Sep 292019
 
 September 29, 2019  Posted by at 9:56 am Finance Tagged with: , , , , , , , , ,  23 Responses »


Paul Gauguin Portrait of Ingeborg Thaulow 1877

 

Pelosi Says Public Opinion Shifting In Support Of Impeachment Inquiry (R.)
Pelosi’s House Rule Changes are Key Part of “Articles of Impeachment” (CTH)
Scott Adams Makes the Case for ‘President for Life’ Trump (Ricochet)
The Problem With Impeachment (Chris Hedges)
On The Motives Behind Whistleblower-gate (MoA)
The Latest Plot To Topple Trump: Politics According To -Groucho- Marx (SCF)
State Dept. Ramps Up Probe Into Clinton Email Server (Hill)
Has Australia Really Had a 28-Year Expansion? (St.Louis Fed)
U.S. Income Inequality Worsens, Widening To A New Gap (NPR)
Edward Snowden’s Julian Assange is an Unfamiliar Julian Assange (MPN)

 

 

She made that up.

Pelosi Says Public Opinion Shifting In Support Of Impeachment Inquiry (R.)

U.S. House Speaker Nancy Pelosi said on Saturday that public opinion is now on the side of an impeachment inquiry against President Donald Trump following the release of new information about his conversations with Ukrainian President Volodymyr Zelenskiy. Pelosi this week announced her support for an investigation after the surfacing of a whistleblower complaint that said Trump appeared to solicit a political favor from Ukraine’s president aimed at helping him be re-elected next year. Pelosi for months took a cautious approach in weighing the calls of other Democratic House members to launch impeachment proceedings against Trump, which grew louder after former Special Counsel Robert Mueller testified on July 24 about his probe of Trump and Russian interference in the 2016 election.

“In the public, the tide has completely changed; it could change now – who knows – but right now after seeing the complaint and the IG (Inspector General) report and the cavalier attitude the administration had towards it, the American people are coming to a different decision,” Pelosi said at a journalism event hosted by the Texas Tribune news website. She added that her resistance to holding an impeachment inquiry quickly evolved from urging that fellow Democrats remain cautious of the political fallout ahead of next year’s elections to full steam ahead as details emerged of Trump’s dealings with Ukraine’s leader. “A president of the United States would withhold military assistance paid for by taxpayers to shake down the leader of another country unless he did him a political favor – that is so, so clear,” Pelosi said.

[..] Several Democratic presidential candidates attended the three-day event in Austin, including Mayor Pete Buttigieg, former Representative Beto O’Rourke, Senator Amy Klobuchar and former Housing Secretary Julian Castro, all of whom agreed with Pelosi that the campaign to push Trump from office must focus on policies and not impeachment. While some polls have shown Americans are split on supporting impeachment, Castro, who served under former President Barack Obama, said he thinks the public will increasingly back the inquiry. “Like in Watergate, after more evidence gets out there … you’ll see more people of different political stripes start to support it,” Castro said at the event, referring to moves in 1974 to impeach former President Richard Nixon.

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Pelosi called for impeachment without having seen the transcript or the complaint. That will forever be weird.

Pelosi’s House Rule Changes are Key Part of “Articles of Impeachment” (CTH)

Back in December 2018 CTH noted the significant House rule changes constructed by Nancy Pelosi for the 116th congress seemed specifically geared toward impeachment. {Go Deep} With the House going into a scheduled calendar recess, those rules are now being used to subvert historic processes and construct the articles of impeachment. A formal vote to initiate an “impeachment inquiry” is not technically required; however, there has always been a full house vote until now. The reason not to have a House vote is simple: if the formal process was followed the minority (republicans) would have enforceable rights within it. Without a vote to initiate, the articles of impeachment can be drawn up without any participation by the minority; and without any input from the executive. This was always the plan that was visible in Pelosi’s changed House rules.

