite concerns over the transmission of coronavirus, casting further doubt over the government’s quarantine policy which was introduced for arrivals this week. The figures include HGV drivers, who are exempt from the quarantine measures, although it is not known how many fell into the category. Since Monday, anyone arriving in the UK by air, sea and through the Channel Tunnel rail link has been forced to spend two weeks in isolation. This includes Britons returning from abroad. The scheme does not apply to people from Ireland.


The quarantine is part of measures aimed at avoiding a second outbreak of Covid-19 but critics have questioned its value months after such curbs were introduced elsewhere. Giving evidence to MPs yesterday, Sir David Skeggs, 72, emeritus professor of epidemiology at the University of Otago in New Zealand, told the home affairs committee: “These border measures would be most effective if they were done very early.” Scientists also told MPs that summer holidays abroad risked a fresh wave of coronavirus infections across Europe. Gabriel Leung, 47, a dean of medicine at the University of Hong Kong, said it would be safest if mass-market tourism was discouraged. “I can’t imagine anybody going on holiday in any kind of destination where you go to enjoy the sun and actually doing very good hand hygiene and putting on a mask,” he said.

Read more …

Forget these predictions. Nobody has a single clue.

UK Economy Likely To Suffer Worst COVID19 Damage – OECD (G.)

Britain’s economy is likely to suffer the worst damage from the Covid-19 crisis of any country in the developed world, according to a report by the Organisation for Economic Cooperation and Development. A slump in the UK’s national income of 11.5% during 2020 will outstrip the falls in France, Italy, Spain, Germany and the US, the Paris-based thinktank said. Germany’s decline in GDP is forecast to be 6.6% this year while Spain’s GDP will fall by 11.1%, Italy’s by 11.3 and France’s by 11.4%. The US, the world’s largest economy, is expected to take a hit of 7.3%. Highlighting the task awaiting the UK government as it seeks to ease the lockdown, the OECD warned that countries forced to impose the most draconian restrictions faced a long haul back to previous levels of activity.

Anneliese Dodds, Labour’s shadow chancellor, blamed the “deeply worrying” OECD forecast on the government’s “failure to get on top of the health crisis, delay going into lockdown and chaotic mismanagement of the exit from lockdown”, which she argued made the economic impact of the crisis worse. Responding to the report, the chancellor, Rishi Sunak, said the UK was suffering “in common with many other economies around the world” and the priority was to “support people, jobs and businesses through this crisis – and this is what we’ve done”.


Britain, which is forecast to post an increase in unemployment to around 9%, could make its situation more difficult if it failed to secure a lasting agreement with the EU on trade and access to the single market, the OECD said. “The failure to conclude a trade deal with the European Union by the end of 2020 or put in place alternative arrangements would have a strongly negative effect on trade and jobs,” it said. Adding to pressure on No 10 to agree concessions with Brussels to secure a Brexit deal amid the economic damage caused by the pandemic, the credit ratings agency Moody’s warned that a no-deal Brexit would “significantly damage the UK’s potentially fragile recovery from its deepest recession in almost a century”.

Read more …

The Fed supports only banks. But Powell can still spout this insulting nonsense. No journalist ever openly disagrees.

Fed Vows To Support US Economy’s ‘Long Road’ To Recovery After Dire 2020 (R.)

The U.S. Federal Reserve on Wednesday signaled it plans years of extraordinary support for an economy facing a torturous slog back from the coronavirus pandemic, with policymakers projecting the economy to shrink 6.5% in 2020 and the unemployment rate to be 9.3% at year’s end. In the first economic projections of the pandemic era, U.S. central bank policymakers put into numbers what has been an emerging narrative: that the shutdowns, restrictions and other measures used to battle a health crisis will echo through the economy for years to come rather than be quickly reversed as commerce reopens.

Some 20 million or more people have been thrown out of work since February, and Fed Chair Jerome Powell acknowledged it could take years for them to all reacquire jobs – an economic blow that is falling heaviest on minority communities at a time when mass protests over police brutality have thrown a new spotlight on racial inequality in the United States. Powell, acknowledging the nationwide demonstrations in his opening remarks at a news briefing, said it was now the Fed’s single-minded mission to bring the job market back to where it was at the end of last year, with the unemployment rate at a record low 3.5% and wage gains accumulating for some of the very same lower-paid workers in the service sector that have suffered most during the recent collapse.


[..] At the median, officials see the unemployment rate falling to 6.5% at the end of 2021 and 5.5% at the end of 2022 – still a full 2 percentage points above where it was at the end of last year, representing millions of lost years of work and wages. “The ongoing public health crisis will weigh heavily on economic activity, employment and inflation in the near term and poses considerable risks to the economic outlook over the medium term,” the Fed said in its policy statement. The response has been an unparalleled level of unanimity in the outlook for monetary policy. All 17 current Fed policymakers see the key overnight interest rate, or federal funds rate, remaining near zero through next year, and 15 of 17 see no change through 2022.

Read more …

2 million evictions in the pipeline even before COVID19.

US Housing ‘Apocalypse’ Coming As Coronavirus Protections Expire (CNBC)

Even before the coronavirus pandemic, the U.S. was experiencing what housing experts and advocates deemed an eviction crisis. More than 2 million people face eviction each year, far more than the number of people who faced foreclosure at the height of the 2008 mortgage crisis. Experts expect the eviction crisis to get far worse in the coming months. The Covid-19 economic recession has hit renters especially hard. They make up a disproportionate share of service sector jobs, an industry that has been decimated as a result of the coronavirus shutdowns. In fact, between March 25 and April 10 of this year, nearly half of renters aged 18 to 64 reported that they were having trouble paying their rent or utilities, were food insecure or couldn’t afford needed medical care, according to the Urban Institute.

Thousands of tenants have been missing rent payments over the past few months. People of color have fared worse than white renters due to the disproportionate job loss in their communities, the Urban Institute reports. About 25% of black and Latino renters reported not paying or deferring rent in May, compared to 14% of white renters. To keep people in their homes, the federal government banned evictions in federally assisted properties through July 25, and some cities and states, including Massachusetts, New York and Michigan, put their own temporary eviction moratoriums in place. But many of those bans begin expiring this month depending on the state, according to Princeton University’s Eviction Lab, which tracks evictions across the country.

Plus, the extra $600 per week in federal unemployment benefits is set to expire at the end of July. That extra money is “what has been allowing many people who have lost their jobs to continue paying rent,” Solomon Greene, a senior fellow in housing policy at the Urban Institute, tells CNBC Make It. Coupled with the end of eviction moratoriums, the U.S. is likely to experience an uptick in evictions nationwide in the coming weeks. Evicting people in the middle of a global health crisis puts them at greater risk of contracting and spreading Covid-19, turning “a catastrophe into an apocalypse,” Aaron Carr, founder and executive director of the Housing Rights Initiative, tells CNBC Make It. “A lot of people could be on the streets,” says Carr. “Especially in places like New York City that already have a homeless problem, it could turn into a homeless nightmare.”

Read more …

For a year. That’s all you need to know. About a company that has rich contracts with US intelligence,

Amazon Bans Police Use Of Facial Recognition Tech – For A Year (BBC)

Technology giant Amazon has banned the police from using its controversial facial recognition software for a year. It comes after civil rights advocates raised concerns about potential racial bias in surveillance technology. This week IBM also said it would stop offering its facial recognition software for “mass surveillance or racial profiling”. The decisions follow growing pressure on firms to respond to the death in police custody of George Floyd. Amazon said the suspension of law enforcement use of its Rekognition software was to give US lawmakers the opportunity to enact legislation to regulate how the technology is employed.


“We’ve advocated that governments should put in place stronger regulations to govern the ethical use of facial recognition technology, and in recent days, Congress appears ready to take on this challenge,” Amazon said in a statement. “We hope this one-year moratorium might give Congress enough time to implement appropriate rules, and we stand ready to help if requested.” However, the company said that it would still allow organisations that deal with human trafficking to use the technology. Like other facial recognition products, Amazon’s Rekognition can use Artificial Intelligence (AI) to very quickly compare a picture from, for example, an officer’s phone camera and try to match it with mugshots held on police databases that can hold hundreds of thousands of photos.

Read more …

You mean, that wasn’t obvious yet? Sometimes you guys surprise me.

The Elevator Arises As The Latest Logjam In Getting Back To Work (KHN)

When the American Medical Association moved its headquarters to a famous Chicago skyscraper in 2013, the floor-to-ceiling views from the 47th-floor conference space were a spectacular selling point. But now, those glimpses of the Chicago River at the Ludwig Mies van der Rohe-designed landmark, now known as AMA Plaza, come with a trade-off: navigating the elevator in the time of COVID-19. Once the epitome of efficiency for moving masses of people quickly to where they needed to go, the elevator is the antithesis of social distancing and a risk-multiplying bottleneck. As America begins to open up, the newest conundrum for employers in cities is how to safely transport people in elevators and manage the crowd of people waiting for them.

If office tower workers want to stay safe, elevator experts think they have advice, some practical, some not: Stay in your corner, face the walls and carry toothpicks (for pushing the buttons). Not only have those experts gone back to studying mathematical models for moving people, but they are also creating technology like ultraviolet-light disinfection tools and voice-activated panels. “When there is risk of disease spreading from human to human, continuing to maintain a clean and safe vertical transportation system is critical to help people return to work and safe living,” said Jon Clarine, head of digital services at Thyssenkrupp Elevator, in an email.

After all, most elevators are inherently cramped, enclosed spaces that can barely fit two people safely spaced 6 feet apart, much less the dozen or more that elevators in commercial and residential buildings were designed to hold. They’re a minefield of buttons and surfaces tempting to touch. Air circulation is limited to what a few vents and the opening doors can manage. Plus, they’re usually mobbed during the morning, lunchtime and evening rushes.

Read more …

If news agencies write this sort of thing, while there are hundreds such products being touted, how is that not stealth advertizing and promotion?

Lilly COVID19 Treatment Could Be Authorized For Use As Soon As September (R.)

Eli Lilly and Co could have a drug specifically designed to treat COVID-19 authorized for use as early as September if all goes well with either of two antibody therapies it is testing, its chief scientist told Reuters on Wednesday. Lilly is also doing preclinical studies of a third antibody treatment for the illness caused by the new coronavirus that could enter human clinical trials in the coming weeks, Chief Scientific Officer Daniel Skovronsky said in an interview. Lilly has already launched human trials with two of the experimental therapies. The drugs belong to a class of biotech medicines called monoclonal antibodies widely used to treat cancer, rheumatoid arthritis and many other conditions. A monoclonal antibody drug developed against COVID-19 is likely to be more effective than repurposed medicines currently being tested against the virus.


Skovronsky said the therapies – which may also be used to prevent the disease – could beat a vaccine to widespread use as a COVID-19 treatment, if they prove effective. “For the treatment indication, particularly, this could go pretty fast,” he said in an interview. “If in August or September we’re seeing the people who got treated are not progressing to hospitalization, that would be powerful data and could lead to emergency use authorization.” “So that puts you in the fall time: September, October, November is not unreasonable,” he said. Coronavirus vaccines being developed and tested at unprecedented speed are not likely to be ready before the end of the year at the earliest.

Read more …

Out of over 5,000, most of whom have been in Greece for much of their entire lives.

Germany Takes In Another 249 Refugee Children From Greece (K.)

Germany has taken in an additional 249 refugee children from Greece, the country’s interior minister Horst Seehofer said Wednesday, noting that most of the minors are sick or the siblings of migrants that are already in Germany. “As the rates of coronavirus are currently at this low level, we decided as the Interior Ministry… to take in more children from Greece,” Seehofer said, noting that Germany had already received 47 refugee children in April. Seehofer said that some of his associates visited Greece last week to arrange the transfer of the children.


Six of the youngsters who were too sick to travel last week will be transferred on a subsequent trip, he said. “I always said that my migration policy includes order but also humanity,” the German minister said. Luxembourg, Switzerland, Portugal and France are among the countries that have also taken in child refugees from Greece. Many of the children being relocated belong to the ranks of unaccompanied refugee minors in Greece, who number over 5,000.

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Tomorrow’s the DC Appeals Court Michael Flynn hearing. Fireworks.

FBI Knew Steele Dossier Linked To Clinton, Dems From The Start (JTN)

Notes and emails that have been kept so far from Senate investigators show the FBI knew from its earliest interactions with Christopher Steele in July 2016 that his Russia research project on Donald Trump was connected to Hillary Clinton and the Democratic Party. The information, so far mentioned only glancingly and in footnotes of a Justice Department report, could provide the Senate Judiciary Committee with the most powerful evidence yet to confront witnesses about why the bureau concealed the political origins of Steele’s work from the FISA court. “So far the bureau is slow-walking this stuff,” a source familiar with senators’ frustrations told Just the News. “We need to see these sort of documents before we question key witnesses.”

Chairman Lindsay Graham (R-S.C.) is seeking a vote later this week to authorize subpoenas that would compel the Christopher Wray-led FBI to produce witnesses and outstanding documents for the committee’s investigation of the Russia investigators. The effort to acquire the original source materials began last December after DOJ Inspector General Michael Horowitz released his explosive report blaming the FBI for 17 mistakes, omissions and acts of misconduct in seeking a FISA warrant against Trump campaign adviser Carter Page. While the headlines since that report have mostly focused on FISA abuses, Senate investigators have also zeroed in on a handful of little-noticed passages in Horowitz’s narrative that reference original FBI source documents showing what agents and supervisors knew about Steele, the former MI6 agent, and the firm that hired him, Fusion GPS.

It wasn’t until late October 2017 that the public and Congress first learned that the law firm Perkins Coie, on behalf of the Democratic National Committee and Hillary Clinton’s campaign, hired Glenn Simpson’s Fusion GPS research firm to have Steele delve into Trump’s Russia connections. And FBI officials have been vague in their explanations about when they knew Steele’s research was tied to Clinton and the DNC and why they did not explicitly inform the FISA court that the Steele dossier used to secure the warrant was funded by Trump’s election opponent. But one passage and two footnotes in Horowitz’s report that have largely escaped public attention suggest the FBI agent who first interviewed Steele about his anti-Trump research in London on July 5, 2016 was aware immediately of a connection to Clinton and that a separate office of the FBI passed along information from an informant by Aug. 2, 2016 that Simpson’s Fusion GPS was connected to the DNC.

[..] The FBI notes and emails from summer 2016 are consistent with recent testimony that Steele gave in a civil case in London, where he testified he told the bureau his research and the Fusion GPS project was connected to Clinton. “I presumed it was the Clinton campaign, and Glenn Simpson had indicated that. But I was not aware of the technicality of it being the DNC that was actually the client of Perkins Coie,” Steele testified in March under questioning from lawyers for Russian bankers suing over his research. Steele confirmed during that testimony that his notes of a 2016 FBI meeting showed he told agents about the Clinton connection.

Read more …

 

 

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Jan 292018
 
 January 29, 2018  Posted by at 8:02 pm Finance Tagged with: , , , , , , , , , , ,  5 Responses »


Lucien Hervé The Accuser, Delhi, India 1955

 

Tomorrow we have the State of the Union. Donald Trump will be gloating from ear to ear, but he’ll be subdued – by his standards. Expect perhaps $1 or even $1.5 trillion in infrastructure spending to be announced, plus an immigration plan that gives Democrats much of what they want in exchange for some of the things Trump wants, as well as more on trade surpluses and deficits. The Democrats will attempt to turn it into a circus of sorts by bringing guests, and they will fail.

What America needs right now is dialogue, but it’s only moving further away from it. Anything that’s wrong with anything or anyone gets blamed on Trump. By half the population. That’s nice and easy and convenient, but it doesn’t lead anywhere.

This pic, even though it features a very dumb question, says a lot about where the country stands, and it’s not standing pretty. Everybody’s just busy confirming their own opinions 24/7, egged on by networks, newspapers and social media. It’s like Moses split the nation.

 

 

Watched the Trump speech in Davos last week. He made all the points you would expect him to. No scandals, nothing anyone could blame him for. In fact, it’s true that the US economy is doing well, in Trump terms. They’re not my terms, because they laud stock markets that quit being actual markets the moment the Fed and it global brethren killed off price discovery. But in Trump terms a record S&P 500 is all you need to know, alongside low unemployment numbers, even if the latter have everything to do with underpaid shit jobs robbed of all benefits American workers once fought so hard for.

In Trump’s view, that’s a good thing. In mine, it’s a recipe for mayhem. I was watching CNN in the build-up to the speech, and Trump’s denial of the NYT report that he had intended to fire Special Counsel Robert Mueller was completely ignored. Like he never said it. At CNN, anonymous sources have -way- more credibility than the president. That’s a bit of a problem.

After the speech, all sorts of people were interviewed, and Joe Stiglitz of Nobel Memorial fame was one of them. He couldn’t muster anything better than that Trump is a bigot, a misogynist and a racist. That’s a terribly poor reaction to a speech like the one we saw and heard -which included not one word that would make any sane person think of these ‘topics’-, certainly from an economist.

 

The 1-year-old Donald Trump presidency has brought us a lot of new things, but none more significant than that Trump has been under investigation since day 1 (and even before that). This sets a dangerous precedent that will resound through US politics for a very long time to come, not least of all because today, one year into the presidency, none of the investigations has resulted in anything tangible, while they continue without a finish line in sight.

The problem with that is that if you can do it with one president, someone will do it with the next one and the next one after that as well. Which does great damage not to Trump, but to the entire US political system, and the Office of the President of the United States in particular. If the office cannot command sufficient respect on Capitol Hill to limit any such investigation to an absolute minimum, in deference to what it represents, why would anyone else, domestically or abroad, show such respect?

Obviously, some people may claim that the situation is unique, simply because it concerns Trump, but that argument doesn’t fly very far, because he was elected president, the culmination of a process that, given the powers endowed upon the office, should be close to sacred in the country. And if the very people (s)he must most closely work with, in the Senate and the House, are willing to subject a newly elected president to endless investigations without producing any results for a whole year, where and what are the limits?

It is at present of course all based on opaque accusations of the Trump campaign working with Russian intelligence to swing America’s election process in favor of the president. But to date, four different committees on Capitol Hill, plus Special Counsel Robert Mueller, have made nothing public that proves any such ‘collusion’. And Mueller’s investigation is not only unlimited in time, it’s also unlimited, in practical terms, in scope: whatever is deemed even possibly, perhaps, linked to collusion with Russia, goes.

 

The American empire was built, once it had acquired enough geopolitical, financial and military power, on invading countries and turning them into shithouses. It wasn’t and original idea, America wasn’t the first country to do it, but it’s certainly been no. 1 in applying the ‘tactic’ over the past 100 years and change. Which makes it curious that when its own elected president calls some countries shithouses, that is treated like the worst thing anybody could have said anytime in history. And racist too, allegedly.

The entire country was built on racism, and it’s still to his day almost exclusively run by white males. Much of the racism may be hidden by now, but it’s still very much there. Go look at Baltimore, Chicago, Milwaukee, and the long list of black kids killed by white cops. It’s not much use trying to claim that America is over its past. But Trump is singled out as a racist, though it’s unclear what would make him worse than others.

And on Martin Luther King Day, all Democrats and many Republicans fell over each other once again claiming they knew exactly what Dr. King stood for in his days, and what he would have said if he were alive today (the same they thermselves say). They don’t have a clue. The only way to honor MLK is to assume he would have been lightyears ahead of you. To assume he would have condemned all US foreign as well as domestic policy, and the likes of Bill Clinton, both George Bushes, Trump, and even Obama, wouldn’t even have had a remote chance of becoming president.

 

Allegedly Trump never said “shithole countries”, but instead talked about “shithouse countries”. Which would explain why he could say he never used the language he was quoted as having used (“Why are we having all these people from shithole countries come here?”) That a private conversation with lawmakers held in the Oval Office was leaked again within no time will not only frustrate Trump to no end, it also paints a dangerous picture of the future of US politics.

What used to be the exclusive domain of police officers and TV series, the catchy line “anything you say can and will be used against you”, no longer applies only to suspected criminals, from here on in it should be read to American presidents too. Trump and his successors will no longer be able to discuss policy in the White House, they must assume everything they say will be in the press within hours if not minutes. That is dangerous.

But let’s dig some more. And ask ourselves what is worse, let alone more racist: turning nations into shithouses or calling them that after the fact. Half the planet was encouraged to speak out in indignation at the use of the term, but where were all those Americans when the bombs and drones were unleashed upon Syria, Libya, Iraq? Where were the media?

Trump singled out Haiti and El Salvador. Two completely different ‘cases’. But also too complete basket cases (another word for shithouse) , compared to their potential. Haiti was the first slave colony to liberate itself, under black rule. That was in 1804, and if you know what Americans’ view of slaves and black people in general was back then, you can imagine how the former no. 1 global sugar producer was treated. By France, the country that had ruled it, but also by America. And you want to claim Haiti is not a shithouse country today? Go to Port-au-Prince and ask people living in the poor part of town how they feel about that.

As for African countries, the Congo is always a good example. The richest nation on the planet when it comes to natural resources, and one of the poorest when it comes to living standards. Long governed by a regime under Belgium’s King Leopold, matched in cruelty only perhaps by Germany in WWII, the Congo is still maintained as a hellhole to this day. So American and European conglomerates can dig up the metals and minerals almost for free. Not a shithole, a hellhole.

No, Trump is not going to solve that, but he didn’t make it what it is either. Generations of Americans did that. Yeah, we understand why they don’t want it named the way Trump has.

Perhaps the best illustration of how convoluted the entire issue quickly became after Trump said shithouse, which then became shithole, is this LA Times article, which starts out with the headline that Americans with African roots ‘should’ all be insulted, but then rapidly devolves into something else altogether, that insults them a lot more: the history of American involvement in their countries. Slavery, occupation, warfare, plunder.

 

For Black Americans, Trump’s ‘Shithole’ Comment Was An Insult To Their Histories

Kimberly Atkins, the Washington bureau chief of the Boston Herald, recently did a DNA test “that pretty much confirmed my heritage is 100% the result of the slave trade,” she wrote in a private message on Twitter. “Eighty-seven percent from western coastal African countries and 13% European, all migrated by way of the American South.”

She traced part of her heritage to an ancestor who fought in the Union during the Civil War to guarantee his freedom and the abolition of the U.S. slave trade. “My ancestors did not come from shithole countries,” she tweeted. “They were neither tired nor poor. They were forcibly brought here to live in a shithole created for them.”

Trump’s singling out of Haiti was particularly frustrating for descendants from the Caribbean nation, coming as the nation mourned the eighth anniversary of an earthquake that killed hundreds of thousands of residents.

“Haiti is not unacquainted with racists or white supremacists. We defeated our share of them in 1804 when we became the world’s first black republic,” Haitian American author Edwidge Danticat wrote in a post on Facebook, expressing her frustration that Haitians’ mourning was being diverted by an insult from Trump.

Danticat’s father came to Brooklyn, N.Y., to drive a taxicab “sometimes sixteen hours a day, so that my three brothers (two teachers and an IT specialist) and I could have a better life,” Danticat wrote.

Danticat added: “We are also the country that the United States has invaded several times, preventing us from consistently ruling ourselves. If we are a poor country, then our poverty comes in part from pillage and plunder.”

Clint Smith, a writer and PhD candidate at Harvard University specializing in sociology and education, said that he hoped that at least the president’s remarks would prompt a fuller conversation about past U.S. and European involvement with the countries Trump mentioned — countries still troubled by the legacy of colonial rule and military interventions.

“You can’t understand the economic conditions in which Haiti exists now without understanding the centuries and centuries of direct imperialism and violence and economic exploitation that the country experienced after the Haitian revolution of 1804,” Smith said. “We can’t have a real conversation about what is happening, why Salvadorans are coming here, without discussing how the U.S. contributed to the civil unrest in that country.”

The larger conversation, Smith said, “is not often enough taking into account the way that U.S. policy directly contributed to the condition in which so many of these so-called shitholes are currently existing.”

 

The woman who says “My ancestors did not come from shithole countries” says it best. Before the slave traders came to ship their ancestors to Brazil and later America, their countries were not shithouses. But they did become just that after, and many if not most still are now.

From a less echo chamber-confined point of view, this little thingy is priceless:

 

 

That points to an aspect of all this that we can not ignore: the media. There has a been a profound shirt in that field, and it happened fast, it turned on a dime. The first signs were already there before the Trump presidency, but it’s all been going going gone out of the park since. Media organizations (for lack of a better term) like the New York Times, the Washington Post, MSNBC and CNN were anti-Trump from the get-go, but it was when they found out their attitude was commercially very interesting that they really went for it.

And in a way, that made sense; they all had big problems trying to adapt their business models to the internet age. Then they found that publishing one after another anti-Trump piece brought them tons of new subscribers and advertisement revenue. Also for their internet presence. One stone, two birds.

The problem is that all that revenue and readership comes from one half of America, and excludes the other half. You know beforehand that anything these firms publish about Trump will be biased, and not a little bit. Much of it is based on anonymous sources, not exactly a sign of solid journalism. But it sells. And they have a business to run. We get it.

For those outside of the echo chamber, however, they have become largely unreadable and unwatchable. It’s obvious by now that someone like me, who asks a few questions and doesn’t feel comfortable in an echo chamber, will almost of necessity be ‘accused’ of being a Trump supporter. Absolute nonsense, but that’s echo chambers for you. They’re deafening and they lead to brain damage in case of long term occupancy.

Perhaps even worse are social media, where untold numbers of people revel in the notion that many others think like them, and let that carry them away to ‘heights’ they would never have thought possible. In the case of Trump, many allow themselves to call him names -in writing- they never would have dared use before, but they see echoed back to them on Twitter and Facebook et al.

That their often insults of Trump in effect show their disrespect for America’s political system would never occur to them. It’s an us against them battle, and they feel greatly emboldened by the 24/7 presence of those that are like-minded. It’s entirely unclear where this is going in the future, but it should be obvious it won’t be anywhere pretty.

Neither Bob Mueller nor those 4 committees on Capitol Hill have presented anything of substance as of now, but it’s crystal clear that Donald Trump is not being considered innocent until proven guilty. Which not only goes straight against, and into the heart of, American values and principles of justice, it also doesn’t even begin to address the real problem.

The real problem, and it’s not new at all, is that both US political parties might as well be run by Tony Soprano. The presence inside party leadership of people like Steve Wynn is ridiculous, but so is that of John Podesta. That is undoubtedly blindingly obvious for a vast majority of Americans, but it’s not what they focus on. They focus on Trump instead, on the still contagious obsession with impeaching him, even though many understand that wouldn’t solve any of the underlying issues.

 

And then Trump gets to present great economic numbers tomorrow. The numbers are mostly fake, but they’re the same ones that the echo chamber media also use, so they’ll have to tackle him somewhere else. They’ll come up with something, don’t worry. Their audience will just wait to be fed the usual pre-chewed bite-size fare anyway.

America needs a dialogue. But all it has left is loud, echoing, deafening, monologues. And plenty shithouse counties and cities and neighborhoods within its own borders as well. For which, too, it’s useless to blame Trump. He’s just the logical conclusion of years of blindness, ignorance, greed, stupidity and neglect. All of which, as long as everyone focuses on him, are guaranteed to continue.

Trump is not what’s wrong with America. Rather, what is wrong with America is what has given it Trump. Someone asked God for a sign and He said: here you are.

 

 


Little shithouses for you and me

 

 

Nov 292017
 
 November 29, 2017  Posted by at 10:06 am Finance Tagged with: , , , , , , , , , ,  9 Responses »


Claude Monet The Manneporte (Étretat) 1883

 

VIX – From Fear Index To Greed Index (Tchir)
When VIX Trade Finally Blows Up, It Could Get Ugly All Over (MW)
DB’s “2018 Credit Outlook” – Bearish Not Benign Conclusion (ZH)
The GOP Tax Bill: Fuggedaboutit! (Stockman)
Number Of US Store Closings Triples From Last Year (Snyder)
Trump Deserves Some Credit for the Rally in Stocks (A. Gary Shilling)
Fed Chair Nominee Jerome Powell Says Too Big To Fail Is Over (BI)
Britain Close To Deal On Brexit Bill With EU (R.)
Former New Zealand PM John Key Lied About Mass Surveillance Program (NZH)
Senior Saudi Prince Freed In $1 Billion Settlement Agreement (R.)
Europe Needs a Way to Prevent the Next Greek-Style Debt Crisis (BBG)
Controversial Glyphosate Weedkiller Wins New 5-Year Lease In Europe (G.)
New Zealand Fault Line Wakes Up: “We Must Think Japan 2011 Ruptures” (SHTF)
Libya “Chose” Freedom, Now It Has Slavery (CP)
The EU Created Libya’s Migrant Abuses, Now It Must Address Them (CP)

 

 

The crazy idea of ultra low risk will be found out.

VIX – From Fear Index To Greed Index (Tchir)

We have all heard the VIX or volatility index referred to as the Fear Index or Fear Gauge. Rising VIX was meant to signal fear in the markets. That is how most investors have historically thought about VIX and traded it (directly or through Exchange Traded Products). I have gone back in time and combined the total assets under management of XIV and SVXY (two short VIX products) and UVXY and VXX (the two largest long VIX products). There are others and it doesn’t account for the fact that UVXY incorporates leverage, but the point is the same. The funds that in theory helped investors ‘hedge’ their portfolios went from being the dominant species to those that enable investors to sell volatility.


Short VIX Funds are Larger than Long VIX Funds (source Bloomberg)

This has rarely been the case. Typically investors had more interest in hedging their portfolios despite the evidence that the long VIX ETFs and ETNs had to continually perform reverse splits as their share prices drifted lower (some would argue “raced” lower is a more accurate description). While the products looking to benefit on a volatility spike still attract inflows (otherwise their assets under management would be even lower), they have lost the competition to the VIX sellers. The only other gap of similar size and duration was in late August 2015 – AFTER the market sold off and volatility spiked. This time, it is occurring as stock markets are near all-time highs and VIX is still close to the all-time low it set just a few weeks ago (VIX is only calculated since 1990). [..] A spike in volatility could be far more problematic than the market is prepared for as even a small spike could turn into a larger problem with so many people positioned the other way.

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“.. it has the potential to destabilize the entire financial system on its own.”

When VIX Trade Finally Blows Up, It Could Get Ugly All Over (MW)

Bitcoin’s face-melting rally toward $10,000 is the talk of financial circles these days. But if the digital currency is, indeed, the dangerous bubble many believe it to be, its inevitable implosion will pale in comparison to the potential damage caused by the demise of one of the best trades the Wall Street has ever seen: Shorting the VIX. You’d have to be living under a rock — or maybe just a normal person who doesn’t fixate on the stock market — to not notice the incredible lack of volatility in this bull run. This persistent trend has lined the pocket of any investor who’s been savvy/lucky enough to bet against the VIX. Count Seth Golden, a former Target manager, among those fortunate to be on the right side of it. He told the Times this summer his net worth exploded from $500,000 to $12 million in about five years thanks to his VIX shorts. This chart shows insane it’s been:

But all good things come to an end, and when this historic trend finally reverses, the fallout could be devastating. In our call of the day, Kevin Muir of the Macro Tourist blog warns that these people face getting completely “wiped out” when volatility returns to this market. And it won’t end there. “A VIX spike is dangerous not only for everyone that is playing in the VIX square, but for all market participants,” he explained in a recent blog post. “Given the size of the VIX complex, it has the potential to destabilize the entire financial system on its own. If the move is abrupt and large enough, it will not only bankrupt many different parties, but will cause a ripple effect in other markets.”

Muir went on to warn the real worry here is not just that those who have made enormous sums on shorting the VIX are about to give it all back. No, he believes they, as well as many others, stand to lose a whole lot more. “Shorting VIX, at these low levels, in the size they are doing, is not only dumb, but crazily dangerous, not only to the parties trading it, but also to the stability of the entire financial system,” he said.

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How can the VIX remain low in the face of this?

DB’s “2018 Credit Outlook” – Bearish Not Benign Conclusion (ZH)

Heading into 2018, Reid characterises risk assets as a tightrope walker who’s successfully negotiated a hire wire since the 2008 crisis. However, the confidence of our risk asset funambulist was always fortified by the knowledge that there was a huge safety net direct beneath him in the shape of the central bank put. In Reid’s own words. “The best analogy for our view on 2018 is that risk assets are like a highly skilled but still relatively inexperienced tightrope walker. Our tightrope walker started his career immediately after the GFC and earned his apprenticeship in very difficult conditions with lots of crosswinds but with the knowledge that a huge safety net existed beneath him. This allowed him to walk across the narrow line with slow but ever-increasing confidence, skill and aplomb. In our analogy the safety net is the central bank put that has continued to help financial markets’ confidence over the last several years in spite of very challenging conditions.”

As the tightrope walker steps from December 2017 into January 2018, he’s going to notice a disconcerting change in his safety net. “However in 2018 our tightrope walker will have to move onto the next phase of his career where the structural support of the safety net will likely be slowly weakened. Every time he looks down he’ll figuratively see a central banker loosen or take away a supporting rope. As such his skills and confidence are likely to be tested more than in recent years.” Reid is specifically referring to the growth in the size of the big four DM central bank balance sheets, i.e. the Federal Reserve, ECB, Bank of Japan and the Bank of England. At the end of 2017, the combined size of the big four’s balance sheets is estimated to reach about $14.9 trillion, an increase of about $1.8 trillion on the end of 2016. That’s about to change radically, as he notes. “Assuming fairly neutral and consensus assumptions, central bank balance sheet growth will fall sharply over the next 12-24 months from the near peak levels currently seen.”

The chart below shows that on a rolling twelve-month basis, growth will fall sharply, beginning in 2Q 2018. By the end of 2018, DM estimates that the rolling twelve-month growth will have declined about 75% from its 2017 level to about $450 billion. By August 2019, growth will have declined to zero according to DB’s estimate.

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Hope the GOP reads these missives.

The GOP Tax Bill: Fuggedaboutit! (Stockman)

The GOP has become so politically desperate that they might as well enact a two-word statute and be done with it. It would simply read: Tax Bill! Actually, that’s not far from where they are in the great scheme of things. The Senate Finance Committee’s bill is a dog’s breakfast of K-Street/Wall Street pleasing tax cuts, narrowly focused revenue raisers that will be subject to withering attack on the Senate floor, nonsensical vote-driven compromises and outrageous fiscal gimmicks – the most blatant of which is the sun-setting of every single individual tax provision after 2025. This latter trick is designed to shoe-horn the revenue loss into the $1.5 trillion 10-year allowance in the budget reconciliation instruction and also comply with the Senate’s “Byrd Rule” which allows a point of order to strike down a reconciliation bill that increases the deficit after year 10.

Save for these gimmicks, the actual 10-year cost of the Senate bill would be $2.2 trillion including interest on the added deficits. Nevertheless, this and other sunset gimmicks also underscore how threadbare the whole undertaking has become. To wit, the bill provides interim, deficit-financed tax relief of $1.38 trillion during 2018-2025 before these budget gimmicks kick-in, which is not a big number in the scheme of things: it amounts to just 4.2% of current law revenue collections during the eight year period, and only 0.8% of GDP. Since the bill doesn’t even really cut marginal rates during this interim period (the top bracket drops from 39.6% to 38.5%), its hard to see how a mere 0.8% “stimulus” to GDP is going to incite a tsunami of growth and jobs.

As we have frequently pointed out, the Reagan tax cut of 1981 – which had no measureable effect on the trend rate of economic growth – slashed marginal rates from 70% to 50% and as a total package paled the current Senate Plan into insignificance: It reduced the Federal revenue base by 26%, not 4.2%; and it amounted to 6.2% of GDP, not 0.8%, when fully effective in the later 1980s. Moreover, the “fully effective” part is especially salient because the Senate bill’s impact does not widen with time, as do most permanent tax cuts which require phase-in periods, but, instead, shrinks into virtual insignificance. Thus, the bill’s net tax cut amounts to $225 billion or 1.1% of GDP in 2019, but by 2022 the net cut shrinks to $199 billion and 0.9% of GDP – and then to just $145 billion or 0.6% of GDP in 2025 when the sunset gimmick kicks in.

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Changing the landscape.

Number Of US Store Closings Triples From Last Year (Snyder)

Did you know that the number of retail store closings in 2017 has already tripled the number from all of 2016? Last year, a total of 2,056 store locations were closed down, but this year more than 6,700 stores have been shut down so far. That absolutely shatters the all-time record for store closings in a single year, and yet nobody seems that concerned about it. In 2008, an all-time record 6,163 retail stores were shuttered, and we have already surpassed that mark by a very wide margin. We are facing an unprecedented retail apocalypse, and as you will see below, the number of retail store closings is actually supposed to be much higher next year. Whenever the mainstream media reports on the retail apocalypse, they always try to put a positive spin on the story by blaming the growth of Amazon and other online retailers.

And without a doubt that has had an impact, but at this point online shopping still accounts for less than 10% of total U.S. retail sales. Look, Amazon didn’t just show up to the party. They have been around for many, many years and while it is true that they are growing, they still only account for a very small sliver of the overall retail pie. So those that would like to explain away this retail apocalypse need to come up with a better explanation. [..] Of course the truth is that the economy is not doing well. The U.S. economy has not grown by at least 3% in a single year since the middle of the Bush administration, and it isn’t going to happen this year either. Overall, the U.S. economy has grown by an average of just 1.33% over the last 10 years, and meanwhile U.S. stock prices are up about 250% since the end of the last recession.

The stock market has become completely and utterly disconnected from economic reality, and yet many Americans still believe that it is an accurate barometer for the health of the economy. [..] So far this year, more than 300 retailers have filed for bankruptcy, and we are currently on pace to lose over 147 million square feet of retail space by the end of 2017. Those are absolutely catastrophic numbers. And some analysts are already predicting that as many as 9,000 stores could be shut down in the United States in 2018.

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Deregulation.

Trump Deserves Some Credit for the Rally in Stocks (A. Gary Shilling)

Reducing government regulation is tough. It’s resisted by all those who benefit, including government employees who administer the many programs. Every president since Jimmy Carter has attempted to lower the cost of regulation. At best, any cuts have been tiny and mostly centered on trimming paperwork. But less regulation is one campaign promise made by Donald Trump that is coming true. With tax and health-care reform problematic and given the president’s protectionist leanings, deregulation is probably a major driver of the stock market rally. The size and scope of the federal government give the president immense powers. In relation to gross domestic product, federal spending rose from 16% in 1946 to 22% in the 2017 fiscal year. Executive orders give the chief executive, in effect, legislative powers.

President Barack Obama issued many in his waning days, especially affecting power plants and oil pipelines. The Competitive Enterprise Institute last year found regulation cost American businesses $1.9 trillion, dwarfing the $344 billion in corporate taxes. About 56% of CEOs see overregulation as a major threat to their organization, more than cybersecurity (50%), rising taxes (41%) or even protectionism (27%). Whenever a new regulation is made or changed, it must be chronicled in the Federal Register. In the last years of the Obama administration, regulatory activity went parabolic, hitting almost 97,000 pages in a year. The annualized pace under Trump through July 31 was 61,330 pages, the fewest since the 1970s.

This year through June, the federal government had made 1,731 preliminary, proposed or final rules, the least since 2000 and down 40% from the 2011 peak under Obama. Many actions taken under Trump are reversals of earlier rules made under Obama. Of 66 completed actions at the Environmental Protection Agency, a third were rule withdrawals. Shares of banks have benefited, as those with more than $50 billion in assets are now able to merge without increased scrutiny. Scaling back the Volcker Rule would allow big banks to resume proprietary lending. The delay and likely alterations of the fiduciary requirement would aid brokers and insurers. The House has already approved a widespread rewrite of Dodd-Frank.

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I think he meant it.

Fed Chair Nominee Jerome Powell Says Too Big To Fail Is Over (BI)

Jerome Powell, Donald Trump’s nominee to replace Janet Yellen as Federal Reserve Chair, just made a frightening statement that suggests he is far too sanguine about risks in the US and global financial systems. During his confirmation hearing at the Senate on Tuesday, when pressed on the issue of whether any US banks are still considered too big to fail, Powell said simply: “No.” It’s the kind of blind optimism that could come back to haunt him during his tenure, which begins in February. Too big to fail, of course, is the financial crisis-era term for banks that the US government would be forced to bail out in a crisis because they might take the entire system down with them. Think of Citigroup, JPMorgan Chase, and Goldman Sachs. They underpin too much of our financial network to be allowed to falter.

“Dodd-Frank did a lot of things, but ending Too Big To Fail can’t be listed among its accomplishments,” Isaac Boltansky, director of policy research at Compass Point, told Business Insider. “The system is far safer given the capital and liquidity rules, and new mandates such as living wills and orderly liquidation authority should blunt panic in a crisis, but I doubt anyone in Washington or on Wall Street truly believes the federal government would stand idly by in the event of another systemic banking crisis,” he said. Democratic Senator Elizabeth Warren also took issue with Powell’s opening statement, which talked about “easing the burden” of regulation for banks.

“I’m troubled that you believe the biggest problem with bank regulations is that they are too tough,” Warren said during the hearing, arguing that it was that kind of mindset that led to the financial crisis of 2007-2008. At that time, many large investment banks were rescued by the Treasury and the Federal Reserve after their investments in housing soured quickly as a historic boom turned to bust. Treating the banks as victims of burdensome rules — rather than perpetrators of a historic crisis in need of deeper and more constant supervision — could lay the groundwork for a repeat. When it comes, Powell is going to regret that he didn’t have more to say about this.

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The pound surged on this news, but without solving the Irish border issue, none of it is worth a thing.

Britain Close To Deal On Brexit Bill With EU (R.)

Britain has offered to pay much of what the European Union was demanding to settle a Brexit “divorce bill”, bringing the two sides close to agreement on a key obstacle to opening talks on a future free trade pact, EU sources said on Tuesday. The offer, which British newspapers valued at around 50 billion euros, reflected the bulk of outstanding EU demands that include London paying a share of post-Brexit EU spending on commitments made before Britain leaves in March 2019 as well as funding of EU staff pensions for decades to come. A British government official said they “do not recognize” this account of the talks going on ahead of a visit by Prime Minister Theresa May to Brussels this coming Monday.

EU officials close to the negotiations stressed that work was still continuing ahead of May’s talks with European Commission President Jean-Claude Juncker and his chief Brexit negotiator Michel Barnier. But EU diplomats briefed on progress said the British offer was promising and that, on the financial settlement, the two sides were, as one said, “close to a deal”. Nonetheless, others cautioned that Britain had yet to make a fully committed offer and that essential agreement from the other 27 member states could not yet be taken for granted. The EU set the condition of “significant progress” on three key elements of a withdrawal treaty before it would accede to London’s request for negotiations on a free trade pact that could keep business flowing after Brexit in 16 months.

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See you in court.

Former New Zealand PM John Key Lied About Mass Surveillance Program (NZH)

Sir John Key’s story of how and why he canned a “mass surveillance” programme are at odds with official papers detailing development of the “Speargun” project. The issue blew up in the final days of the 2014 election with Key claiming the programme was long-dead and had been replaced by a benign cyber-security system called Cortex. Key always claimed the Speargun project to tap New Zealand’s internet cable was stopped in March 2013. But new documents show development of Speargun continued after the time he had said he ordered a halt – apparently because the scheme was “too broad”. Instead, they show Speargun wasn’t actually stopped until after Key was told in a secret briefing that details were likely to become public because they could be in the trove of secrets taken by NSA whistleblower Edward Snowden.