Keep in mind Speaker Pelosi selected former insider DOJ official Douglas Letter to be the Chief Legal Counsel for the House. That becomes important when we get to the part about the official full house impeachment vote. The Lawfare group and DNC far-left activists were ecstatic at the selection. Doug Letter was a deep political operative within the institution of the DOJ who worked diligently to promote the weaponized political values of former democrat administrations. Speaker Pelosi has authorized the House committees to work together under the umbrella of an “official impeachment inquiry.” The House Intelligence (Schiff) and Judiciary Committees (Nadler) are currently working together leading this process.

From recent events we can see the framework of Schiff compiling Trump-Ukraine articles and Nadler compiling Trump-Russia articles. Trump-Ukraine via Schiff will likely focus on a corruption angle; Trump-Russia via Nadler will likely focus on an obstruction angle. How many articles of impeachment are finally assembled is unknown, but it is possible to see the background construct as described above. Unlike historic examples of committee impeachment assembly, and in combination with the lack of an initiation vote, Pelosi’s earlier House Rule changes now appear intentionally designed to block republicans during the article assembly process. The minority will have no voice. This is quite a design.

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Not really, but his arguments are interesting, and shared by many: how to put the CIA offside.

Scott Adams Makes the Case for ‘President for Life’ Trump (Ricochet)

No, Scott Adams is not suggesting that Trump be president for life. But Scott is making the case for Trump being the last legitimate president. Hence (my conclusion), if we want our president to be legitimate then we should want Trump to be president for life. And given his age that would not be an oppressively long time. So what is Scott talking about?! He referenced the other day a tweet from the person Scott thinks is the “smartest man he has ever met” — Naval Ravikant: Does it bother anyone else that our elected officials live in a panopticon run by our intelligence agencies? A panopticon is like a one-way mirror where a person can see everything without being seen.

In other words, if you assume that our intelligence service has technological access to conversations, emails, texts by accessing both public networks and “things” owned by elected officials that are connected to the internet, then our intelligence apparatus is in an enormously powerful position vis a vis elected officials. That is, bureaucrats have something on officials that can be used as leverage to override the desires and preferences of constituencies. This delegitimizes the elected politician as acting in the constituents’ interest rather than that of the intelligence community. Earlier Senator Schumer said much the same thing: “Let me tell you: You take on the intelligence community — they have six ways from Sunday at getting back at you.”

Now, according to Scott, Trump is the only elected politician who can resist the threats of the intelligence agencies because his flaws are well-known and flagrant, thus he has the least risk of losing political power from anything the intelligence officials could leak and would be believed. (At this point most voters don’t think or will ever be made to think that Trump is a traitor, intentionally working against the interests of the United States. Nor do they think that he is engaged in any “abuse of power” that is over the line for a president.) This makes him more legitimate as a political leader — from a constituency standpoint — than anyone who could be elected. So why wouldn’t you want Trump to be president for life?

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Chris Hedges has the same reasoning as Scott Adams.

The Problem With Impeachment (Chris Hedges)

Impeaching Donald Trump would do nothing to halt the deep decay that has beset the American republic. It would not magically restore democratic institutions. It would not return us to the rule of law. It would not curb the predatory appetites of the big banks, the war industry and corporations. It would not get corporate money out of politics or end our system of legalized bribery. It would not halt the wholesale surveillance and monitoring of the public by the security services. It would not end the reigns of terror practiced by paramilitary police in impoverished neighborhoods or the mass incarceration of 2.3 million citizens. It would not impede ICE from hunting down the undocumented and ripping children from their arms to pen them in cages. It would not halt the extraction of fossil fuels and the looming ecocide. It would not give us a press freed from the corporate mandate to turn news into burlesque for profit. It would not end our endless and futile wars. It would not ameliorate the hatred between the nation’s warring tribes—indeed would only exacerbate these hatreds.


Impeachment is about cosmetics. It is about replacing the public face of empire with a political mandarin such as Joe Biden, himself steeped in corruption and obsequious service to the rich and corporate power, who will carry out the same suicidal policies with appropriate regal decorum. The ruling elites have had enough of Trump’s vulgarity, stupidity and staggering ineptitude. They turned on him not over an egregious impeachable offense—there have been numerous impeachable offenses including the use of the presidency for personal enrichment, inciting violence and racism, passing on classified intelligence to foreign officials, obstruction of justice and a pathological inability to tell the truth—but because he made the fatal mistake of trying to take down a fellow member of the ruling elite.