With days to go until voting in 2014, Key found himself accused by some of the world’s most high-profile and outspoken surveillance critics of secretly developing a mass surveillance system with the United States’ National Security Agency. It was high stakes for Key, also Minister of the GCSB, as he had previously promised the public he would resign as Prime Minister if there was ever mass surveillance of New Zealanders At the Kim Dotcom-organised “Moment of Truth” event, journalist Glenn Greenwald and Snowden claimed our Government Communications Security Bureau spy agency had developed the “Speargun” project to tap New Zealand’s internet cable and suck out masses of data.

Key denied it, saying Speargun had been canned in March 2013 because it was too intrusive. He said: “We made the call as government and I made the call as the Minister and as Prime Minister, that actually it was set too broadly. “What we ultimately did, when it comes to Speargun, in my opinion, I said it’s set too far. I don’t even want to see the business case.” The NZ Herald has found – after three years of refusals and information going missing – that the former Prime Minister’s version of events doesn’t match that of documents created at the time.

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As if MbS is any different.

Senior Saudi Prince Freed In $1 Billion Settlement Agreement (R.)

Senior Saudi Prince Miteb bin Abdullah, once seen as a leading contender to the throne, was freed after reaching an “acceptable settlement agreement” with authorities paying more than $1 billion, a Saudi official said on Wednesday. Miteb, 65, son of the late King Abdullah and former head of the elite National Guard, was among dozens of royal family members, ministers and senior officials who were rounded up in a graft inquiry partly aimed at strengthening the power of Crown Prince Mohammed bin Salman. The official, who is involved in the anti-corruption campaign, said Miteb was released on Tuesday after reaching “an acceptable settlement agreement”. The amount of the settlement was not disclosed but the official said it is believed to be the equivalent of more than $1 billion.

“It is understood that the settlement included admitting corruption involving known cases,” the official said. According to a Saudi official, Prince Miteb was accused of embezzlement, hiring ghost employees and awarding contracts to his own firms including a $10 billion deal for walkie talkies and bulletproof military gear worth billions of Saudi riyals. The allegations against the others included kickbacks, inflating government contracts, extortion and bribery.

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Easy: let the banks take the losses, not the people.

Europe Needs a Way to Prevent the Next Greek-Style Debt Crisis (BBG)

If there was ever a textbook example of how not to handle a sovereign debt crisis, it was Greece. Nearly a decade since Athens first asked for help from its euro zone partners and the IMF, the Greek economy is still struggling to recover. Even after a steep restructuring, sovereign debt remains unsustainable. If Greece is not to be crippled by its debt load, European governments will have to accept further debt-reducing measures, on top of the maturity extensions and the cut in interest rates they have already agreed to. So it’s no surprise that one of the key debates on the future of the euro zone relates to how sovereign debt restructuring should be made easier. There is little doubt that forcing losses on creditors at an earlier stage, as some propose, would increase the chance that a program of financial assistance is successful.

However, the euro zone should be wary of automatic triggers; they risk bringing on the very crisis they are designed to avert. The debate on the future of debt restructuring in the euro zone largely involves two positions. The first, which is widely shared in Germany, sees an orderly debt restructuring mechanism as an essential next step for the currency union. When a country applies for financial help from the European Stability Mechanism (ESM), creditors should face some form of debt restructuring immediately. This would ensure a better distribution of risks between debt-holders and the ESM. The threat of a haircut will make investors more discerning in their lending, contributing to fiscal discipline within the euro zone.

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Because Bayer is a German chemical company with very deep roots in Berlin, and it’s buying Monsanto. Ironically, the only party that can stop that purchase is the EU… German media say Merkel was angry at the German representative for going it alone on Germany’s decision to support this stance. So let’s see her reverse it.

Controversial Glyphosate Weedkiller Wins New 5-Year Lease In Europe (G.)

Glyphosate, the key ingredient in the world’s bestselling weedkiller, has won a new five-year lease in Europe, closing the most bitterly fought pesticide relicensing battle of recent times. The herbicide’s licence had been due to run out in less than three weeks, raising the prospect of Monsanto’s Roundup disappearing from store shelves and, potentially, a farmers’ revolt. Instead, an EU appeal committee voted on Monday to reauthorise the substance despite a petition by 1.3 million EU citizens last week calling for a ban. In 2015, the World Health Organisation’s cancer agency, the IARC, famously declared glyphosate “probably carcinogenic to humans,” although several international agencies, including Efsa, subsequently came to opposite conclusions. Monsanto insists glyphosate is safe.

The EU health commissioner Vytenis Andriukaitis said: “Today’s vote shows that when we all want to, we are able to share and accept our collective responsibility in decision making.” However, the approval falls far short of the 15-year licence the commission had originally sought and Conservative MEPs lashed out at what they called “an emotional, irrational but politically convenient fudge”. Ashley Fox, the Conservative party’s delegation leader in the European parliament, said that the vote “simply prolongs the uncertainty for our farmers, who are being badly let down. They cannot plan for the future without long term assurances about the availability of substances they rely on.”

A re-run of the struggle to reauthorise glyphosate will now begin again in two years’ time, with a new safety assessment by the European Food Safety Authority (Efsa). Greenpeace EU food policy director, Franziska Achterberg, commented: “The people who are supposed to protect us from dangerous pesticides have failed to do their jobs and betrayed the trust Europeans place in them.” The Green party called it “a dark day for consumers, farmers and the environment”.

[..] Traces of glyphosate are routinely found in tests of foodstuffs, water, topsoil, and human urine in amounts way above safe limits set by regulators. Ben & Jerry’s recently introduced a new line of organic ice cream, in a bid to sate public concern. Campaigners say Monsanto ghostwrote research papers for regulators, enlisted EPA officials to block a US government review of glyphosate and formed front groups to discredit critical scientists and journalists, citing documents revealed in a US lawsuit by non-Hodgkin’s lymphoma sufferers. More than 280 similar lawsuits are now pending against Monsanto, according to the US right to know campaign.

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A tad scary?!

New Zealand Fault Line Wakes Up: “We Must Think Japan 2011 Ruptures” (SHTF)

The devastating Kaikura earthquake in 2016 has resurrected the Hikurangi subduction zone where two tectonic plates clash and one is pushed down. Geologists are now warning that this trench could cause a massive earthquake on the ocean floor, and could trigger other 9.0 magnitude earthquakes and tsunamis that will reach the western coast of the islands in just seven minutes. The Australian plate is heading north while the Pacific plate is heading west, and the combination of these motions means that the Pacific plate, which includes much of the South Island, is moving relative to the Australian plate at a rate of about 40millimeters each year in a southwesterly direction. Ursula Cochran, from the science firm GNS, told The Marlborough Express: “We need to think Japan 2011 basically, because if our whole plate boundary ruptured it would be a magnitude-9 earthquake.”

The Great East Japan Earthquake and resulting tsunami smashed through the country’s north-eastern coast killing almost 16,000 people and destroying the lives of thousands more. It also triggered a major ongoing crisis at the Fukushima nuclear plant. “One of the biggest hazards of that kind of earthquake is the tsunami that is triggered by a fault rupture offshore.,” Cochran added. “We know from tsunami modeling from a hypothetical earthquake from the Hikurangi subduction zone that the travel times could be very short to the coast, so seven minutes for some of the south Wairarapa coast.” One year after it struck, scientists are also warning that the Kaikoura quake was not the “big one” for the Hikurangi subduction zone. The quake on the Hikurangi subduction zone was devastating. The magnitude 7.8 that destroyed houses, lifted the Kaikoura seabed by 2m, tore apart farmland, and wrecked kilometers of State Highway 1, may be minor compared to what could come, Cochran said.

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Has the west ever ended slavery?

Libya “Chose” Freedom, Now It Has Slavery (CP)

NATO’s military intervention in Libya in 2011 has justifiably earned its place in history as an indictment of Western foreign policy and a military alliance which since the collapse of the Soviet Union has been deployed as the sword of this foreign policy. The destruction of Libya will forever be an indelible stain on the reputations of those countries and leaders responsible. But now, with the revelation that people are being sold as slaves in Libya (yes, you read that right. In 2017 the slave trade is alive and kicking Libya), the cataclysmic disaster to befall the country has been compounded to the point where it is hard to conceive of it ever being able to recover – and certainly not anywhere near its former status as a high development country, as the UN labelled Libya 2010 a year prior to the ‘revolution’.

Back in 2011 it was simply inconceivable that the UK, the US and France would ignore the lessons of Iraq, just nine years previously in 2003. Yet ignore them they did, highlighting their rapacious obsession with maintaining hegemony over a region that sits atop an ocean of oil, despite the human cost and legacy of disaster and chaos which this particular obsession has wrought. When former UK Prime Minister David Cameron descended on Benghazi in eastern Libya in the summer of 2011, basking in the glory of the country’s victorious ‘revolution’ in the company of his French counterpart Nicolas Sarkozy, he did so imbued with the belief he had succeeded in establishing his legacy as a leader on the global stage. Like Blair before him, he’d won his war and now was intent on partaking of its political and geopolitical spoils.

Cameron told the crowd, “Your city was an inspiration to the world, as you threw off a dictator and chose freedom.” The destruction of Libya by NATO at the behest of the UK, the US and France was a crime, one dripping in the cant and hypocrisy of Western ideologues for whom the world with all its complexities is reduced to a giant chessboard upon which countries such as Libya have long been mere pieces to be moved around and changed at their pleasure and in their interests – interests which are inimical to the people of the countries they deem ripe for regime change.

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Europe’s politicians care only about their careers.

The EU Created Libya’s Migrant Abuses, Now It Must Address Them (CP)

Revelations into Libya’s awful migrant detention centres showed the humanitarian emergency that occurs within them. The international community – particularly the European Union, has not only failed to address this problem, but is responsible for causing it. After Libya descended into chaos following long-time leader Muammar Gaddafi’s fall in 2011, the nation became a major hub of slavery and migrant-trafficking. For the hundreds of thousands of those fleeing war-torn areas in Sub-Saharan Africa, Libya serves as a strategic point to reach the safe havens of Europe. However, those who fail to reach Europe face equally dire circumstances to their homeland after being detained by Libyan authorities, as part of an EU-deal with the Libyan Government of National Accord (GNA) penned in February.

This deal entails the Libyan coastguard stopping migrant vessels leaving Libya. It was quite rightly slammed as ‘inhumane’ by the UN recently. Due to lack of protections for migrants from in this deal, migrants are either brutally tortured, abused and even sexually assaulted by Libyan authorities in camps, or are sold into slavery by unscrupulous smugglers. A CNN investigation showed the true horrors of human-trafficking. Migrants are treated like cattle, sold for as little as four hundred dollars, and sometimes moved from one slave master to another. Others on the scene report migrants in camps showing signs of torture, burns, lashings, and other abuses. An Italian doctor Pietro Bartolo slammed them as ‘concentration camps’. “You must realise that in Libya, black people are not considered human beings, they’re seen as inferior, you can do whatever you want to them,” Bartolo told Euro News.

Observers foresaw the humanitarian consequences soon after the deal with Libya was agreed. German foreign minister Sigmar Gabriel warned in April that thousands of men, women and children would face “catastrophic conditions”. It turns out Gabriel and other’s predictions were correct. The EU must therefore accept the blame for creating this crisis, for backing these unregulated, barbaric camps with the Libyan authorities. However, Europe has a clear geopolitical aim: to contain migrants, rather than help them – even if their suffering is enhanced. In doing so it uses Libya – a frail nation itself, as a dumping ground, to rid itself of the migrant issue. It has no regard for the human rights of those in detention centres.

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Aug 282017
 
 August 28, 2017  Posted by at 9:01 am Finance Tagged with: , , , , , , , , ,  5 Responses »


Lou Reed New York City 1966

 

Harvey’s Cost Reaches Catastrophe: Only 15% Of Homes Have Flood Insurance (BBG)
Gasoline Surges, Oil Holds Near $48 as Harvey Shuts Refineries (BBG)
Mammoth Flood Disaster in Houston: More Rain Yet to Come (WU)
The Coming Collapse Of China’s Ponzi Scheme Economy (SCMP)
What’s Driving The Growth In US ‘Shadow Banking’ (CBR)
Volatility Makes a Comeback (Rickards)
YouTube “Economically Censors” Ron Paul (ZH)
Should The Rich Be Taxed More? (G.)
The West’s Wealth Is Based On Slavery. Reparations Should Be Paid (G.)
Danone Sends 5,000 Cows to Siberia in Quest for Cheaper Milk (BBG)

 

 

The real tragedy takes place below the surface. Sort of literally. Much more rain to come.

Harvey’s Cost Reaches Catastrophe: Only 15% Of Homes Have Flood Insurance (BBG)

Hurricane Harvey’s second act across southern Texas is turning into an economic catastrophe – with damages likely to stretch into tens of billions of dollars and an unusually large share of victims lacking adequate insurance, according to early estimates. Harvey’s cost could mount to $24 billion when including the impact of relentless flooding on the labor force, power grid, transportation and other elements that support the region’s energy sector, Chuck Watson, a disaster modeler with Enki Research, said by phone on Sunday. That would place it among the top eight hurricanes to ever strike the U.S. “A historic event is currently unfolding in Texas,” Aon wrote in an alert to clients. “It will take weeks until the full scope and magnitude of the damage is realized,” and already it’s clear that “an abnormally high portion of economic damage caused by flooding will not be covered,” the insurance broker said.

[..] Most people with flood insurance buy policies backed by the federal government’s National Flood Insurance Program. As of April, less than one-sixth of homes in Houston’s Harris County had federal coverage, according to Aon. That would leave more than 1 million homes unprotected in the county. Coverage rates are similar in neighboring areas. Many cars also will be totaled. “A lot of these people are going to be in very serious financial situations,” said Loretta Worters, a spokeswoman for the Insurance Information Institute. “Most people who are living in these areas do not have flood insurance. They may be able to collect some grants from the government, but there are not a lot, usually they’re very limited. There are no-interest to low-interest loans, but you have to pay them back.”

The federal program itself is already struggling with $25 billion of debt. The existing program is set to expire on Sept. 30 and is up for review in Congress, which ends its recess Sept. 5. Costs still will likely soar for insurance companies and their reinsurers, biting into earnings. As Harvey bore down on the coastline Friday, William Blair, a securities firm that tracks the industry, said the storm could theoretically inflict $25 billion of insured losses if it landed as a “large category 3 hurricane.” Policyholder-owned State Farm Mutual Automobile Insurance has the largest share in the market for home coverage in Texas, followed by Allstate, which is publicly traded. William Blair estimated that, in that scenario, Allstate could incur $500 million of pretax catastrophe losses, shaving 89 cents off of earnings per share.

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Most shutdowns so far are precautionary. But…

Gasoline Surges, Oil Holds Near $48 as Harvey Shuts Refineries (BBG)

Gasoline surged to the highest in two years and oil was steady as flooding from Tropical Storm Harvey inundated refining centers along the Texas coast, shutting more than 10% of U.S. fuel-making capacity. Motor fuel prices rose as much as 6.8%, while oil held gains near $48 a barrel. Harvey, the strongest storm to hit the U.S. since 2004, made landfall as a hurricane Friday, flooding cities and shutting plants able to process some 2.26 million barrels of oil a day. Pipelines were closed, potentially stranding some crude in West Texas and starving New York Harbor of gasoline. Gasoline prices are going to continue to rise this week as we expect another three days of rain in the Houston area,” Andy Lipow, president of consultant Lipow Oil in Houston, said by phone.

“With pipeline operators beginning to shut down their crude oil and refined product infrastructure, I expect to see further curtailment of refinery operations. A spike in gasoline and diesel prices will drag up crude oil prices.” Oil has traded this month in the tightest range since February as investors weigh rising global supply against output cuts by members of OPEC and its allies. As Harvey led to widespread flooding, Shell shut its Deer Park plant, while Magellan Midstream suspended its inbound and outbound refined products and crude pipeline transportation services in the Houston area. Gasoline for September delivery climbed as much as 11.33 cents to $1.7799 a gallon on the New York Mercantile Exchange, the highest intraday price for a front-month contract since July 2015.

It traded at $1.7621 at 12:36 p.m. in Hong Kong. West Texas Intermediate oil for October delivery fell 16 cents to $47.71 a barrel after advancing 0.9% on Friday. Brent crude’s premium to WTI widened to the largest in two years with the global benchmark trading at as much as $4.96 above the U.S. marker. Brent for October settlement gained 18 cents, or 0.3%, to $52.59 a barrel on the London-based ICE Futures Europe exchange.

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Waether Underground is probably the best source.

Mammoth Flood Disaster in Houston: More Rain Yet to Come (WU)

Harvey’s winds are expected to remain modest, and it could become a tropical depression at any point, but winds are not the problem here. The NOAA/NWS National Hurricane Center now predicts that Harvey will inch its way into the Gulf of Mexico—though just barely—by Monday night, then arc northeast and make a second landfall just west of Houston on Wednesday. The 12Z GFS and 00Z European model runs agree on a general northward motion for Harvey across eastern Texas, beginning around midweek. At this point it may make little difference whether Harvey stays just inland or moves just offshore, since rainbands would continue to be funneled toward Houston either way. The fine-scale particulars of this outlook may shift over time, but the overall message is consistent: Harvey will be a devastating rainmaking presence in southeast Texas for days to come.

Harvey’s circulation is located in a near-ideal spot for funneling vast amounts of moisture from the Gulf of Mexico toward the upper Texas coast. Here, converging winds at low levels have been concentrating the moisture into north-south-oriented bands of intense thunderstorms with torrential rain. Since Harvey is barely moving, these bands are creeping only slowly eastward as individual cells race north along them—a “training” set-up that is common in major flood events. Mesoscale models, our best guidance for short-term, small-scale behavior of thunderstorms, show little sign of relief for southeast Texas anytime soon. Convection-resolving mesoscale models, which have a tight enough resolution to depict individual thunderstorms, are an invaluable tool in situations like this. The mesoscale nested NAM model predicts that 20” – 30” of additional rainfall is likely through Tuesday across the Houston metro area, with even larger totals at some points.

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Hmm. But what if China manages to unload all its overcapacity on the Belt Road, and makes other countries pay?

The Coming Collapse Of China’s Ponzi Scheme Economy (SCMP)

Friends who have a greater interest than I do in reading the tea leaves in Beijing tell me that the emphasis in relations with Hong Kong from now on will be on one country rather than two systems. I think this phrases things the wrong way. The one country bit was never in issue. What they actually mean to say is that Beijing’s system of state command of the economy will become dominant and Hong Kong’s more freewheeling system will fade away. I don’t think it will happen. In my view human society is so dynamic that no command system can last long in charge of an economy. Attempts at this particular form of hubris inevitably end in either war or financial crisis. For the Soviet Union it was financial crisis. I think the same fate awaits Beijing.

Consider crude steel production, a test-tube example of how command economies get it wrong. In the mainland this stood in June at an all time monthly record of 73 million tonnes, five times the total production in all of Europe. Steel was recently targeted for a reduction in capacity but then a regime of easy money intended to help the industry overcome a difficult period of contraction instead stimulated production. It has happened across the mainland’s rust belt industries. Why is so much steel needed? Simple. It is needed to build more steel mills so as to build more shipyards, ports, railways and bridges so that more ships can be built to carry more iron ore to more ports and thence along more rails and bridges to more steel mills so as to build more shipyards, ports, railways …

What we have here, in short, is a giant Ponzi scheme. In a Ponzi scheme you pay out the winnings of the first entrants with what others later pay into it. As long as it keeps growing everything is fine. When it stops growing it collapses. In this case you justify production with demand based purely on more production. As long as you keep pushing production up everything looks fine. At its peak in 2014 China turned out 30 times more cement than the United States, and the latest production figures are only a smidgen less than 2014’s.

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What do you think? A good sign? It isn’t in China….

What’s Driving The Growth In US ‘Shadow Banking’ (CBR)

In the wake of the 2007–10 financial crisis, there’s been sizeable growth of “shadow banking”— companies without banking charters entering lines of business traditionally associated with deposit-taking banks. Hedge funds that make direct loans to midsize businesses, online mortgage originators, peer-to-peer lending platforms, and payday lenders have all been on the rise. What’s behind this? According to Chicago Booth’s Gregor Matvos, Booth PhD candidate Greg Buchak, Columbia’s Tomasz Piskorski, and Stanford’s Amit Seru, much of the growth is due to regulations that have pushed banks out of traditional lending businesses. The researchers also attribute some growth to online technology that has lowered the barrier to entry in markets where lenders once needed networks of physical branches to have any hope of building business.

The researchers focus on the US residential lending market, the largest consumer loan market in the country—and the market that drew the most attention from regulators after 2008. Between 2007 and 2015, shadow banks nearly tripled their market share, from 14% to 38%. They gained the most in the Federal Housing Administration (FHA) mortgage market, which serves lower-quality borrowers and is where shadow banks’ share rose from 20% to 75%. Traditional banks retreated from sectors of the mortgage market where the regulatory burden grew the most, the researchers note. Traditional banks have been particularly hindered by rules that increased monitoring of balance-sheet holdings and constrained what banks could hold in their own accounts.

Their retreat helped shadow banking succeed in the riskier FHA market and in more-traditional, conforming mortgages. The researchers also separated shadow banks into those that did and didn’t originate loans online. During the study period, lenders that originated loans online (fintech lenders) saw market share rise from 4% to 13%—but that remains less than half of the shadow-banking sector.

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Super spikes.

Volatility Makes a Comeback (Rickards)

Volatility has languished near all-time lows for months on end. That’s about to change. For almost a year, one of the most profitable trading strategies has been to sell volatility. Since the election of Donald Trump stocks have been a one-way bet. They almost always go up, and have hit record highs day after day. The strategy of selling volatility has been so profitable that promoters tout it to investors as a source of “steady, low-risk income.” Nothing could be further from the truth. Yes, sellers of volatility have made steady profits the past year. But the strategy is extremely risky and you could lose all of your profits in a single bad day. Think of this strategy as betting your life’s savings on red at a roulette table. If the wheel comes up red, you double your money. But if you keep playing eventually the wheel will come up black and you’ll lose everything.

That’s what it’s like to sell volatility. It feels good for a while, but eventually a black swan appears like the black number on the roulette wheel, and the sellers get wiped out. I focus on the shocks and unexpected events that others don’t see. Right now looks like one of those highly favorable windows when the purchase of volatility is the right move. You could collect huge winnings as the short sellers scramble to cover their bets before they are wiped out completely. The chart below shows a 20-year history of volatility spikes. You can observe long periods of relatively low volatility such as 2004 to 2007, and 2013 to mid-2015, but these are inevitably followed by volatility super-spikes. During these super-spikes the sellers of volatility are crushed, sometimes to the point of bankruptcy because they can’t cover their bets.

The period from mid-2015 to late 2016 saw some brief volatility spikes associated with the Chinese devaluation (August and December 2015), Brexit (June 23, 2016) and the election of Donald Trump (Nov. 8, 2016). But, none of these spikes reached the super-spike levels of 2008 – 2012. In short, we have been on a volatility holiday. Volatility is historically low and has remained so for an unusually long period of time. The sellers of volatility have been collecting “steady income,” yet this is really just a winning streak at the volatility casino. The wheel of fortune is about to turn and luck is about to run out for the sellers. It will soon be time for the buyers of volatility to collect their winnings, big time.

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Sliding scales. One step before large tech is declared utility?!

YouTube “Economically Censors” Ron Paul (ZH)

Former US Congressman Ron Paul has joined a growing list of independent political journalists and commentators who’re being economically punished by YouTube despite producing videos that routinely receive hundreds of thousands of views. In a tweet published Saturday, Wikileaks founder Julian Assange tweeted a screenshot of Paul’s “Liberty Report” page showing that his videos had been labeled “not suitable” for all advertisers by YouTube’s content arbiters. Assange claims that Paul was being punished for speaking out about President Donald Trump’s decision to increase the number of US troops in Afghanistan, after Paul published a video on the subject earlier this week. The notion that YouTube would want to economically punish a former US Congressman for sharing his views on US foreign policy – a topic that he is unequivocally qualified to speak about – is absurd.

Furthermore, the “review requested” marking on one of Paul’s videos reveals that they were initially flagged by users before YouTube’s moderators confirmed that the videos were unsuitable for a broad audience. Other political commentators who’ve been censored by YouTube include Paul Joseph Watson and Tim Black – both ostensibly for sharing political views that differ from the mainstream neo-liberal ideology favored by the Silicon Valley elite. Last week, Google – another Alphabet Inc. company – briefly banned Salil Mehta, an adjunct professor at Columbia and Georgetown who teaches probability and data science, from using its service, freezing his accounts without providing an explanation. He was later allowed to return to the service. Conservative journalist Lauren Southern spoke out about YouTube’s drive to stifle politically divergent journalists and commentators during an interview with the Daily Caller.

“I think it would be insane to suggest there’s not an active effort to censor conservative and independent views,” said Southern. “Considering most of Silicon Valley participate in the censorship of alleged ‘hate speech,’ diversity hiring and inclusivity committees. Their entire model is based around a far left outline. There’s no merit hiring, there’s no support of free speech and there certainly is not an equal representation of political views at these companies.” Of course, Google isn’t the only Silicon Valley company that’s enamored with censorship. Facebook has promised to eradicate “fake news,” which, by its definition, includes political content that falls outside of the mainstream. Still, economically punishing a former US Congressman and medical doctor is a new low in Silicon Valley’s campaign to stamp out dissent.

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The most prosperous times of our societies coincide with the highest tax levels for the rich.

Should The Rich Be Taxed More? (G.)

The past four decades have been extremely kind to those at the top. They have seen their incomes grow faster than the rest of the population and hold a far bigger share of wealth in the form of property and financial investments than the rest of the population. Over the years a bigger slice of national income has gone to capital at the expense of labour, and the rich have been the beneficiaries of that, because they are more likely to own shares and expensive houses. The trend has been particularly strong in the US, where labour’s share of income has fallen from a recent peak of 57% at the end of Bill Clinton’s presidency to 53% by 2015. The Gini coefficient – a measure of inequality – has been steadily rising since 1970 and is now at levels normally seen in developing rather than advanced economies.

Hatgioannides, Karanassou and Sala seek to take account of these profound changes in the distribution of income and wealth. They do so by dividing the average income tax rate of a particular slice of the US population by the%age of national income commanded by that same group and by their share of wealth. They then look at whether by this measure – the fiscal inequality coefficient – the US tax system has become more or less progressive over time. The findings show quite clearly that it has become less progressive. In terms of income, the poorest 99% of the US population paid nine times as much income tax as the richest 1%, both when John F Kennedy was president in the early 1960s and when Ronald Reagan beat Jimmy Carter in the 1980 race for the White House. By 2014, they paid 21 times as much.

Similarly, the bottom 99.9% in the US paid 28 times as much tax as the elite 0.1% in the early 1960s and the early 1980s, but by 2014 they were paying 76 times as much. The same trend applies – although it is not pronounced – when income tax is divided by the share of wealth. The bottom 99% paid 22 times as much income tax as the wealthiest 1% in 1980 but were paying 47 times as much in 2014. The bottom 99.9% paid 58 times as much income tax as the top 0.1% before the onset of Reaganomics; by 2014 they were paying 175 times as much. [..] As the authors note, since 1980, economic policy making has been dominated by the idea that deregulation, less generous welfare and tax cuts will stimulate higher investment, higher productivity, higher growth and higher living standards for all. None of this has occurred and, what’s more, the social mobility in the decades after the second world war has been thrown into reverse. The great American dream – the notion that anybody can strike it rich – is dead.

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They won’t be.

The West’s Wealth Is Based On Slavery. Reparations Should Be Paid (G.)

Malcolm X explained that “if you stick a knife in my back nine inches and pull it out six inches, that’s not progress. If you pull it all the way out, that’s not progress. The progress comes from healing the wound that the blow made”. Instead of attempting to fix the damage, we are completely unable to progress on issues of equality because countries such as Britain “won’t even admit the knife is there”. It is the height of delusion to think that the impact of slavery ended with emancipation, or that empire was absolved by the charade of independence being bestowed on the former colonies.

[..]It is not just governments that owe a debt; some of the biggest institutions and corporations built their wealth on slavery. Lloyds of London is one of Britain’s most successful companies and its roots lie in insuring the merchant trade in the 17th century. The fact that this was the slave trade has already led to civil action being taken by African Americans in New York. The church, many of the biggest banks, much of the ironworks industry and port cities gorged themselves on the profits from human flesh. It is clear that it would be just to pay reparations, and it is also possible to calculate the amount that Britain and other nations owe. A lot of work has been done in the United States to determine the damages owed to African Americans. The figure owed comes to far more than the “forty acres and a mule” that were promised to some African Americans who fought in the civil war.

The latest calculations from researchers estimates that for unpaid labour, taking into account interest and inflation, African Americans are owed anywhere between $5.9tn and $14.2tn. It would not be prohibitively complicated to work out the debts owed by the western powers, or the companies that enriched themselves off exploitation. The obviousness of the issue is such that a federation of Caribbean countries (Caricom) is now demanding reparations, as is the Movement for Black Lives in America and Pan-Afrikan Reparations Coalition in Europe. In many ways the calls for reparatory justice do not take go far enough. Caricom includes a demand to cancel third world debt, and the Movement for Black Lives for free tuition for African Americans.

Both of these are examples of removing the knife from our backs, rather than healing the wound. Third world debt was an unjust mechanism for maintaining colonial economic control and; allowing free access to a deeply problematic school system will not eradicate the impacts of centuries of oppression. In order to have racial justice we need to hit the reset button and have the west account for the wealth stolen and devastation caused. Nothing short of a massive transfer of wealth from the developed to the underdeveloped world, and to the descendants of slavery and colonialism in the west, can heal the deep wounds inflicted.

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Cows to Qatar, cown to SIberia: the new backpackers?!

Danone Sends 5,000 Cows to Siberia in Quest for Cheaper Milk (BBG)

President Vladimir Putin’s ban on European Union cheese imports has driven up milk prices in Russia by so much that French yogurt maker Danone is transporting almost 5,000 cows to a farm in Siberia to ensure it has an affordable supply. The Holstein cows are traveling as many as 2,800 miles (4,500 kilometers) in trucks from the Netherlands and Germany, boosting the herd on a farm near the city of Tyumen, according to Charlie Cappetti, head of Danone’s Russian unit. That should protect the company from the increase in raw milk prices, which are up 14% this year, he said. “Milk prices have been going up steadily,” Cappetti said in an interview in Moscow. “That puts products such as yogurt under pressure.” While the French dairy company doesn’t normally invest in agriculture, it made an exception for Russia.

After Putin’s ban on dairy imports took hold in 2014, demand for milk surged as local cheesemakers rushed to replace French camembert and Italian pecorino. That has exacerbated the inflationary effects of the ruble’s weakness. Danone invested in the 60-hectare (150-acre) farm with local producer Damate, Cappetti said. The first cows started to provide milk for Danone in May, and a final shipment of cattle is due to arrive in September. “We hope that Russian milk inflation will slow down next year,” the executive said. The difference between supply and demand is narrowing as new milk is coming to the market, including from the Siberian farm. While easing milk inflation may help the Russian dairy market rebound in volume terms, Danone isn’t expecting a fast economic recovery in the country, according to Cappetti. Sales in Russia have been growing in line with inflation in the first half and should rise in 2018, he said.

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Jul 312017
 


Elvis Presley with parents Gladys and Vernon 1937

 

Whatever It Took To Save The Euro (BBG)
US To Cut 755 Us Diplomatic Staff In Russia, Says Putin (AFP)
Despite Appearances, The Idea Of Social Progress Is A Myth (Satyajit Das)
China Bond Buyers Quiz Taxi Drivers to See If Credit Good (BBG)
Uber, Lyft Mangle Rental Cars & Taxis. Other Sectors Next (WS)
Pence Sketches Possible Patriot Deployment In Estonia, Vows US Support (AFP)
How Immigration Is Changing Italian and European Demographics (Sp.)
Greece’s Road to Bailout Exit: 140 Reforms Down, Many More to Go (BBG)
Greeks Can’t See Any Light At The End Of Any Tunnel (G.)
Greece: A (Basket) Case Study In Savage Globalization (Nevradakis)
‘Human Life Is More Expendable’: Why Slavery Has Never Made More Money (G.)

 

 

Cute, funny. But the real cost is much higher. It’s not just the ECB.

Whatever It Took To Save The Euro (BBG)

So how much did it end up taking after ECB President Mario Draghi memorably said five years ago he’d do “whatever it takes” to save the euro? About €1.2 trillion ($1.4 trillion). That’s the amount that the ECB’s balance sheet has expanded in the half-decade since Draghi made those remarks at a conference in London (an ironic location from today’s post-Brexit perspective.) Deutsche Bank analysts including Luke Templeman go on to note there’s several things that have changed by that magnitude – €1.2 trillion – in the past five years, in an eerie Da Vinci Code-like confluence:
• The euro region’s gross domestic product has risen about €1.2 trillion
• The Federal Reserve’s balance sheet has also climbed the equivalent of roughly €1.2 trillion
• The combined market cap of the FANG stocks – Facebook, Amazon, Netflix and Alphabet – has jumped about the equivalent of €1.2 trillion

Templeman and his colleagues warn against making too much of the symmetry. After all, for the U.S. numbers to be related, it would suggest “every bond the Federal Reserve bought drove people to spend more time on these websites.”

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Think uranium.

US To Cut 755 Us Diplomatic Staff In Russia, Says Putin (AFP)

President Vladimir Putin on Sunday said the United States would have to cut 755 diplomatic staff in Russia and warned of a prolonged gridlock in its ties after the US Congress backed new sanctions against the Kremlin. Putin added bluntly that Russia was able to raise the stakes with America even further, although he hoped this would be unnecessary. A US State Department official denounced the move as a “regrettable and uncalled for act,” adding that Washington was now weighing a potential response. On Friday, the Russian foreign ministry demanded Washington cut its diplomatic presence in Russia by September 1 to 455 people – the same number Moscow has in the US.

“More than a thousand people – diplomats and technical personnel – were working and are still working” at the US embassy and consulates, Putin said in an interview with Rossia-24 television. The US State Department would not confirm the number of US officials serving at the mission. Putin added that an upturn in Russia’s relations with Washington could not be expected “any time soon.” “We have waited long enough, hoping that the situation would perhaps change for the better,” he said. “But it seems that even if the situation is changing, it’s not for any time soon.” Putin warned that Russia could further ratchet up the pressure, but he hoped this would not be needed.

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“If you are not busy being born, you are busy buying”.

Despite Appearances, The Idea Of Social Progress Is A Myth (Satyajit Das)

The undeniable improvement in living standards over the last 150 years is seen as evidence of progress. Improvements in diet, health, safe water, hygiene and education have been central to increased life spans and incomes. The lifting of billions of people globally out of poverty is a considerable achievement. But many of these individuals earn between $2 and $10 dollars a day. Their position is fragile, exposed to the vicissitudes of health, employment, economic conditions and political and societal stability. As William Gibson observed: “The future is already here — it’s just not very evenly distributed”. Economic progress also has come at a cost. Growth and wealth is increasingly based on borrowed money, used to purchase something today against the uncertain promise of paying it back in the future.

Debt levels are now unsustainable. Growth has been at the expense of existentially threatening environmental changes which are difficult to reverse. Higher living standards rely on the profligate use of under-priced, finite resources, especially water and energy, which have been utilised without concern about conservation for future use. Current growth, short-term profits and higher living standards for some are pursued at the expense of costs which are not evident immediately but will emerge later. Society has borrowed from and pushes problems into the future. The acquisition of material goods defines progress. The concept of leisure as shopping and consumption as the primary economic engine now dominate. Altering Bob Dylan’s lyrics, the Angry Brigade, an English anarchist group, described it as: “If you are not being born, you are busy buying”.

[19th-century Thomas Carlyle], who distrusted the “mechanical age”, would have been puzzled at the unalloyed modern worship of technology. Much of our current problems, environmental damage and pollution, are the unintended consequences of technology, especially the internal combustion engine and exploitation of fossil fuels. The invention of the motor vehicle was also the invention of the car crash. Technology applied to war continues to create human suffering. Mankind’s romance with technology increasingly is born of a desperate need for economic growth and a painless, cheap fix to problems such as reducing in greenhouse gas without decreasing living standards.

[..] Pre-occupation with narcissistic self-fulfilment and escapist entertainment is consistent with Carlyle’s concern about the loss of social cohesiveness, spirituality and community. His fear of a pervasive “philosophy of simply looking on, of doing nothing, of laissez-faire … a total disappearance of all general interest, a universal despair of truth and humanity, and in consequence a universal isolation of men in their own ‘brute individuality” … a war of all against all … intolerable oppression and wretchedness” seems modern.

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Taxi drivers and shoeshine boys. There’s your peak.

China Bond Buyers Quiz Taxi Drivers to See If Credit Good (BBG)

In China, taxi rides aren’t just a form of transportation any more. They’ve also become useful for bond buyers doing due diligence. Dining out at restaurants is also helpful. It’s all part of a boom in field trips by market participants coming to grips with a new reality in China: the potential for bond defaults. After decades when authorities effectively provided blanket assistance to keep troubled companies from going under, the Communist leadership’s focus on shuttering unproductive assets has upended the market. A total of 45 onshore corporate bonds have defaulted since the start of last year, a surge from the eight recorded in 2014 and 2015 – which themselves were the first since the market was established in the 1980s. While China has the world’s third-largest bond market, corporate financial transparency can be limited, forcing investors to get creative.

“If you just sit in the office, you would never know if an issuer has actually closed business,” said Xu Hua at Colight Asset Management in Shanghai. “When you go to the local places, be sure to have a chat with taxi drivers or restaurant customers after talking to the issuer – ask them if they have friends working for the company. Has their friends’ pay been cut or raised this year? Has the company delayed paying salaries? What’s the local reputation?” Recent incidents have showcased concerns about corporate governance and disclosure standards. The onshore bonds of two China Hongqiao units slumped in March after the world’s biggest aluminum maker said full-year results may be delayed because of issues raised by its auditor. Bondholders of China Shanshui Cement are still trying to recoup most of their money – at one point the company said it couldn’t repay interest without a company seal.

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We really want monopolies? They’re calling it freedom, and beneficial, but…

Uber, Lyft Mangle Rental Cars & Taxis. Other Sectors Next (WS)

Rideshare companies – mostly Uber, but now also Lyft elbowing into the scene – are changing the way business travelers look at ground transportation. In the process, these worker bees, who’re spending their company’s money, are not only crushing the taxi business but also that end of the rental car business. The collapse of business travel spending on taxis and rental cars is just stunning. And there is no turning back. Uber’s and Lyft’s combined share of the ground transportation market in terms of expense account spending in the second quarter has soared to 63%, with Uber hogging 55% and Lyft getting 8%. The share of taxis has plunged to 8%, now equal with Lyft for the first time, according to Certify, which provides cloud-based expense management software.

Uber hit that point in Q1 2015, when expense account spending on Uber matched spending on taxis for the first time, each with 25% of the market; rental cars still dominated with a 50% share. But that was an eternity ago. Note that the share of rental cars and taxis has declined at roughly the same rate. Uber’s growth in the business travel ground transportation market has continued despite its constant drumbeat of intricate debacles in the news, but the rate of growth has slowed. And Lyft’s rate of growth has surged. The chart above shows this surge in the growth rate of Lyft, which caused its share to jump from 3% a year ago to 8% now.

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We all know of teh US promise to Russia to not expand NATO.

Pence Sketches Possible Patriot Deployment In Estonia, Vows US Support (AFP)

US Vice President Mike Pence on Sunday raised the possibility of deploying the Patriot anti-missile defence system in Estonia, one of three NATO Baltic states worried by Russian expansionism, Prime Minister Juri Ratas said. “We spoke about it today, but we didn’t talk about a date or time,” Ratas told state broadcaster ERR after Pence began a visit to the tiny frontline state. The Patriot is a mobile, ground-based system designed to intercept incoming missiles and warplanes. “We talked about the upcoming (Russian military) manoeuvres near the Estonian border… and how Estonia, the United States and NATO should monitor them and exchange information,” Ratas said.

Relations between Moscow and Tallinn have been fraught since Estonia broke free from the crumbling Soviet Union in 1991, joining both the EU and NATO in 2004 – a move that Russia says boosted its own fears of encirclement by the West. Concern in Estonia and fellow Baltic states Latvia and Lithuania surged after Russia annexed Crimea from Ukraine in 2014 and stepped up military exercises. Pence, in remarks to journalists in the Estonian capital of Tallinn, spoke in strong but general terms about US support for eastern European countries. On Monday, he heads to Georgia – a non-NATO member that is also worried about Russia – and then to Montenegro, which became NATO’s 29th member on June 5. “President (Donald) Trump sent me to Europe with a very simple message. And that is that America first doesn’t mean America alone,” Pence said.

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This is not going to be smooth. Throw in a fierce financial crisis and what do you get?

How Immigration Is Changing Italian and European Demographics (Sp.)

Some European countries, namely Italy, Germany, France and the UK, are facing the so-called “substitution of nations,” where the national ethnical majority is disappearing physically and biologically, and is being substituted by migrants, according to a recent report. Sputnik Italy discussed the issue with Daniele Scalea, the author of the report. The recent report of the Italian-based Machiavelli Center of Political and Strategic Studies, “How immigration is changing Italian demographics” has revealed that a number of European countries are facing the “biological and physical extinction” of their national ethnicities. Ethnic majorities in such countries as Italy, Germany, France and the UK, are gradually turning into ethnic minorities, while being “substituted” by incoming migrants. Sputnik Italy discussed the issue with Daniele Scalea, an analyst at the center and the author of the report.

Migration is drastically changing the habitual course of life in Italy, he told Sputnik. The reason for the influx of African migrants into Europe is not wars or catastrophes, but an explosive demographic increase on the African continent, from 9% to 25% of the global population throughout the last century. While Europe, which accounted for over a fifth of the entire world population in 1950 (22%), is expected to make up just 7% of the world population in the year 2050, the%age of the African population will make a sweeping rise from 9% to 40%. Italy’s fertility rate is less than half of what it was in 1964, the analyst explained in his report. It has dropped from 2.7 children per woman to just 1.5 children per woman currently, a figure well below the replacement level for zero population growth of roughly 2.1 children per woman.

As of the first half of this year, Italy had over 5 million foreigners living as residents, a remarkable 25% growth relative to 2012 and a whopping 270% since 2002. At that time, foreigners made up just 2.38% of the population while 15 years later the figure has nearly trebled to 8.33% of the population. Moreover, even the children being born in Italy are overrepresented by immigrants, whose birthrate is considerably higher than native Italians, the study revealed. It is “unsurprising,” therefore, that Italian regions with the highest fertility rates are no longer in the south, as was usual the case, but in the Italian north and in the Lazio region, where there is a higher concentration of immigrants. If current trends continue, by 2065, first- and second-generation immigrants will exceed 22 million persons, or more than 40% of Italy’s total population.

By comparison, it was only in the not far-off 2001 that the percentage of foreigners living in Italy crossed the low threshold of 1%, which reveals the speed and magnitude of demographic change occurring in Italy, a phenomenon “without precedent” in Italy’s history, the study asserts.

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Waterboarding. Disregard all stories of recovery.

Greece’s Road to Bailout Exit: 140 Reforms Down, Many More to Go (BBG)

Greece’s hard times aren’t over. A return to the bond market last week, the pledge of 8.5 billion euros ($9.5 billion) in new loans from euro-area creditors, the possibility of more money from the International Monetary Fund and a S&P Global Ratings outlook upgrade have coalesced to bolster investor sentiment that Greece has turned a corner. Trouble is, much depends on the country implementing reforms — dozens of the 140 measures agreed to are in various stages of application and more than 100 additional actions are needed to access the remaining 26.9 billion euros in funds before the current bailout program ends in August 2018. While the evidence of belt-tightening is everywhere in Greece, from falling incomes to rising poverty, the country has less to show in terms of structural overhauls.