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Decent overview of what’s going on.

On The Motives Behind Whistleblower-gate (MoA)

The whistleblower statute says that the matter in question must be an “urgent concern” that is defined as: “… a serious or flagrant problem, abuse, violation of law or Executive order, or deficiency relating to the funding, administration, or operations of an intelligence activity involving classified information, but does not include differences of opinions concerning public policy matters”. At the core of the complaint in question is a claim that Trump used a phone call with President Volodymyr Zelensky of the Ukraine to press Zelensky to investigate two issues. The call memorandum was declassified and published. During the phone call Zelensky had two requests. He wanted U.S. anti-tank weapons and he wanted an invitation to the White House. (He got both.)

Trump also had a request. He asked that Ukrainian authorities investigate two issues of U.S. public interest. The first is the reported interferences by Ukrainian government officials in favor of Hillary Clinton during the 2016 election campaign. This also involved the notorious security company CrowdStrike which made some false claims about Russian hacking in the Ukraine. The second one is the also well-know intervention by then Vice-President Joe Biden against a Ukrainian Attorney General who had an open investigation against a company that was sponsoring his son Hunter Biden. The U.S. and the Ukraine have a treaty that requires them to cooperate on law enforcement matters. That Trump wanted the Ukrainian authorities to investigated these issues was well known.

His personal lawyer Rudi Giuliani had said for several months that he was looking into these questions. The issues pointed out in the complaint are clearly beyond the scope of the whistleblower statute. Trump’s actions with regard to the Ukraine, especially the phone call, were neither outside of any law nor do they involve any intelligence activity. What Trump did during the call was not nefarious. The issue is clearly a question of “differences in opinion concerning public policy matters”. A whistleblower complaint must be send to the relevant agency’s inspector general. If he finds it credible it goes to the head of the agency who decides if it is within the statute and, if it is, sends the complaint to Congress.

The agency’s inspector general Michael Atkinson found the complaint ‘credible’ but, after seeking legal advice, the acting director of national intelligence Joseph Maguire did not forward it to Congress. It was the right thing to do as the content of the complaint is neither ‘whistleblowing’ nor within the relevant statute. What happened next is curious: “The agency’s inspector general, Michael Atkinson, notified Congress that the complaint existed but says he and Maguire have reached an “impasse” over whether to turn it over.” I have found no legal analysis if this was a required move or outside of the usual process. After that step was taken details of the complaint leaked to the press as they were supposed to do.

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I increasingly suspect Hillary will emerge.

The Latest Plot To Topple Trump: Politics According To -Groucho- Marx (SCF)

Right after being falsely accused of conspiring with Russia for the past two and a half years, Trump is suddenly accused of the opposite – of conspiring with Ukraine instead! This Reversal of Fortune – and of accusations – demands that the American public be as stupid and brainwashed as the oppressed population of Oceania in George Orwell’s dark and prophetic classic dystopia “1984.” “We are at War with Eurasia! We have always been at War with Eurasia!” “No! We LOVE Eurasia! We are at War with EASTAsia! We have always been at war with Eastasia!” Clearly, the readers and viewers of the New York Times, the Washington Post, MSNBC, CNN and all the rest of America’s media “Powers That Be” have already been well trained in Orwellian Doublethink and witless stupidity.

Suddenly, President Vladimir Putin of Russia is no longer the Evil Bad Guy plotting with Trump. Now it is new President of Ukraine Volodymyr Zelenskyy, himself a former professional comic actor on television. The Marx Brothers would have loved to co-star with him. Perhaps after being forced out of the presidency Trump, himself a former hit TV star across America, could hire Zelenskyy as his sidekick in a revival of his famous reality television show “The Apprentice.” As the late great British satirist Michael Wharton, who wrote under the nom de plume Peter Simple liked to say – the wilder the fantasy, the more rapidly it was bound to ‘collapse” into the realm which we naively and inaccurately describe as “reality.”