Creditor demands for more measures threaten to become politically explosive as Greek citizens and businesses count the cost of the financial crisis that has thrown their lives into turmoil over the last seven years. Over the years, creditors have imposed reforms that have affected the daily lives of Greeks, from requiring receipts for tax breaks and e-prescriptions for patients to prevent abuse to pension payout cuts of as much as 50%. While Greece’s record of implementing reforms hasn’t won it any kudos, it is now hitting against even more challenging structural measures aimed at profoundly changing entrenched habits. The real problem is with reforms like fixing the tax system and the judiciary that require “long implementation,” said Gerassimos Moschonas, an associate professor of comparative politics at Panteion University in Athens. Belt-tightening measures have had a dramatic effect on life, making further long-lasting reforms difficult, he said.

“The income of an average household has decreased at least 40% during the crisis, poverty risk has increased 35.6%, pension cuts are enormous and there is over-taxation,” he said. Since Greece became the epicenter of the European debt crisis in 2010, the country has agreed to austerity measures to restructure its economy, which has shrunk by more than a quarter over the period. In exchange, euro-area creditors and the IMF have provided more than 260 billion euros in bailout funds to keep Greece afloat. “Progress with structural reforms has fallen far short of what is needed to allow Greece to succeed in the euro zone, but the program foresees some intensification of efforts,” the IMF said in its report on July 20.

Prime Minister Alexis Tsipras’s government is struggling to squeeze pensions even more, allow Sunday openings for stores – which could threaten the livelihoods of small mom-and-pop shops that dot the country – consider further taxes and change labor laws that would make it even harder for employees to go on a strike. “There’s no serious implementation,” of difficult structural reforms, said Moschonas. “The Greek state has failed” to put them in place even after they were voted in parliament because of a lack of political will and the absence of technical expertise, he said.

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Got them by the balls.

Greeks Can’t See Any Light At The End Of Any Tunnel (G.)

Athens, like most urban centres, has been hardest hit by a crisis that has seen the country’s economic output contract by a devastating 26%. A study by the DiaNeosis thinktank found that 15% of the population, or 1,647,703 people, in 2015 earned below the extreme poverty threshold. In 2009 that number did not exceed 2.2%. The net wealth of Greek households fell by a precipitous 40% in the same period, according to the Bank of Greece. Unemployment, austerity’s most pernicious effect, hovers around 22%, by far the highest in the EU, despite a 5% drop in the last two years. Although the worst is over in terms of fiscal adjustment, few believe Greece will be able to escape a fourth bailout even if Athens regains market access when its current EU-IMF sponsored programme ends in August next year.

“It is very difficult to see the country being able to make a clean exit [from international stewardship] and raise the sort of money it needs to refinance its debt,” said Kyriakos Pierrakakis, director of research at DiaNeosis. “It will almost certainly need a new financial credit line, a bailout light, and that will come with new conditions.” In such circumstances, faith in government claims that the country has turned the corner – based as much on last week’s market foray as completion of a landmark compliance review and disbursement of €8.5bn in bailout funds – is in short supply. “Greeks can’t see any light at the end of any tunnel,” said Christodoulaki, shaking her head in disbelief. “They won’t believe anything at this point until they see it for real in front of their eyes.”

Across town in the communist party stronghold of Kaisariani, municipal authorities are already preparing for winter. In the giant 1960s concrete town hall, the social services department has lined up fundraising events, including concerts and theatre performances, to finance food donations that local stores and supermarkets can no longer afford to make. “Needs have grown exponentially,” said Marilena Christodoulou, her office wall adorned with the slogan “poverty is not a crime”.

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Last bits of a really good piece from a Greek American.

Greece: A (Basket) Case Study In Savage Globalization (Nevradakis)

Jean-Paul Sartre once famously stated that “a lost battle is a battle one thinks one has lost.” The tragic reality in Greece today, most Greeks, beaten down by the crisis and by the effects of what can be described as savage globalization, are plagued by feelings of collective guilt, self-loathing, hopelessness, feelings of inferiority, and apathy. The “inferiority” of Greece and the Greek people, and their “guilt,” are accepted as “facts of life.” It is, therefore, no surprise to see Greece ranked fourth worldwide in Bloomberg’s misery index for 2017. When one believes they have lost a battle, that means that they also recognize some other entity as the victor. In the case of Greece, that victor could be recognized as the EU and countries considered by average Greeks as “superior” and “civilized.” Writing in 1377, North African historian and historiographer Ibn Khaldun provides us with insights which could help explain Greece’s “xenomania” and nationwide Stockholm Syndrome today:

“The vanquished always want to imitate the victor in his distinctive mark, his dress, his occupation, and all his other conditions and customs. The reason for this is that the soul always sees perfection in the person who is superior to it and to whom it is subservient. It considers him perfect, either because the respect it has for him impresses it, or because it erroneously assumes that its own subservience to him is not due to the nature of defeat but to the perfection of the victor. If that erroneous assumption fixes itself in the soul, it becomes a firm belief. The soul, then, adopts all the manners of the victor and assimilates itself to him. This, then, is imitation.” It is, unfortunately, this very imitation that one observes in crisis-stricken Greece today. A society where the majority whines and complains, or simply gets up and leaves, but does not demand.

A nation that is demoralized; defeated; consumed by hopelessness; devoid of pride, self-respect, and self-confidence; paralyzed by fear; hampered by ignorance; and gripped by feelings of inferiority, cannot deliver change. This situation, of course, suits the powers that be magnificently. A society of self-loathers, a nation that is defeated and demoralized, will not pose a threat to those responsible for that oppression, while other “civilized” countries reap the ancillary benefits of the crisis, as the economic beneficiaries of the mass exodus and “brain drain” from Greece. This is savage globalization in action. In other words, Greece is a prime candidate for, in the words of Oscar López Rivera, the kickstarting of a decolonization process. His words may have been intended for Puerto Rico, but they are similarly applicable to Greece. But will the people of Greece heed Oscar’s words?

Read more …

21 million slaves. And we talk about Scaramucci’s rants.

‘Human Life Is More Expendable’: Why Slavery Has Never Made More Money (G.)

Slave traders today make a return on their investment 25-30 times higher than their 18th- and 19th-century counterparts. Siddharth Kara, a slavery economist and director of the Carr Center for Human Rights Policy at Harvard Business School, has calculated that the average profit a victim generates for their exploiters is $3,978 (£3,030) a year. Sex trafficking is so disproportionately lucrative compared to other forms of slavery that the average profit for each victim is $36,000. In his book Modern Slavery, to be published in October, Kara estimates that sex trafficking accounts for 50% of the total illegal profits of modern slavery, despite sex trafficking victims accounting for only 5% of modern slaves. Kara based his calculations, shared exclusively with the Guardian, on data drawn from 51 countries over a 15-year period, and from detailed interviews with more than 5,000 individuals who have been victims of slavery.

The first move to eradicate slavery was made in 1833, when the British parliament abolished it, 26 years after outlawing the trade in slaves. Nonetheless, at least twice as many people are trapped in some form of slavery today as were traded throughout the 350-plus years of the transatlantic slavery industry. Experts believe roughly 13 million people were captured and sold as slaves by professional traders between the 15th and 19th centuries. Today, the UN’s International Labour Organisation believes at least 21 million people worldwide are in some form of modern slavery. “It turns out that slavery today is more profitable than I could have imagined,” Kara said. “Profits on a per slave basis can range from a few thousand dollars to a few hundred thousand dollars a year, with total annual slavery profits estimated to be as high as $150bn.”

Read more …

Mar 032017
 
 March 3, 2017  Posted by at 1:41 pm Finance Tagged with: , , , , , , , , , ,  14 Responses »


Leonardo da Vinci Head of a Woman 1470s

 

This is turning into a very rewarding series, it opens up vistas I could never have dreamed of. First, in “Not Nearly Enough Growth To Keep Growing”, I posited that peak wealth for the west, and America in particular, was sometime in the early ’70s or late ’60s of the last century.

That led to longtime Automatic Earth reader Ken Latta, who’s old enough to have been alive to see it all, writing, in “When Was America’s Peak Wealth?”, that in his view peak wealth for America was earlier, more like late ’50s to early ’60s, a carefree period for which Detroit provided the design, and the Beach Boys the soundtrack.

And I know, for those who wrote to me about this, that there’s quite a bit of myopia involved in focusing on the US, or even the western world in general, when discussing these things. But at the same time, we’re all at our best when talking about our own experiences, something this thread has made abundantly clear. That said, I would absolutely love to get a view from other parts of the world, China, Latin America, Africa, Eastern Bloc, on the same topic. I just haven’t received any yet.

What I’ve absolutely adored is how -previously- anonymous Automatic Earth readers and commenters have felt the urge to share their life experiences because of what’s been written. This happened especially after Ken’s follow-up to his initial article, “Peak American Wealth – Revisited”, which saw many of his contemporaries, as well as younger readers after I ‘poked’ them, relate their views.

Then there was distinguished emeritus professor Charles A. Hall, who took offense with neither Ken nor I including energy as an explicit factor in determining wealth. Of course he was right. I have the creeping suspicion he often is. So Charlie wrote “Peak Wealth and Peak Energy”. Which not only set us straight, it also generated a -privately- emailed response from Belgian scientists- also Automatic Earth readers- about work he has earlier published on EROI of for instance Spanish solar PV (2.45:1? That must hurt!). As of this morning, it looks as if this may lead to further cooperation. What’s not to love?

And then all this has fired up Ken Latta to write yet another article, this time on ‘freely available’ energy before the age of oil -and after it!-, in the form of human slavery. In all of its forms and shapes, including wage slavery. Is it a coincidence that at the end of the age of oil, America’s -former- middle class appears to be descending -once more- into wage and debt slavery? Or is something entirely else – and darker- going on, as Ken seems to suggest below: The currently observable rapid decline in demand for wage slaves just happens to coincide with global peak energy.

Here once more is Ken Latta:

 

 

Ken Latta: Responses to the recent Charles Hall posting at the Automatic Earth, “Peak Wealth and Peak Energy”, parried with the idea that slaves were the original black gold that allowed society to build great wealth. Not only is that a fair statement, but what the finest historians tell us is that it was always thus. It seems that whenever a cluster of mud huts went up, taking slaves was soon placed on the to-do list.

When uncoerced human power is the highest EROEI source available, usually not much gets done beyond procuring food and making basic necessities. For such societies, peak wealth occurs when a herd of grazing animals happens by. The first rule of civilization building is: find a bunch of people you can force to do things they wouldn’t otherwise be inclined to do.

In antebellum America (USA that is) there were three kinds of coerced laborers. Chattel slaves (held as real property) were the abducted Africans that made the plantation economy of the southern states possible. Something that was not well known was the practice of our colonial masters trading guns, powder and lead to the “Indians” to purchase captive natives for slave labor. They proved to be unwilling workers and frequently escaped back to their tribes.

Indentured servants were not property. Their coerced labor was legally imposed to work off a debt. Many of our ancestors got to the US by contracting to work for someone that would pay their fare. The main difference from chattel was that upon settlement of the debt they were free to leave.

 

That brings us to the thing known to wags in recent times as wage slavery. Us wrinklies may remember a bumper sticker [I can’t be fired, slaves must be sold]. Wage slaves are free to come and go and quit any time. They may also be fired. When they are trying not to be fired and not ready to quit, they must pretty much do as they are told and thus coerced labor. There could be a fourth class, in that some people refer to entrepreneurial souls as the self-exploited.

Once the infrastructure to fully exploit fossil fuels was in place, the most repugnant forms of forced servitude fell out of favor. The president known as Old Hickory outlawed chattel slavery. Not necessarily because he so loved his African constituents, who were politically considered to be two-thirds of a person, but in hopes they would do what they could to hinder the Confederate war effort.

The newly self-owned citizens often ended up doing much the same work as before except as either indentured or wage slaves. Most wage slaves have progressively gotten less back breaking work to do, though not necessarily less monotonous. Some have gotten to do quite exciting and satisfying work.

They also worked up to the point of having some effective leverage in dealing with their would-be slave masters.

 


James Gibson Group of contrabands [runaway slaves] at Foller’s house, Cumberland Landing, Virginia 1862

 

Wage slavery is categorically different in that its prevalence correlates with non animate sources of energy. Wage slaves have served as overseers of the energy slave economy according to the instructions of the bosses. Sadly, what this implies is that as fossil energy production declines, the demand for wage slaves also declines. We are observing it happening. The stagnation of wage earnings began at the time US oil production peaked. The currently observable rapid decline in demand for wage slaves just happens to coincide with global peak energy.

The actual rate of energy decline is accelerated by the associated trend of impoverishment of wage slaves and the growing pool of would-be wage slaves. And thus we will get to see the effect of Ugo Bardi’s Seneca Cliff. Named for 1st century Roman citizen Lucius Annaeus Seneca and based on this quotation:

“It would be some consolation for the feebleness of our selves and our works if all things should perish as slowly as they come into being; but as it is, increases are of sluggish growth, but the way to ruin is rapid.”
– Lucius Anneaus Seneca, Letters to Lucilius, n. 91

Demand for energy is falling faster than production, causing even the mightiest producers to teeter on the edge of insolvency. The prediction a few years ago by petroleum geologist Jean Laherrere that the Bakken fields would be played out around 2020 appears to be on target.

The great NY Yankees catcher Yogi Berra is said to have quipped that “predictions are hard, especially about the future.” I agree, but sometimes you just have to throw caution to the wind.

Ugo Bardi, an estimable professor, and a whole pack of fellow academics joined by the usual crowd of entrepreneurial hustlers are pushing a pipe filled to the brim with Hopium that ruination can be avoided or mitigated by works worthy of a sorcerers apprentice.

We just have to assemble a vast armada of solar panels and wind turbines, plus a few billion tons of rechargeable batteries and turn every suitable topographic feature of the landscape into pumped storage, et voila!, energy slaves forever.

An admirable dream, but I’m gonna let that bandwagon go on down the street without me. I share the opinion that boat sailed for NeverneverLand quite a long time ago. What already exists and whatever still gets built will keep some lights on for awhile, but preservation of industrial civilization seems to me unattainable.

 

There must be a consequence right? Yes, I think there is and nobody is gonna like what I think it will be. At some threshold level of wage slave unwagedness the perfumed princes of the shrunken “protected class” (pace Peggy Noonan) will regretfully determine that a return to indentured servitude is necessary for the maintenance of moral fabric (and the preservation of their class). Rumor has it, this is already emerging as a feature of the injustice system. The next obvious step would be press gangs grabbing people off the streets and in their homes (hovels?) to sell at auction or gift to a powerful enemy, etc.

Sounds too far fetched? It is approximately what happened in Nazi Germany. The unemployed were rounded up and forced to work on public works projects. Jews weren’t just sent to camps to be gassed, they also went to camps next to industrial facilities to work as slaves to sustain the German economy and war effort. Even Auschwitz was a slave labor camp. Famous sign over the main gate says “Arbeit Macht Frei” (work makes free). If it isn’t already happening, something similar seems likely to emerge in the Nazi glorifying madhouse called Ukraine.

This was difficult to write. It can’t have been easy to read. But, to paraphrase one of recent history’s real shitheads, we must live the dark ages with the human species we have, not the one we might wish we had.

There is an ageless quip about not shooting the messenger, but who else ya gonna shoot when he’s the only one standing there.

Let the 10 minutes hate begin.

 

 

Feb 282017
 
 February 28, 2017  Posted by at 10:29 am Finance Tagged with: , , , , , , , ,  Comments Off on Debt Rattle February 28 2017


Ben Shahn L.F. Kitts general store in Maynardville, Tennessee 1935

 

A Hole in the Head (Jim Kunstler)
Trump’s Fed Can Start a Central Bank Revolution (BBG)
Trump Puts Final Touches on Speech Focusing on Economy, Defense (BBG)
Number Of Distressed US Retailers At Highest Level Since Great Recession (MW)
The Housing Crisis (Renegade)
China’s Continuing Credit Boom (NYFed)
ADB Says Emerging Asia Infrastructure Needs $26 Trillion by 2030 (BBG)
Greece Said to Expect Revised Bailout Proposal for Tuesday Talks
French Court Probes Leave Le Pen Unscathed as Fillon Bid Falters (BBG)
Shell 1991 Film Warned Of Climate Change Danger (G.)
Britain’s Child Migrant Program: Why 130,000 Children Were Shipped Abroad (G.)
Slavery Claims As UK Child Sex Abuse Inquiry Opens (AFP)

 

 

Theory vs practice is a worthy discussion….

A Hole in the Head (Jim Kunstler)

We need a new civil war like we need a hole in the head. But that’s just it: America has a hole in its head. It’s the place formerly known as The Center. It didn’t hold. It was the place where people of differing views could rely on each other to behave reasonably around a touchstone called the National Interest. That abandoned place is now cordoned off, a Chernobyl of the mind, where figures on each side of the political margin fear to even sojourn, let alone occupy, lest they go radioactive. Anyway, the old parties at each side of the political transect, are melting down in equivalent fugues of delusion, rage, and impotence — as predicted here through the election year of 2016. They can’t make anything good happen in the National Interest.

They can’t control the runaway rackets that they engineered in legislation, policy, and practice under the dominion of each party, by turns, going back to Lyndon B. Johnson, and so they have driven themselves and each other insane. Trump and Hillary perfectly embodied the climactic stage of each party before their final mutual sprint to collapse. Both had more than a tinge of the psychopath. Trump is the bluff that the Republicans called on themselves, having jettisoned anything identifiable as coherent principles translatable to useful action. Hillary was an American Lady Macbeth attempting to pull off the ultimate inside job by any means necessary, her wickedness so plain to see that even the voters picked up on it. These two are the old parties’ revenge on each other, and on themselves, for decades of bad choices and bad faith.

[..] Something like this has happened before in US history and it may be cyclical. The former Princeton University professor and President, Woodrow Wilson, dragged America into the First World War, which killed over 53,000 Americans (as many as Vietnam) in only eighteen months. He promulgated the Red Scare, a bit of hysteria not unlike the Race and Gender Phobia Accusation Fest on the Left today. Professor Wilson was also responsible for creating the Federal Reserve and all the mischief it has entailed, especially the loss of over 90% of the dollar’s value since 1913. Wilson, the perfect IYI of that day.

The reaction to Wilson was Warren Gamaliel Harding, the hard-drinking, card-playing Ohio Main Street boob picked in the notorious “smoke-filled room” of the 1920 GOP convention. He invoked a return to “normalcy,” which was not even a word (try normality), and was laughed at as we now laugh at Trump for his idiotic utterances such as “win bigly” (or is that big league?). Harding is also known for confessing in a letter: “I am not fit for this office and should never have been here.” Yet, in his brief term (died in office, 1923), Harding navigated the country successfully through a fierce post-World War One depression simply by not resorting to government intervention.

Read more …

… also when it comes to the Fed.

Trump’s Fed Can Start a Central Bank Revolution (BBG)

President Donald Trump will select three members of the Federal Reserve board during his term in office, including a replacement chair for Janet Yellen when her appointment expires early next year. He should seize the chance to refresh the Fed with faces from the business community, adding executives to the roster of PhD economists who currently run monetary policy in most of the world. The Fed appointments come at a key juncture in U.S. economic policy, one that makes business knowhow an even more valuable commodity for a rate-setter than usual. Trump’s fiscal policies will set a new backdrop for the monetary policy environment, given his intention to cut personal and business tax rates and boost investment in the nation’s infrastructure.

So appointing executives to the Fed who’ve had to take fiscal and monetary policy into account when making decisions on where and when to build new factories or make other capital expenditure decisions makes sense. Torsten Slok, the chief international economist for Deutsche Bank, sent around a chart last week showing how the composition of the Fed has become increasingly focused on PhD economists: It’s little wonder that in this populist age central bank independence is under attack. As Bloomberg News reported on Monday, the rise of populism is putting pressure on central banks as “institutions stuffed with unelected technocrats wielding the power to affect the economic fate of millions.” Leavening the boards of policy makers with executives who’ve made hiring and firing decisions and have helped build companies would be a way to address the perception that decisions about borrowing costs are made in ivory towers by economists who’ve all read the same textbooks but don’t inhabit the same world as the people they’re supposed to serve.

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Entertainment 2017-style.

Trump Puts Final Touches on Speech Focusing on Economy, Defense (BBG)

President Donald Trump was still working Monday evening on the final touches of an address to Congress that will focus on economic opportunity and national security, administration officials said. The officials, who briefed reporters on the eve of the address on the condition of anonymity, said the speech will offer a vision of where Trump wants to take the country as well as an early accounting of campaign promises he has already delivered on through executive actions such as the U.S. withdrawal from the Trans-Pacific Partnership trade agreement. They declined to say whether the president would offer more concrete proposals on major goals, such as rebuilding U.S. infrastructure, rewriting the tax code and replacing the Obamacare health plan.

Trump’s speech comes as the new president tries to stabilize his administration after a turbulent start marked by struggles implementing an initial flurry of executive orders and a controversy over contacts between Trump advisers and Russian officials that led to the resignation of his national security adviser. While Trump’s inauguration speech offered a gloomy portrait of an America racked by violence and economic decay, White House press secretary Sean Spicer said earlier Monday that the address to Congress will strive for an optimistic vision focused on “the renewal of the American spirit.”

Surveys show a deep partisan divide over the president’s performance. A Wall Street Journal/NBC News poll released Monday showed Trump’s approval rating at 44% – a record low for a new president. But 85% of Republicans see Trump favorably, versus just 9% of Democrats. National security was the key theme of an early glimpse of the budget the White House offered on Monday. Administration officials said the president’s first budget would seek to boost defense spending by $54 billion – offset by an equivalent cut from other discretionary spending.

Read more …

How to kill a city part 827.

Number Of Distressed US Retailers At Highest Level Since Great Recession (MW)

The number of U.S. retailers ranked at the most-distressed level of the credit-rating spectrum has more than tripled since the Great Recession of 2008-2009 and is heading toward record levels in the next five years, Moody’s Investors Service said Monday. The rating agency is the latest to weigh in on the state of the sector, and has 19 names in its retail and apparel portfolio, 14% of which are now trading at Caa/Ca. That’s deep into speculative, or “junk,” territory. It’s also a percentage close to the 16% considered distressed during the 2008/2009 period, said a Moody’s report led by retail analyst Charles O’Shea. The rise is part of a wider trend affecting sectors across Moody’s coverage that has retail replacing oil and gas as the most-troubled industry.

Retailers are in the midst of a secular shift to online sales led by juggernaut Amazon.com and that’s forcing many of them to spend heavily on their e-commerce operations. At the same time, mall traffic has slowed dramatically as consumer behavior changes, forcing many to discount heavily, hurting profit margins. The 19 issuers on Moody’s list have more than $3.7 billion of debt maturing in the next five years, with about 30% of that total coming due by the end of 2018. The number is even higher when private credit is included. “While credit markets continue to provide ready access for companies spanning the rating spectrum—allowing many to proactively refinance debt and bolster balance sheets—that could change abruptly if market conditions or investor sentiment shift,” said O’Shea.

Read more …

How to kill a city part 828.

The Housing Crisis (Renegade)

Why is UK housing now so out of reach for so many people? Yes, property has been a safe bet, but we ask what are the economic risks and the social side effects of ever-increasing house prices? Host Ross Ashcroft is joined by Dr Rebecca Ross and economist Professor Steve Keen.

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These numbers are beyond fantasy.

China’s Continuing Credit Boom (NYFed)

Debt in China has increased dramatically in recent years, accounting for roughly one-half of all new credit created globally since 2005. The country’s share of total global credit is nearly 25%, up from 5% ten years ago. By some measures (as documented below), China’s credit boom has reached the point where countries typically encounter financial stress, which could spill over to international markets given the size of the Chinese economy. To better understand the associated risks, it is important to examine the drivers of China’s expansion in credit, the increasing complexity of its financial system, and evidence that its supply of credit may be growing more rapidly than reported. Note, however, that there are several features of China’s financial system that reduce the threat of a financial disruption.

Nonfinancial debt in China has increased from roughly $3 trillion at the end of 2005 to nearly $22 trillion, while banking system assets have increased sixfold over the same period to over 300% of GDP. In 2016 alone, credit outstanding increased by more than $3 trillion, with the pace of growth still roughly twice that of nominal GDP. As a result, the “credit-to-GDP gap”—the difference between the debt-to-GDP ratio and its long-run trend—has reached almost 30 percentage points. The international experience suggests that such a rapid buildup is often followed by stress in domestic banking systems. Roughly one-third of boom cases end up in financial crises and another third precede extended periods of below-trend economic growth.

As seen in the chart below, rising nonfinancial sector debt was driven initially by a surge in corporate borrowing in response to the global financial crisis. This additional debt was comprised mostly of medium- and long-term corporate loans related to infrastructure and property projects.

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Better start printing then.

ADB Says Emerging Asia Infrastructure Needs $26 Trillion by 2030 (BBG)

Asia’s infrastructure race is just getting started. Emerging economies across the region will need to invest as much as $26 trillion on building everything from transport networks to clean water through 2030 to maintain growth, eradicate poverty and offset climate change. That’s according to an Asian Development Bank report released Tuesday that highlights the need for massive construction and upgrading of public works and for much greater private sector investment. Leaving out spending to mitigate climate change, some $22.6 trillion will still be needed over the same period, the ADB said. Big-ticket investment of $14.7 trillion is needed for power, $8.4 trillion for transport, $2.3 trillion for telecommunication costs and $800 billion for water and sanitation, adjusted for climate change.

The bulk of infrastructure work is needed in East Asia, which accounts for 61% of the ADB estimate. As a percentage of GDP, the Pacific leads all other sub regions needing investment valued at 9.1% of GDP, followed by South Asia at 8.8%. The new projection of a $1.7 trillion annual infrastructure need, adjusted for climate change, is more than double the $750 billion that the Manila-based development bank estimated in 2009–though the latest report looks at 45 of the ADB’s developing members compared with 32 last time and uses 2015 prices compared to 2008 ones.

Read more …

Hard to see how this sadistic play can survive the various elections.

Greece Said to Expect Revised Bailout Proposal for Tuesday Talks

Greece’s auditors are pulling together a list of policies the country needs to implement to unlock additional bailout funds as they prepare for the resumption of talks with Athens on Tuesday, two people familiar with the matter said. Greece has asked European lenders for a draft Supplemental Memorandum of Understanding and the IMF for a Memorandum of Economic and Financial Policies as it braces for details of creditor demands, the people said, declining to be identified as negotiations between the two sides aren’t public. The government expects an accord in March or early April, but the scale of pending issues raises concerns they may be politically hard to sell at home, they said.

Greek Prime Minister Alexis Tsipras’s government last Monday agreed to legislate structural reforms demanded by the IMF that will lower the threshold of tax-free income and amend the pension system by 2019, effectively crossing what it had once characterized as a red line. The government says the deal won’t increase austerity since the new legislation will include stimulus measures in addition to belt-tightening reforms. Tsipras told lawmakers on Friday that the bailout review can be completed by March 20 when euro–area finance ministers are set to meet in Brussels. It could drag on to the next Eurogroup meeting on April 7th given the number of outstanding issues that need to be resolved, the people said. Greece is looking for a “global deal” by May that would also include potential decisions on medium-term debt-relief measures and the inclusion of Greek bonds in the ECB’s debt-purchase program.

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Because Fillon is the establishment.

French Court Probes Leave Le Pen Unscathed as Fillon Bid Falters (BBG)

Prosecutors’ interventions in the French election have so far done more damage to the establishment’s one-time champion than the nationalist firebrand vowing to overthrow the system. The Republican Francois Fillon and National Front leader Marine Le Pen both say the criminal probes they face are political plots against them, but it’s only Fillon, a church-going 62-year-old former prime minister, who has been set back by the allegations. Le Pen’s suspected misuse of her allowance from the European Parliament hasn’t hurt her at all. “The National Fronts is seen as persecuted by the system so their supporters think that if everyone else has gotten rich of the system, it’s good for them to get some of that money back,” said Jean-Yves Camus, a political scientist linked to the Jean Jaures research institute.

“Fillon tried to use the conspiracy angle but it doesn’t work because he’s from the system.” On Tuesday, a committee of lawmakers in Brussels will consider a request from the French courts to strip Le Pen of her parliamentary immunity over two separate cases of defamation and publishing violent images of Islamic State killings on Twitter. The committee is due to release its recommendations to the EU parliament next week, and the full chamber will vote on the issue later in March. Le Pen is battling a range of mainstream politicians asking for one more chance to address voters’ concerns about lackluster economic growth and the perceived threat of immigration and terrorism. Instead, she’s offering voters a chance to upend the status quo by putting up border controls, stopping mass immigration and pulling out of the euro.

Read more …

This is a surprise to anyone?

Shell 1991 Film Warned Of Climate Change Danger (G.)

The oil giant Shell issued a stark warning of the catastrophic risks of climate change more than a quarter of century ago in a prescient 1991 film that has been rediscovered. However, since then the company has invested heavily in highly polluting oil reserves and helped lobby against climate action, leading to accusations that Shell knew the grave risks of global warming but did not act accordingly. Shell’s 28-minute film, called Climate of Concern, was made for public viewing, particularly in schools and universities. It warned of extreme weather, floods, famines and climate refugees as fossil fuel burning warmed the world. The serious warning was “endorsed by a uniquely broad consensus of scientists in their report to the United Nations at the end of 1990”, the film noted.

“If the weather machine were to be wound up to such new levels of energy, no country would remain unaffected,” it says. “Global warming is not yet certain, but many think that to wait for final proof would be irresponsible. Action now is seen as the only safe insurance.” A separate 1986 report, marked “confidential” and also seen by the Guardian, notes the large uncertainties in climate science at the time but nonetheless states: “The changes may be the greatest in recorded history.” The predictions in the 1991 film for temperature and sea level rises and their impacts were remarkably accurate, according to scientists, and Shell was one of the first major oil companies to accept the reality and dangers of climate change.

But, despite this early and clear-eyed view of the risks of global warming, Shell invested many billions of dollars in highly polluting tar sand operations and on exploration in the Arctic. It also cited fracking as a “future opportunity” in 2016, despite its own 1998 data showing exploitation of unconventional oil and gas was incompatible with climate goals.

Read more …

What nation kicks out its own children…

Britain’s Child Migrant Program: Why 130,000 Children Were Shipped Abroad (G.)

More than 130,000 children were sent to a “better life” in former colonies, mainly Australia and Canada, from the 1920s to 1970s under the child migrant programme. The children, aged between three and 14, were almost invariably from deprived backgrounds and already in some form of social or charitable care. It was believed, they would lead happier lives. Charities such as Barnardo’s and the Fairbridge Society, the Anglican and Catholic churches and local authorities helped with the organisation of the emigration. Once there, the children were often told they were orphans to better facilitate their fresh start. The parents – many of them single mothers forced to give up their child for adoption because of poverty or social stigma – believed this was giving them best chance in life, though often did not have details of where their offspring were sent to.

The reality, for some of those children, was a childhood of servitude and hard labour at foster homes: on remote farms, at state-run orphanages and church-run institutions. They were often separated from siblings. Some were subjected to physical and sexual abuse. In 2010, the then prime minister, Gordon Brown, issued an official apology, expressing regret for the “misguided” programme, and telling the Commons: “To all those former child migrants and their families … we are truly sorry. They were let down. “We are sorry they were allowed to be sent away at the time when they were most vulnerable. We are sorry that instead of caring for them, this country turned its back”. He announced a £6m fund to reunite families that had been torn apart. The last children sailed in 1967. But it is only recently, as their stories have been told, that details of the abuse, and the official sanction which made it possible, has become public.

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…only to have them enslaved and abused.

Slavery Claims As UK Child Sex Abuse Inquiry Opens (AFP)

England’s mammoth inquiry into historical child sex abuse was told of the “torture, rape and slavery” suffered by child migrants shipped to Australia, at its first public hearings on Monday. The wide-ranging Independent Inquiry into Child Sexual Abuse opened by looking at the schemes that sent thousands of vulnerable children to far-flung parts of the Commonwealth in the decades after World War II. David Hill broke down as he told the inquiry of the “endemic” sexual abuse at the school he was sent to in Australia. “I hope this inquiry can promote an understanding of the long-term consequences and suffering of those who were sexually abused,” he said. “Many never recover and are permanently afflicted with guilt, shame, diminished self-confidence, low self-esteem, fear and trauma.”

British Prime Minister Theresa May set up the inquiry in 2014 when she was interior minister. The British Empire sent some 150,000 children abroad over 350 years, according to a 1998 parliamentary study, although the probe started Monday by looking at use of the practice after World War II. It was justified as a means of slashing the costs of caring for lone children and providing disadvantaged young people with a fresh start, while meeting labour shortages in the Commonwealth and populating colonial-era lands with white British settlers. Between 1945 and 1970, youngsters were sent mainly to Australia, but also Canada, New Zealand and what is now Zimbabwe — often without the consent of their families.

But the promise of a good upbringing and an exciting new life in the sun was often, in reality, a world of forced labour, brutal treatment and sexual assault in remote institutions run by churches and charities. “They sent us to a place that was a living hell,” victim Clifford Walsh told the BBC. Oliver Cosgrove was sent to Australia in 1941, one of an estimated 5,000 to 6,000 children shipped there from 1922 to 1967. “Those who were abused tried in vain to tell others, who they hoped and believed might assist them. But they didn’t,” his representative told the inquiry. “This was a systematic and institutional problem.”

Read more …

May 312016
 
 May 31, 2016  Posted by at 9:14 am Finance Tagged with: , , , , , , ,  6 Responses »


Jack Delano Long stairway in mill district of Pittsburgh, Pennsylvania 1940

Mizuho Chief: Tax Delay Means Abenomics Has Failed (WSJ)
One-Minute Plunge Sends Chinese Stock Futures Down by 10% Limit (BBG)
The Big Short Is Back in Chinese Stocks (BBG)
You’re Witnessing The Death Of Neoliberalism – From Within (G.)
Australia’s Big Four Banks Are Much More Vulnerable Than They Appear (Das)
Ceta: The Trade Deal That’s Already Signed (G.)
Britain Is ‘World’s Most Corrupt Country’, Says Italian Mafia Expert (ES)
The Untold Story Behind Saudi Arabia’s 41-Year US Debt Secret (BBG)
Eric Holder Says Edward Snowden Performed A ‘Public Service’ (CNN)
Vague Promises of Debt Relief for Greece (NY Times Ed.)
Glitch In Greek Bailout Talks Fuels Fears Of Delay (Kath.)
German Unemployment Rate Falls to Record Low (BBG)
Majority Of Athens Homeless Ended Up On Street In Past 5 Years (Kath.)
More Than 45 Million Trapped In Modern Slavery (AFP)

Damned if you do, doomed if you don’t.

Mizuho Chief: Tax Delay Means Abenomics Has Failed (WSJ)

The chief of Mizuho Financial Group said Japan risks a credit-rating downgrade if Prime Minister Shinzo Abe delays a scheduled sales-tax increase without explaining how the government plans to cut its deficit. Yasuhiro Sato, president of Japan’s second-largest bank by assets, said Mr. Abe’s framing of such a decision would determine whether it sparked concerns about the government’s credibility regarding its plans for fiscal consolidation. “The worst scenario is [the government] will just announce a delay in the tax increase. That could send a message that Abenomics has failed or Japan is heading for a fiscal danger zone and then it will harm Japanese government bonds’ credit ratings,” Mr. Sato said in an interview, referring to the prime minister’s growth program.

Mr. Abe acknowledged for the first time Friday that he was considering delaying an increase in the sales tax to 10% from 8% scheduled to take effect in April next year. He said he would decide before an upper house election to be held in July, but Japanese media have reported that a decision could come this week. Mr. Abe has delayed the tax increase once, after the rise to 8% in April 2014 derailed an economic recovery. Consumer spending has yet to fully rebound, and some economists say the prospect of another tax increase next year is already weighing on spending. Mr. Sato acknowledged that raising the tax again would pose a risk to Japan’s economy. “There will be a risk in either case of raising the tax or not, so as long as the government demonstrates a clear road map for fiscal reconstruction, Japanese credibility likely won’t be hurt so much,” he said.

Some bankers say Japan could damage its international credibility if it fails to raise taxes on schedule. The tax increases are part of long-standing efforts to reach a primary government surplus by 2020. A primary surplus is a balanced budget excluding interest payments on government debt. Japan’s government debt is among the largest in the world relative to the size of its economy. Moody’s Investors Service said in a March report, “Postponing the next [sales-tax] increase regardless of the reason would pose a big fiscal burden for Japan.”

Read more …

Last year, “Volumes shrank by more than 90% from their peak”. But there’s simply money in shorting China; you can’t stop that.

One-Minute Plunge Sends Chinese Stock Futures Down by 10% Limit (BBG)

Chinese stock-index futures plunged by the daily limit before snapping back in less than a minute, the second sudden swing to rattle traders this month. Contracts on the CSI 300 Index dropped as much as 10% at 10:42 a.m. local time, recovering almost all of the losses in the same minute. More than 1,500 June contracts changed hands in that period, the most all day, according to data compiled by Bloomberg. The China Financial Futures Exchange is investigating the tumble, said people familiar with the matter, who asked not to be named because they aren’t authorized to speak publicly. The swing follows a similarly unexplained drop in Hang Seng China Enterprises Index futures in Hong Kong on May 16, a move that heightened anxiety among investors facing slower Chinese economic growth and a weakening yuan.

Volume in China’s stock-index futures market, which was the world’s most active as recently as July, has all but dried up after authorities clamped down on what they deemed excessive speculation during the nation’s $5 trillion equity crash last summer. Tuesday’s volatility had little impact on the underlying CSI 300, which rose 3%. “Liquidity in the market is really thin at the moment,” Fang Shisheng at Orient Securities said by phone. “So the market will very likely see big swings if a big order comes in. The order looks like it’s from a hedger.” Chinese policy makers restricted activity in the futures market last summer because selling the contracts is one of the easiest ways for investors to make large wagers against stocks. Volumes shrank by more than 90% from their peak after officials raised margin requirements, tightened position limits and started a police probe into bearish wagers.

Read more …

Xi Jinping is one nervous man right now.

The Big Short Is Back in Chinese Stocks (BBG)

Chinese equities are once again in the cross hairs of short sellers. Short interest in one of the largest Hong Kong exchange-traded funds tracking domestic Chinese stocks has surged fivefold this month to its highest level in a year, according to data compiled by Markit and Bloomberg. The last time bearish bets were so elevated, such pessimism proved well-founded as China’s bull market turned into a $5 trillion rout. While trading in the Shanghai Composite has become subdued this month amid suspected state intervention, pessimists are betting that equities face renewed selling amid a slumping yuan. The Chinese currency is heading for its biggest monthly loss since last year’s devaluation as the nation’s economic outlook worsens and the Fed prepares to raise borrowing costs, driving a rally in the dollar.

“Some macro funds are seeking opportunities to short index futures to play the currency movement,” said Wenjie Lu at UBS. “A higher chance of a Fed rate hike means there’s pressure for the yuan to soften.” Short interest in the CSOP FTSE China A50 ETF climbed to 6.1% on May 25, the highest level since April 2015, two months before Chinese equities peaked, and up from 1.3% at the end of last month. Bearish bets in the U.S. traded iShares China Large-Cap ETF jumped to a two-year high of 18% of shares outstanding on the same day, up from 3% a month ago. Even as Chinese equities rallied on Tuesday, traders were rattled by a sudden plunge in index futures. Contracts on the CSI 300 Index dropped as much as 10% at around 10:42 a.m. local time, recovering almost all of the losses in the same minute. The move had little effect on the underlying stock gauge, which rose 2.6% at the break.

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I think there’s more to it than that.

You’re Witnessing The Death Of Neoliberalism – From Within (G.)

You hear it when the Bank of England’s Mark Carney sounds the alarm about “a low-growth, low-inflation, low-interest-rate equilibrium”. Or when the Bank of International Settlements, the central bank’s central bank, warns that “the global economy seems unable to return to sustainable and balanced growth”. And you saw it most clearly last Thursday from the IMF. What makes the fund’s intervention so remarkable is not what is being said – but who is saying it and just how bluntly. In the IMF’s flagship publication, three of its top economists have written an essay titled “Neoliberalism: Oversold?”. The very headline delivers a jolt. For so long mainstream economists and policymakers have denied the very existence of such a thing as neoliberalism, dismissing it as an insult invented by gap-toothed malcontents who understand neither economics nor capitalism.

Now here comes the IMF, describing how a “neoliberal agenda” has spread across the globe in the past 30 years. What they mean is that more and more states have remade their social and political institutions into pale copies of the market. Two British examples, suggests Will Davies – author of the Limits of Neoliberalism – would be the NHS and universities “where classrooms are being transformed into supermarkets”. In this way, the public sector is replaced by private companies, and democracy is supplanted by mere competition. The results, the IMF researchers concede, have been terrible. Neoliberalism hasn’t delivered economic growth – it has only made a few people a lot better off. It causes epic crashes that leave behind human wreckage and cost billions to clean up, a finding with which most residents of food bank Britain would agree.

And while George Osborne might justify austerity as “fixing the roof while the sun is shining”, the fund team defines it as “curbing the size of the state … another aspect of the neoliberal agenda”. And, they say, its costs “could be large – much larger than the benefit”. Two things need to be borne in mind here. First, this study comes from the IMF’s research division – not from those staffers who fly into bankrupt countries, haggle over loan terms with cash-strapped governments and administer the fiscal waterboarding. Since 2008, a big gap has opened up between what the IMF thinks and what it does. Second, while the researchers go much further than fund watchers might have believed, they leave in some all-important get-out clauses.

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You kidding me? They’re overloaded to their necks in overvalued property loans.

Australia’s Big Four Banks Are Much More Vulnerable Than They Appear (Das)

Today they face little competition in their home market and have benefited tremendously from Australia’s strong growth, underpinned by China’s seemingly insatiable demand for the country’s gas, coal, iron ore and other raw materials. During the 2012 European debt crisis, Australia’s banks were worth more than all of Europe’s. But Australian financial institutions have made the same fundamental mistake the rest of the country has, assuming that growth based on “houses and holes” – rising property prices and resources buried underground – can continue indefinitely. In fact, despite a recent rebound in Chinese demand, commodities prices look set to remain weak for the foreseeable future. Banks’ exposure to the slowing natural resources sector has reached nearly $70 billion in loans outstanding – worryingly large relative to their capital resources.

If anything, their exposure to the property sector is even more dangerous. Mortgages make up a much bigger proportion of bank portfolios than before – more than half, double the level in the 1990s. And they’re riskier than they used to be: many loans are interest-only, while around 80% have variable rates. With a downturn likely – everything from price-to-income to price-to-rent ratios suggests houses are massively overvalued – losses are likely to rise, especially if economy activity weakens. Australian banks are also more vulnerable to outside shocks than they may first appear. Their loan-to-deposit ratio is about 110%. Domestic deposits fund only around 60% of bank assets; the rest of their financing has to come from overseas. While that hasn’t been a problem recently, Australia’s external position is deteriorating.

The current account deficit is expected to climb to 4.75% in the year ending June 30. Weak terms of trade, a rising budget deficit, slower growth and a falling currency are likely to drive up the cost of funds. If Australia’s economy or the financial sector’s performance falters, or international markets are disrupted, banks’ access to external funds could be threatened.

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“..only 18% of Americans and 17% of Germans support TTIP..”

Ceta: The Trade Deal That’s Already Signed (G.)

The US-Europe deal TTIP (the Transatlantic Trade and Investment Partnership) is the best known of these so-called “new generation” trade deals and has inspired a movement. More than 3 million Europeans have signed Europe’s biggest petition to oppose TTIP, while 250,000 Germans took to the streets of Berlin last autumn to try to bring this deal down. A new opinion poll shows only 18% of Americans and 17% of Germans support TTIP, down from 53% and 55% just two years ago. But TTIP is not alone. Its smaller sister deal between the EU and Canada is called Ceta (the Comprehensive Economic and Trade Agreement). Ceta is just as dangerous as TTIP; indeed it’s in the vanguard of TTIP-style deals, because it’s already been signed by the European commission and the Canadian government. It now awaits ratification over the next 12 months.

The one positive thing about Ceta is that it has already been signed and that means that we’re allowed to see it. Its 1,500 pages show us that it’s a threat to not only our food standards, but also the battle against climate change, our ability to regulate big banks to prevent another crash and our power to renationalise industries. Like the US deal, Ceta contains a new legal system, open only to foreign corporations and investors. Should the British government make a decision, say, to outlaw dangerous chemicals, improve food safety or put cigarettes in plain packaging, a Canadian company can sue the British government for “unfairness”. And by unfairness this simply means they can’t make as much profit as they expected. The “trial” would be held as a special tribunal, overseen by corporate lawyers.

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Would anyone doubt it?

Britain Is ‘World’s Most Corrupt Country’, Says Italian Mafia Expert (ES)

Britain has been described as the most corrupt country in the world, according to a journalist and expert on the Italian Mafia. Roberto Saviano, who wrote best-selling exposés Gomorrah and ZeroZeroZero, made the claim at the Hay Literary Festival. The 36-year-old has been living under police protection for 10 years since revelations were published about members of the Camorra, a Neapolitan branch of the mafia. Mr Saviano told the audience at Hay-on-Wye: “If I asked you what is the most corrupt place on Earth you might tell me well it’s Afghanistan, maybe Greece, Nigeria, the South of Italy and I will tell you it’s the UK. “It’s not the bureaucracy, it’s not the police, it’s not the politics but what is corrupt is the financial capital. 90% of the owners of capital in London have their headquarters offshore.

“Jersey and the Cayman’s are the access gates to criminal capital in Europe and the UK is the country that allows it. “That is why it is important why it is so crucial for me to be here today and to talk to you because I want to tell you, this is about you, this is about your life, this is about your government.” David Cameron came under pressure for the UK to reform offshore tax havens operating on British overseas territories at an anti-corruption summit earlier this month. Mr Saviano also weighed in on the EU referendum debate, warning a vote to leave the union would see Britain even more exposed to organised crime. He added: “Leaving the EU means allowing this to take place. It means allowing the Qatari societies, the Mexican cartels, the Russian Mafia to gain even more power and HSBC has paid £2 billion in fines to the US government, because it confessed that it had laundered money coming from the cartels and the Iranian companies. “We have proof, we have evidence.”

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How power rules.

The Untold Story Behind Saudi Arabia’s 41-Year US Debt Secret (BBG)

Failure was not an option. It was July 1974. A steady predawn drizzle had given way to overcast skies when William Simon, newly appointed U.S. Treasury secretary, and his deputy, Gerry Parsky, stepped onto an 8 a.m. flight from Andrews Air Force Base. On board, the mood was tense. That year, the oil crisis had hit home. An embargo by OPEC’s Arab nations—payback for U.S. military aid to the Israelis during the Yom Kippur War—quadrupled oil prices. Inflation soared, the stock market crashed, and the U.S. economy was in a tailspin. Officially, Simon’s two-week trip was billed as a tour of economic diplomacy across Europe and the Middle East, full of the customary meet-and-greets and evening banquets.

But the real mission, kept in strict confidence within President Richard Nixon’s inner circle, would take place during a four-day layover in the coastal city of Jeddah, Saudi Arabia. The goal: neutralize crude oil as an economic weapon and find a way to persuade a hostile kingdom to finance America’s widening deficit with its newfound petrodollar wealth. And according to Parsky, Nixon made clear there was simply no coming back empty-handed. Failure would not only jeopardize America’s financial health but could also give the Soviet Union an opening to make further inroads into the Arab world. It “wasn’t a question of whether it could be done or it couldn’t be done,” said Parsky, 73, one of the few officials with Simon during the Saudi talks.

At first blush, Simon, who had just done a stint as Nixon’s energy czar, seemed ill-suited for such delicate diplomacy. Before being tapped by Nixon, the chain-smoking New Jersey native ran the vaunted Treasuries desk at Salomon Brothers. To career bureaucrats, the brash Wall Street bond trader—who once compared himself to Genghis Khan—had a temper and an outsize ego that was painfully out of step in Washington. Just a week before setting foot in Saudi Arabia, Simon publicly lambasted the Shah of Iran, a close regional ally at the time, calling him a “nut.” But Simon, better than anyone else, understood the appeal of U.S. government debt and how to sell the Saudis on the idea that America was the safest place to park their petrodollars.

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Inappropriate, illegal, and a public service, all at the same time.

Eric Holder Says Edward Snowden Performed A ‘Public Service’ (CNN)

Former U.S. Attorney General Eric Holder says Edward Snowden performed a “public service” by triggering a debate over surveillance techniques, but still must pay a penalty for illegally leaking a trove of classified intelligence documents. “We can certainly argue about the way in which Snowden did what he did, but I think that he actually performed a public service by raising the debate that we engaged in and by the changes that we made,” Holder told David Axelrod on “The Axe Files,” a podcast produced by CNN and the University of Chicago Institute of Politics. “Now I would say that doing what he did – and the way he did it – was inappropriate and illegal,” Holder added. Holder said Snowden jeopardized America’s security interests by leaking classified information while working as a contractor for the National Security Agency in 2013.

“He harmed American interests,” said Holder, who was at the helm of the Justice Department when Snowden leaked U.S. surveillance secrets. “I know there are ways in which certain of our agents were put at risk, relationships with other countries were harmed, our ability to keep the American people safe was compromised. There were all kinds of re-dos that had to be put in place as a result of what he did, and while those things were being done we were blind in certain really critical areas. So what he did was not without consequence.” Snowden, who has spent the last few years in exile in Russia, should return to the U.S. to deal with the consequences, Holder noted. “I think that he’s got to make a decision. He’s broken the law in my view. He needs to get lawyers, come on back, and decide, see what he wants to do: Go to trial, try to cut a deal. I think there has to be a consequence for what he has done.”

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Times editors’ curious timing.

Vague Promises of Debt Relief for Greece (NY Times Ed.)

European leaders congratulated themselves last week for reaching an agreement to provide more loans to Greece and eventually ease the terms of the country’s huge debt. But there is little to celebrate. Greece is bankrupt in all but name. The country has a debt of more than €300 billion, or about 180% of its GDP, a sum it cannot hope to repay in full. Most of that money is owed to Germany, France, Italy and other countries in the eurozone. After an 11-hour meeting last week, the eurozone finance ministers said that they would lend another €7.5 billion to Greece next month to help it pay off debt and grant it some relief, possibly including lower interest rates and extended payment periods, but not until mid-2018.

The reality is that Greece can’t be squeezed any harder. But the finance ministers are seeking still more spending cuts and increased taxes. They want to see a budget surplus of 3.5% of GDP before interest payments by 2018. A stable and fast-growing country might be able to hit that target, but it is preposterous to expect that from Greece. The IMF wants to see a more realistic surplus of 1.5%. Delaying meaningful debt relief until 2018 will further harm the struggling Greek economy. The Greek unemployment rate was 24.4% in January, and Greece’s economy shrunk in the first three months of the year. The I.M.F., which has also lent Greece money, recently estimated that at its current trajectory, the country’s debt would eventually grow to 250% of GDP.

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Forcing Greece into foolish measures: “..Schaeuble described the decision to raise value-added tax in Greece as “economic foolishness” but noted that Athens was obliged to take that route due to a revenue shortfall.”

Glitch In Greek Bailout Talks Fuels Fears Of Delay (Kath.)

There was fresh concern on Monday that there could be further delays in the disbursement of much-need bailout money to Greece owing to a disagreement between Athens and its creditors, who have demanded changes to prior actions passed in Parliament earlier this month. EU officials on Monday appeared to dismiss Greece’s refusal to implement some of these changes, saying that these are issues that have already been agreed with the Greek government. The country’s lenders had given the green light for the disbursement of a tranche of 10.3 billion euros last week, on the condition the government made amendments to recent legislation it passed on pension, bad loans and privatizations.

However, Finance Minister Euclid Tsakalotos had informed the European Commission representative and the IMF in a letter last week that their demands could not be met, neither could Athens fulfill the demands enshrined in the bailout deal signed last summer to privatize ADMIE, the country’s grid operator, and to freeze the wages of essential services, like those of the coast guard and police. Greece desperately needs the new bailout money to pay state arrears as well as debt repayments to the IMF and European Central Bank in the coming weeks. There were reports on Monday that the government is planning to submit its own amendments on Wednesday to Parliament. If the disagreement between Greece and its creditors persists, then it is likely it will be discussed at the Euro Working Group on Thursday.

In comments on Monday, German Finance Minister Wolfgang Schaeuble described the decision to raise value-added tax in Greece as “economic foolishness” but noted that Athens was obliged to take that route due to a revenue shortfall. “This is why Greece needs an effective public administration,” Schaeuble told a conference on fiscal sustainability, observing that Greek tax collection must be improved to bring in the higher revenues that are being targeted.

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Germany has exported its unemployment to Greece and Spain.

German Unemployment Rate Falls to Record Low (BBG)

German unemployment declined more than economists estimated, pushing the jobless rate to the lowest level since reunification. The number of people out of work fell by a seasonally adjusted 11,000 to 2.695 million in May, data from the Federal Labor Agency in Nuremberg showed on Tuesday. The median estimate in a Bloomberg survey was for a decline of 5,000. The jobless rate dropped to 6.1 percent. The report comes two days before ECB officials convene in Vienna to set monetary policy and assess whether they’ve done enough to sustain an economic recovery in the 19-nation euro region.

The ECB is expected to keep its stimulus plan unchanged after President Mario Draghi announced an expansion of quantitative easing by a third to €80 billion in March and cut the deposit rate further below zero. Unemployment dropped by 8,000 in western Germany and declined by 3,000 in the eastern part of the country, the report showed. Growth momentum in Europe’s largest economy remains strong after gross domestic product expanded at the fastest pace in two years in the first quarter. German business sentiment rose to the highest level in five months in May and consumer prices unexpectedly halted their decline. The Bundesbank predicts the economy will retain its underlying strength, even though expansion will probably slow somewhat this quarter.

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Obviously not a surprise for me, or Automatic Earth readers. And lest we forget: Norway does a lot of good in silence. But more austerity is definitely not going to fix anything at all.

Majority Of Athens Homeless Ended Up On Street In Past 5 Years (Kath.)

71% of the Greek capital’s homeless population has ended up on the streets in the last five years and 21.7% in the last year alone, a study by the City of Athens’s Homeless Shelter (KYADA), funded by the Norwegian government and other European countries, has found. According to the study, which was conducted as part of the “Fighting Poverty and Social Exclusion” program and whose findings were presented by Athens Mayor Giorgos Kaminis on Monday evening, 62% of the capital’s homeless are Greeks, the overwhelming majority (85.4%) are men and most (57%) are aged between 35-55. Of the 451 respondents questioned by KYADA workers from March 2015 until the same month this year, 47% said they ended up on the street after losing their job and 29% said they do not want to move to a shelter or other organized facility.

Less than half of the respondents (41.2%) admitted to using drugs, 7.3% to alcohol and 2% to both. Kaminis also said that in the one-year period, the solidarity program helped distribute 46,156 supermarket food coupons worth around 1.85 million euros to nearly 9,000 beneficiaries in over 3,700 families. “Through its social structures and strong alliances with agencies, partners and simple citizens, the City of Athens help give support to more than 25,000 residents,” Kaminis said at the presentation, which was also attended by Norwegian Ambassador to Athens Jorn Eugene Gjelstad.

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Who we are. Not including debt slaves.

More Than 45 Million Trapped In Modern Slavery (AFP)

More than 45 million men, women and children globally are trapped in modern slavery, far more than previously thought, with two-thirds in the Asia-Pacific, a study showed Tuesday. The details were revealed in the 2016 Global Slavery Index, a research report by the Walk Free Foundation, an initiative set up by Australian billionaire mining magnate and philanthropist Andrew Forrest in 2012 to draw attention to the issue. It compiled information from 167 countries with 42,000 interviews in 53 languages to determine the prevalence of the issue and government responses. It suggested that there were 28% more slaves than estimated two years ago, a revision reached through better data collection and research methods.

The report said India had the highest number of people trapped in slavery at 18.35 million, while North Korea had the highest incidence (4.37% of the population) and the weakest government response. Modern slavery refers to situations of exploitation that a person cannot leave because of threats, violence, coercion, abuse of power or deception. They may be held in debt bondage on fishing boats, against their will as domestic servants or trapped in brothels. Some 124 countries have criminalised human trafficking in line with the UN Trafficking Protocol and 96 have developed national action plans to coordinate the government response.

In terms of absolute numbers, Asian countries occupy the top five for people trapped in slavery. Behind India was China (3.39 million), Pakistan (2.13 million), Bangladesh (1.53 million) and Uzbekistan (1.23 million). As a %age of the population, Uzbekistan (3.97%) and Cambodia (1.65%) trailed North Korea, which the study said was the only nation in the world that has not explicitly criminalised any form of modern slavery.

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Mar 212016
 
 March 21, 2016  Posted by at 9:36 am Finance Tagged with: , , , , , , , , ,  1 Response »


DPC Grace Church, New York 1905

Majority Fears Future Generations ‘Will Never Be Able To Buy A Home’ (G.)
When Older People Do Better Than Those of Working Age (WSJ)
ECB Doing Whatever It Takes Can’t Push Euro-Area Banks to Lend (BBG)
Emerging-Market Currencies Fall Back to Earth After Fed Euphoria (BBG)
China Central Bank Governor Warns Over Corporate Debt (FT)
PBOC See-Saws -Again- On Yuan Rate Guidance (CNBC)
China Has a $590 Billion Problem With Unpaid Bills (BBG)
TTIP: Fake Freedom Moves Closer To Open Slavery (Gerrans)
The New Class Warfare In America (Luce)
Great Barrier Reef Coral Bleaching Threat Raised To Highest Level (G.)
Greece Struggles To Enforce Migrant Accord On First Day (NY Times)
The EU Sells Its Soul To Strike A Deal With Turkey (Münchau)
More Than 50,000 Refugees Now Stranded In Greece (Kath.)
Nine Refugees Trying To Reach Europe Drown Off Libya (AFP)
Two Refugees Die On Arrival On Greek Island (AP)
Three Baby Syrian Refugee Girls Drown Between Turkey, Greece (AFP)

How QE will tear societies apart.

Majority Fears Future Generations ‘Will Never Be Able To Buy A Home’ (G.)

A large majority of people in Britain fears that future generations will never be able to buy or rent a home to settle down in. Research published on Monday shows three-quarters of people worry that long-term homes are out of reach, with the level of concern highest among members of generation X, now aged between 37 and 50, and generation Y, aged between 15 and 36. The poll by Ipsos/ Mori for the housing charity Shelter also found that 25- to 34-year-olds have moved more than twice as frequently per year of their lifetime as pensioners. Shelter said the findings were “alarming” and warned the country was at the “mercy of the housing crisis”, which has left millions facing a “lifetime of instability”.

The survey came as the average house price in England passed the £300,000 mark for the first time, increasing from £299,287 in February to £303,190, according to the property website Rightmove. Asking prices have jumped by more than £100,000 typically over the last decade, it said. In March 2006, the average price was £200,980. Average prices hit new heights across six regions. A typical home now costs £644,045 to buy in London; £399,680 in the south-east; £326,836 in east England; £292,251 in the south-west; £204,140 in the West Midlands; and £177,437 in the north-west. Rents rose on average by 4.8% last year across the UK, according to data from Homelet, an insurance company. They rose 7.7% in London, 6.7% in the east Midlands and 6.5% in the south-east.

Campbell Robb, chief executive of Shelter, said the nation’s housing system was broken. “The fact that vast numbers of people fear their grandchildren will never have a home to put down roots highlights the sad truth that this country is once again at the mercy of a housing crisis. Our current housing shortage means millions are facing a lifetime of instability and, understandably, people are giving up hope. But if our history tells us anything, it’s that together we can make things change. For the sake of future generations we cannot make this crisis someone else’s problem.” He added: “You have graduates starting on £40,000 to £45,000 in London, and they don’t take the jobs because they can’t afford to live in London or can’t afford to buy because it is so expensive. We are seeing a generation of people now in their 50s or 60s who are looking at their children, and their children will be worse off than they are. That is the first generation since WWII that we are seeing that happen to, and that is primarily because of the housing market.”

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More of the above.

When Older People Do Better Than Those of Working Age (WSJ)

In deciphering the many forces behind income inequality, economists are flagging a widening shift in the economic fortunes of the old and everyone else. Older people typically have lower incomes than the general population because many of them have stopped working. But the gap between the incomes of those 65 and older and the rest of the population has narrowed significantly in Europe and the U.S. since the recession. The divergence is exacerbating generational imbalances in government pension systems while highlighting the wage struggles of younger workers. Seniors in the U.S. have recently enjoyed healthier income gains—from government and private pensions, investments and, for those still working, salaries—than their younger counterparts, census data shows.

In some countries, France and Spain among them, people 65 and older now earn more on average than younger people do. The average person 65 and older in the U.S. earns 77% of the income of the average citizen, up from 69% in 2008, at the start of the recession. In the U.K. the figure is 89%, up from 78%. In Spain and France, seniors now earn about 103% and 102% of the average worker’s income, respectively, according to an analysis of data from the EU’s official statistics agency. That’s up from 86% in Spain and 96% in France in 2008. This divergence between generations is in part a reflection of demographic shifts that have been brewing for years, as populations grow older and the wealthy postwar baby boomers in particular reach their golden years.

But it is also widening as a consequence of forces bearing down on the earnings of the young, creating a growing imbalance that threatens to undermine the promise that market economies will deliver rising living standards for successive generations. Younger workers are grappling with flat or falling pay, decreased job security and less-affordable housing, sapping the spending power that helps fuel the economy. As the elderly population increases, younger workers also face a rising bill for the extra tax dollars needed to fulfill past governments’ promises to retirees. In parts of Europe, especially, older generations’ incomes are growing in excess of their children’s, often as a direct result of postcrisis government policy, economists say. Consider the U.K. Between 2008 and 2014, the average annual income of seniors in Britain rose 7.3%, or £1,400. Over the same period, the average annual income of working households fell by 5.5%, or £1,600.

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ECB buys €60 billion (now $80 billion) per month, but: “..Lending to nonfinancial companies and consumers, excluding mortgages, has been stuck at about €6.8 trillion since June 2014..”

ECB Doing Whatever It Takes Can’t Push Euro-Area Banks to Lend (BBG)

The European Central Bank began charging banks interest on deposits in June 2014 to encourage them to lend more to companies and consumers. It hasn’t worked. Deposits at the ECB by euro-area banks in excess of required reserves have jumped sixfold since the introduction of negative interest rates, while lending within the currency bloc has barely budged. Of the €646 billion that banks added in assets during the period, about 85% has ended up as deposits at the central bank.

One reason banks are paying to keep money idle is a lack of demand for loans in an economy still recovering from a double-dip recession and a sovereign-debt crisis. Another is that banks saddled with bad loans or low capital levels and those in the midst of restructuring are reluctant to increase lending. Even the ECB’s latest offer to pay banks interest on money they borrow from the central bank may not do the trick. “They’re not profitable enough to substantially increase lending, so even the negative rate for lending by the ECB to the banks probably won’t help much,” said Jan Schildbach at Deutsche Bank in Frankfurt. “It’s not lack of liquidity or its price that’s the problem.”

Lending to nonfinancial companies and consumers, excluding mortgages, has been stuck at about €6.8 trillion since June 2014, ECB data show, despite the central bank’s liquidity programs to encourage more of those loans. Policy makers have looked at those figures when determining how much cheap money to provide lenders. Banks that increase such loans qualify for more funds. When it went deeper into minus territory on March 10, the ECB said it would use similar criteria to determine if a bank qualifies for negative rates on money it borrows from the central bank. That means the ECB is now willing to pay banks to borrow at the same rate it charges for excess deposits they hold there. And it’s willing to do so even if a bank isn’t increasing lending, as long as the firm is reducing lending at a slower rate than in the previous 12 months.

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Bubble.

Emerging-Market Currencies Fall Back to Earth After Fed Euphoria (BBG)

Emerging-market currencies retreated from multi-month highs as commodity prices fell and the dollar reasserted itself after the Federal Reserve’s dovish turn pushed it down last week. Malaysia’s ringgit led declines, falling from a seven-month high as a drop in Brent crude worsened the outlook for the oil exporter. Currencies from nations dependent on raw materials weakened, including South Africa’s rand and Mexico’s peso. China cut the yuan fixing by the most in three months, while South Korea’s won retreated from the strongest level since December as a technical indicator suggested it’s been overbought against the dollar. The MSCI Emerging Markets Index of stocks declined after entering a bull market Friday.

A gauge of the greenback against its major peers extended its rebound into a second day after slumping to a five-month low last week as the Federal Reserve pared its interest-rate outlook for 2016. That spurred a retreat in the prices of raw materials that have tracked gains in oil this month, damping the export outlook for many developing nations. While China’s economy has stabilized, the longer-term story of slowing growth remains unchanged, according to Bank of Singapore. “The market is making sense of the dovish Fed surprise and thinking that perhaps data in the U.S. will eventually force the Fed’s hand to raise rates more and faster,” said Sim Moh Siong at Bank of Singapore. “I don’t think emerging-market fundamentals have changed all that much.”

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Ouch!: “About one-third of listed Chinese companies owe at least three times as much in debt as they own in assets..”

China Central Bank Governor Warns Over Corporate Debt (FT)

China’s central bank governor has warned that the country’s corporate debt levels are too high and are stoking risks for the economy, just as highly-leveraged Chinese companies have gone on an overseas takeover binge. Adding his voice to a recent chorus of concern by senior Chinese officials, Zhou Xiaochuan, governor of the People’s Bank of China (PBoC), told global business leaders meeting in Beijing that the ratio of lending to gross domestic product was becoming excessive. “Lending and other debt as a share of GDP, especially corporate lending and other debt as a share of GDP, is on the high side,” he said, adding that a highly leveraged economy was more prone to macroeconomic risk. Corporate debt in China has risen to about 160% of GDP, while total debt is about 230%.

The Bank for International Settlements warned this month that a steep rise in private and corporate debt in emerging market economies -“including the largest”- was “eerily reminiscent” of the pre-crisis financial boom in advanced economies. Mr Zhou’s comments came at the end of a week of extraordinary dealmaking by Chinese companies overseas, with Anbang, the Chinese insurance company, bidding nearly $20bn for Starwood Hotels & Resorts and Strategic Hotels & Resorts. Total outbound Chinese merger and acquisitions spending since January is over $100bn, according to figures from Dealogic. Data from 54 Chinese companies that did overseas deals last year show that many are “highly leveraged”, according to S&P.

Chinese officials are concerned that the stability of China’s financial system could be threatened if Chinese companies are unable to repay a large amount of debt, which in turn can threaten economic growth. And as recent months have shown, instability in Chinese financial markets and risks to mainland economic growth rapidly feed through into global markets. [..] Last week China’s chief banking regulator announced a move to try to tackle the country’s bad debt problem by opening the way for the country’s lenders to use debt-for-equity swaps to rid themselves of some of the $200bn of bad bank loans on their balance sheets. Shang Fulin, chairman of the China Banking Regulatory Commission, raised the idea at the closing session of the annual meeting of parliament in Beijing.

The plan has been put forward as a way of tackling the trillions of renminbi of debt that have built up in the Chinese economy as a result of decades of debt-fuelled stimulus and easy credit. Chinese banks’ bad debts stand at Rmb1.27tn, according to official figures, although some analysts believe the real number is many times higher. About one-third of listed Chinese companies owe at least three times as much in debt as they own in assets, according to figures from Wind.

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Pushed it up to the highest this year on Friday, takes it down again today. Yeah, credibility…

PBOC See-Saws -Again- On Yuan Rate Guidance (CNBC)

Strategists are back to debating the direction of China’s currency after the central bank guided the yuan lower on Monday, having let it rise to its highest level of the year against the dollar on Friday. Jan Lambregts, Rabobank’s global head of financial markets research, told CNBC on Monday that he’s anticipating a ten to fifteen% depreciation over the next twelve months. The world’s second-largest economy is facing an unprecedented set of economic and policy challenges and in order to overcome them, the government will have to start making more bold moves in the currency, he explained. “We feel that [yuan depreciation] is a relatively easy step for China compared to the hard, structural reforms they need to do.”

Beijing is expected play down the significance of currency weakness but the country’s rising economic challenges, including a long-awaited restructuring of state-owned enterprises, leave policymakers with little choice, he continued. Following a volatile start to the year, the yuan hit a 2016 high last week following dovish remarks from the U.S. Federal Reserve but recent fixings by the People’s Bank of China revived speculation that authorities may prefer a weaker currency. Monday’s mid-point level was 6.4824 per dollar, 0.3% weaker than the Friday’s mid-point rate of 6.4628. China’s central bank lets the yuan spot rate rise or fall a maximum of 2% against the dollar, relative to the official fixing rate.

Like Lambregts, Michael Heise, chief economist at Allianz, said the yuan could drop to around 7 per dollar as soon as this year. In a recent CNBC editorial, he explained that would bode well with the government’s objective of a market-driven exchange rate.
Should these predictions come true however, it would further damage Beijing’s credibility in the eyes of global markets. Ever since the yuan’s landmark devaluation last August, speculation for further weakness was rife but Beijing has repeatedly shut down those assumptions, warning that it was not targeting more depreciation.

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Look, this is simply an economy in deep trouble.

China Has a $590 Billion Problem With Unpaid Bills (BBG)

Not since 1999 have China’s companies had so much trouble getting customers to actually pay for what they’ve bought. It now takes about 83 days for the typical Chinese firm to collect cash for completed sales, almost twice as long as emerging-market peers. As payment delays spread from the industrial sector to technology and consumer companies, accounts receivable at the nation’s public firms have swelled by 23% over the past two years to about $590 billion, exceeding the annual economic output of Taiwan. The raft of unpaid bills – bigger than at any time since former Premier Zhu Rongji shuttered thousands of state-run companies at the turn of the century – shows how cash shortages at the weakest firms threaten not only banks and bondholders, but also China’s vast web of interconnected supply chains.

With corporate bankruptcies projected to climb 20% this year, more Chinese businesses may be forced to choose between two unpleasant options: keep extending credit to potentially insolvent customers, or cut off the taps and watch sales sink. “There is a knock-on effect through the economy,” said Fraser Howie, the Singapore-based co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise,” who has followed the nation’s markets for more than two decades. “Part of the end game is default and closure.” It’s easy to see why collecting payments is getting harder in China. Businesses and consumers have been squeezed by the deepest economic slowdown since 1990, while overcapacity has fueled an unprecedented stretch of declines in producer prices. Record corporate debt levels have left many firms struggling to meet their liabilities, with corporate insolvencies jumping by 25% in 2015, according to Euler Hermes.

The world’s largest trade credit insurer sees another 20% increase in Chinese bankruptcies this year, the most among 43 major markets. “It’s a big problem when you have rising insolvencies, a bad economic environment and less liquidity for small companies,” said Mahamoud Islam, the firm’s senior Asia economist in Hong Kong. Those headwinds are increasingly visible in Chinese financial statements, where the accounts receivable and sales entries allow analysts to calculate “days sales outstanding,” or how long it takes a firm to get paid. The median collection time of 83 days has climbed from 79 days in 2014 and 55 days in 2010. It’s higher than in any of the world’s 20 biggest economies except Italy, and compares with the 44-day median for companies in the MSCI EM Index. Chinese industrial firms take longest to convert sales into cash, at 131 days, followed by 120 days for technology companies and 118 days for telecommunications firms.

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“The reality is that TTIP is being pushed through in the EU by US authorities and we have no choice in the matter.”

TTIP: Fake Freedom Moves Closer To Open Slavery (Gerrans)

The new trade negotiations – TTIP – sound dull. It combines the US and EU markets to make the process of fleecing the sheep simpler and cheaper for the wolves. Standard procedure, you may say – and you would be right. But what is interesting is that any pretense at democracy has been dropped from the propaganda song sheet. The Telegraph summarized TTIP thus: “The Transatlantic Trade and Investment Partnership is a series of trade negotiations being carried out mostly in secret between the EU and US. As a bi-lateral trade agreement, TTIP is about reducing the regulatory barriers to trade for big business, things like food safety law, environmental legislation, banking regulations and the sovereign powers of individual nations. It is, as John Hilary, Executive Director of campaign group War on Want, said: “An assault on European and US societies by transnational corporations.”

The advantage of TTIP branding from a population-management point of view is that it sounds so boring; a bit like a truncated version of Tippex as envisaged by someone with dyslexia – how evil can it be? The answer is: more evil than drinking noxious white fluid designed to correct typing errors. Under TTIP, public services, education and health services will be open for tender. EU food and cosmetics standards will be brought in line with the much lower standards in operation in the US. What banking protections exist after the last collapse will likely be removed. The walls in data privacy will become porous between the two blocs. And since the US is party to NAFTA, it will mean that EU workers will be in competition with Mexico. Nothing will be allowed to stand in the way of making a buck.

As the Telegraph puts it: “One of the main aims of TTIP is the introduction of Investor-State Dispute Settlements (ISDS), which allow companies to sue governments if those governments’ policies cause a loss of profits. In effect it means unelected transnational corporations can dictate the policies of democratically elected governments.” Put nicely, then, TTIP is a drive to the lowest common denominator between the laws which currently exist in the EU and the US combined with the creation of an unaccountable executive branch committed only to the interests of corporations. This means the workers in both areas will be on an accelerated race to the bottom, able only to compete on the basis of slave wages.

Put more generally, it is the creation of a mega-bloc designed to subsume the EU by stealth and place it in the thrall of the powers which control the US. Of course, those tasked with selling TTIP to the people it is going to fleece, claim nothing but upside. They cite the usual carrots: more jobs, higher wages, lower prices. But then they would say that, wouldn’t they? The reality is that TTIP is being pushed through in the EU by US authorities and we have no choice in the matter. This is where a modern commentator is supposed to be outraged: corporations and government cabals are in collusion – how could they! But I don’t see it that way. This isn’t a freak occurrence. Socrates placed democracy one step away from tyranny. What’s happening now isn’t democracy warping into something fiendish and weird. This is democracy’s natural pathway; where it was always going.

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The classes themselves are being redefined.

The New Class Warfare In America (Luce)

Say what you like about Donald Trump, he knows his market. “I love the poorly educated,” he said recently to cheers from those he loves. The rest of America inhaled sharply. Welcome to a very un-American debate. Once redundant, the term “working class” is now part of everyday conversation. In an age of stifling political correctness, the only people who are fair game in polite society are blue-collar whites. How absurd these people are, we tell each other, and how ignorant. Don’t they know Mr Trump was born rich? Can they really be so stupid as to fall for his con trick? The derision is not limited to liberal elites. Educated conservatives are just as scathing. Take the National Review, a flagship of thinking conservatives, that described Mr Trump as a “ridiculous buffoon with the worst taste since Caligula”.

In January it pulled together 22 intellectuals to condemn Mr Trump’s candidacy as an existential threat to conservatism. Their efforts had no impact on Mr Trump’s fan base. Now the magazine has switched to damning his supporters. By declaring open season on blue-collar whites, Kevin Williamson’s widely read essay on “white working class dysfunction” marks a turning point. Yet he is only putting into writing what many conservatives say. “The truth about these dysfunctional, downscale communities is that they deserve to die,” Mr Williamson writes. “Economically, they are negative assets. Morally, they are indefensible . . . the white American underclass is in thrall to a vicious, selfish culture whose main products are misery and used heroin needles. Donald Trump’s speeches make them feel good. So does OxyContin.”

Margaret Thatcher’s acolyte, Norman Tebbit, once sparked fury by implying the jobless should get on their bikes to find work. Mr Williamson says America’s benighted working classes should hire a U-Haul and move on. As an exercise in condescension, Mr Williamson’s words rival the most inbred hereditary peer. As an economic prescription, it is wide of the mark. Millions of Americans are anchored to blighted neighbourhoods by negative equity, or other ties that bind. Their life expectancy is falling. Their participation in the labour market is dropping. The numbers signing up to disability benefits is rising. Opioid prescription drugs are rife. Those that are white tend to vote for Mr Trump. On Super Tuesday this month, the counties with the highest rates of white mortality – whether to overdoses, suicide or other symptoms of community breakdown – came out heavily for Mr Trump. The correlation was almost exact, according to a Wonkblog study.

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“..corals in the remote far north of the reef, where surface sea temperatures reached 33C in February..”

Great Barrier Reef Coral Bleaching Threat Raised To Highest Level (G.)

Australian environment minister Greg Hunt has been accused of going silent on climate change as the cause of dying coral in the Great Barrier Reef after a bleaching alert was raised to its highest level. Hunt, who surveyed the widespread death of coral in the far north of the reef by plane on Sunday, announced plans for more monitoring and programs to tackle run-off pollution and crown-of-thorns starfish outbreaks. But critics including conservationists and the Queensland environment minister, Steven Miles, said Hunt’s response sidestepped the central role of climate change and heat stress as the cause of the bleaching. Miles said Hunt’s announcements were “window dressing” that duplicated state efforts and ignored the need for a “credible federal government climate policy to address the cause”.

The Great Barrier Reef marine park authority raised the threat level of coral bleaching to a peak of three on Sunday, triggering its highest level of response to “severe regional bleaching” in the northernmost quarter of the 344,400 sq km marine park. The authority’s chairman, Russell Reichelt, said corals in the remote far north of the reef, where surface sea temperatures reached 33C in February, were “effectively bathed in warm water for months, creating heat stress that they could no longer cope with”. “We still have many more reefs to survey to gauge the full impact of bleaching, however, unfortunately, the further north we go from Cooktown the more coral mortality we’re finding,” he said.

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Hey, it’s simple, you just redefine anything you don’t like: “..several European countries recently began screening Syrians to determine whether the cities they came from were buffeted by conflict or considered “safe,” meaning that not all Syrians will be eligible for asylum.”

Greece Struggles To Enforce Migrant Accord On First Day (NY Times)

Greece and the EU scrambled on Sunday to put in place the people and the facilities needed to carry out a new deal intended to address the refugee crisis that is roiling Europe, as hundreds of migrants in rubber dinghies continued to land on the Greek islands from Turkey. The accord, struck between the union and Turkey on Friday, set a 12:01 a.m. Sunday deadline for Turkey to stem the flow of people making clandestine journeys across the Aegean Sea to Greece in an attempt to enter Europe, and required Greece to begin sending back migrants who are not eligible for asylum. Yet processing centers on the Greek island of Lesbos and on several other Greek islands were not adequately staffed to comply immediately with the new measures, and officials said they were waiting for the EU to follow through on a pledge to send at least 2,300 European police and asylum experts to help.

By Sunday afternoon, around 875 migrants in rubber boats had reached the Greek islands since midnight, the government said, despite an operation in Turkey that began Friday to detain migrants and the smugglers who make their journeys possible. Many migrants landing in Lesbos on Sunday appeared to be unaware of the new policies and were reeling from their harrowing journey. Greek television showed black and gray rafts arriving at the island laden with people, some sobbing with relief at having reached Europe, and others nearly unconscious. Two little girls were found drowned, and two Syrian refugees died in the crossings over the weekend. On Sunday, the Greek government began clearing out more than 6,000 migrants who had been waiting at processing centers and camps on several Greek islands, and transporting them on large ferries to Piraeus, the port of Athens, and to Kavala, a port in northern Greece.

From there, they are to be sent to refugee camps recently set up around the country. Nearly 50,000 migrants are stuck on the Greek mainland at camps, in Piraeus and on Greece’s northern border with Macedonia. More than 10,000 people have been living in miserable conditions in the Idomeni camp, on the Macedonian border, after west Balkan countries sealed their borders last month to cut the flow of migrants making their way to Germany and northern Europe. Once emptied of their previous occupants, the migrant centers on the Greek islands are to be used only to process those who make it across the Aegean Sea through a phalanx of patrols run by Frontex, Europe’s border agency, as well as NATO and the Greek and Turkish Coast Guards The Greek authorities will register the migrants and process asylum applications.

Migrants who do not apply for asylum or whose applications are rejected are to be returned to Turkey within two weeks. Under the accord, for every Syrian refugee returned to Turkey, the European Union will resettle one refugee directly from Turkey. For the 10s of 1000s of other migrants stuck in camps around Greece, the situation is less clear. Many of them are Syrian and Iraqi nationals who, for the most part, are considered eligible for political asylum and a program that would relocate them across Europe. Yet governments in several European countries recently began screening Syrians to determine whether the cities they came from were buffeted by conflict or considered “safe,” meaning that not all Syrians will be eligible for asylum. In addition, around one-third of migrants in Greece are from Afghanistan. After several European countries last month abruptly reclassified them as “economic migrants,” most were disqualified from political asylum, and will most likely be repatriated. That process could be lengthy, even after help from other EU countries arrives in Greece.

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Sorry, Wolfgang, way ahead of you on this one.

The EU Sells Its Soul To Strike A Deal With Turkey (Münchau)

The EU had two assets I have always considered un≠assailable, however much I may have questioned various decisions. The first is a lack of alternatives. How else can Europeans confront climate change, a refugee crisis or an over-assertive Russian president if not through the EU? The second is the moral high ground. Compared with the majority of its member states, the EU is less corrupt, more principled and rules-driven. Whereas the world of national politics is full of tacticians out to seek short-term gain, the bloc manages a better mix of politics and policies. It builds broad coalitions and formulates strategic policy objectives. Its horizon extends beyond the life of a parliament. Within a few years those assets have been demolished. The mismanagement of the eurozone crisis made it possible to formulate a rational economic argument for an exit.

Then, on Friday the EU lost its other key asset. The deal with Turkey is as sordid as anything I have seen in modern European politics. On the day that EU leaders signed the deal, Recep Tayyip Erdogan, the Turkish president, gave the game away: Democracy, freedom and the rule of law … For us, these words have absolutely no value any longer. At that point, the European Council should have ended the conversation with Ahmet Davutoglu, the Turkish prime minister, and sent him home. But instead they made a deal with him money and a lot more in return for help with the refugee crisis. Turkey will relocate some 72,000 refugees to the EU a one-for-one swap for every illegal immigrant whom the Turks pick up on smuggler boats in the Aegean Sea. In return, the EU is paying Turkey €6bn and opening up a new chapter in EU accession negotiations -this with a country whose leadership has just abrogated democracy.

The EU is further set to allow visa-free travel to 75m inhabitants of Turkey. The EU not only sold its soul that day, it actually negotiated a pretty lousy deal. I am not in a position to judge whether this deal complies with the Geneva Convention and other parts of international law. I assume that the European Council has made sure it would stand up in court. But even if it is judged to be legal, I have doubts whether it can be implemented. It will be interesting to watch whether the EU will renege on its promises to Turkey if Ankara fails to deliver. Even if the deal is implemented in full, it will not lighten the pressure much. The expected number of refugees making their way into the EU will be a large multiple of the 72,000 agreed with Turkey. A German think-tank has done the maths on refugee flows for this year and has come up with an estimated range of 1.8m-6.4m. The latter figure is a worst-case scenario that would include large numbers from Northern Africa.

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And counting fast.

More Than 50,000 Refugees Now Stranded In Greece (Kath.)

A total of 50,411 migrants and asylum-seekers are currently in Greece according to fresh data provided by the government. According to the data, which were made public Monday, 28,593 migrants and refugees are currently in northern Greece, 13,711 in Attica (Athens), 5,538 on the islands and the rest scattered around the country.

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The Libya route is (re-)opening for real. Terribly predictably. Even more drownings, it’s much longer.

Nine Refugees Trying To Reach Europe Drown Off Libya (AFP)

Nine migrants trying to reach Europe have drowned off Libya and hundreds more been rescued, the Red Crescent said on Sunday amid fears of an increase in crossing attempts as the route from Turkey closes. Leaders from six EU nations led by Britain held talks in Brussels on Friday on how to tackle the flow of migrants across the Mediterranean from Libya after a European naval task force plucked more than 3,100 from the water in just three days. The nine who died were among several hundred migrants who were discovered aboard dilapidated boats off the port of Zawiya, west of Tripoli, on Saturday, Libyan Red Crescent spokesman Malek Mersit said.

A total of 586 migrants were rescued, said Colonel Ayoub Qassem, spokesman for the navy of a Tripoli administration that has disputed power with Libya’s internationally recognised government since 2014. They included 11 children and 60 women, and were mainly Bangladeshis and Sudanese, he said. The drownings came just days after four migrants were killed in a boat fire off Libya and another 187 rescued. European leaders fear that a deal with Turkey to tackle the EU’s worst ever migrant crisis will spark an acceleration in the already large number of crossing attempts from Libya. Around 330,000 have landed in Italy from Libya since the start of 2014. The lawlessness that has reigned in the North African nation since the Nato-backed overthrow of veteran dictator Moamer Qadhafi in 2011 has made it a favoured jumping-off point.

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Saw some BBC coverage of this. Looked like heart attacks perhaps.

Two Refugees Die On Arrival On Greek Island (AP)

Two migrants have been found dead on a boat that arrived on the Greek island of Lesvos, on the first day of the implementation of an agreement between the EU and Turkey on handling the new arrivals. Medical personnel performed CPR on the two men but failed to revive them. The overcrowded boat was carrying dozens of migrants from nearby Turkey on Sunday, the first day for the implementation of the migration agreement between the EU and Turkey. It stipulates how the new arrivals from Turkey will be processed and returned. Some 2,500 migrants currently on Lesvos and other islands are being taken to mainland Greece where they are placed in shelters before EU-wide relocation.

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First thing that happened when the deal came into force. Lovely. Thanks, Europe, you make us proud.

Three Baby Syrian Refugee Girls Drown Between Turkey, Greece (AFP)

A 4-month-old baby girl drowned off the southwestern coast of Turkey when a vessel carrying refugees sank early on March 19, while two other girls, aged between 1 and 2 years-old, were found drowned by Greek Coast Guards off the tiny island of Ro. According to the Turkish Coast Guard, 21 refugees were rescued, but the infant was found dead. The refugee boat reportedly was en route to the Greek island of Chios when it sank off the coast of the Cesme district. Cesme is just 7 kilometers from the island of Chios, providing a tempting target for refugees mostly Syrians fleeing their country s civil war.

Two little girls were found drowned off Ro, while two Syrians suffered heart attacks on arrival at the island of Lesbos, Boris Cheshirkov, a spokesman for the U.N. refugee agency, told AFP. Of the more than 1 million refugees who arrived in the EU last year, more than 850,000 arrived by sea in Greece from Turkey, according to the International Organization for Migration (IOM). Up until mid-March, more than 144,000 arrivals to Greece by sea were reported by the UNHCR, while more than 400 people were reported either dead or missing perilous journey.

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