And what is the latest terrible crime that the President of the United States is now –suddenly and without warning – accused of? He dared to investigate whether Hunter Biden, the son of another eminent politician, former vice president Joe Biden was guilty of corruption. Just think of the consequences if Trump and his officials were allowed to continue their investigation unhindered: They might – shockingly! – put some other corrupt former US politicians out of business. Obviously, that would be the most terrible threat imaginable to the Home of the Brave and the Land of the Free.

No wonder the US Deep State hates Donald Trump! But there is another goal for this concocted scandal. It’s a twofer – a two for one scandal – intended to topple Trump and remove Biden from serious consideration at the same time, clearing the way for the Deep State’s True Candidate – Senator Elizabeth Warren. The shamelessness of this latest concocted scandal would leave Josef Goebbels green with envy and laughing uncontrollably. Unfortunately, it isn’t a joke.

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Hilarious: “It is such an obscene abuse of power and time involving so many people for so many years,” they said. “This has just sucked up people’s lives for years and years.”

I could have sworn they were talking about the Mueller investigation.

State Dept. Ramps Up Probe Into Clinton Email Server (Hill)

The State Department reportedly intensified a probe into former Secretary of State Hillary Clinton’s private email server, contacting dozens of former aides involved in email exchanges that passed through Clinton’s server. The Washington Post reported Saturday that as many as 130 former Clinton aides have been contacted by State Department investigators in recent weeks, with many being informed that they have been found “culpable” for transmitting information that should have been classified at a higher level than it was originally sent. Former Obama administration officials describe the probe to the Post as an extraordinary investigation fueled by political animosity.

But current officials speaking on the condition of anonymity told the newspaper that the probe was structured to avoid the appearance of political bias. The probe, which reportedly reached the stage where former officials began being contacted shortly after Trump’s inauguration, was described by one senior agency official to the Post as having nothing to do with President Trump’s vows to investigate Clinton if elected during the 2016 election. “This has nothing to do with who is in the White House,” the official said. “This is about the time it took to go through millions of emails, which is about three and a half years.” “The process is set up in a manner to completely avoid any appearance of political bias,” another official told the Post.

Former officials involved in the probe described it as a political vendetta, with one telling the Post it was an “abuse of power” by the Trump administration. “It is such an obscene abuse of power and time involving so many people for so many years,” they said. “This has just sucked up people’s lives for years and years.”

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No.

Has Australia Really Had a 28-Year Expansion? (St.Louis Fed)

In July, the U.S. officially entered its longest expansion on record. Naturally, many are wondering if the expansion is sustainable. When asking this question, many turn to the Australian case, as it has been argued that Australia hasn’t had a recession in 28 years. But is this really the case? The figure below shows the growth rate of Australia’s GDP, with recessions shaded gray. (Recessions are defined here as two or more consecutive quarters of negative GDP growth.)

According to this, Australia has not had a recession since 1991 and has been growing since. However, when we look at real per capita GDP growth, the story changes. The figure below shows Australia’s per capita GDP growth rate. Again, recessions are shaded gray and defined as two or more consecutive quarters of negative growth.

As shown in the figure, Australia has had three recessions since 1991 when looking at GDP per capita, the most recent one being from the second quarter of 2018 to the first quarter of 2019. This discrepancy between the growth rate of per capita GDP and the growth rate of GDP implies that population growth has been a key factor for Australia’s economic expansion. A rising population increases the size of the economy, and therefore total output increases, which is reflected in the level of GDP. However, the fact that we do see economic downturns in per capita terms means that population is growing faster than GDP. For nearly 40 years, Australia has had a higher population growth rate than other industrialized economies, as seen in the figure below.

In particular, it had a surge in population around 2008—during the height of the global financial crisis—due to migration. This population growth translated to overall positive GDP growth, but its effect on GDP growth hasn’t been enough to prevent recessions in per capita terms. Per capita recessions are not unique to Australia. In the table below, we compare the number of observed recessions when using GDP growth versus per capita GDP growth for several OECD countries. Again, a recession is defined as two or more consecutive quarters of negative growth.

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On a societal level (in)equality is strongly linked to prosperity.

U.S. Income Inequality Worsens, Widening To A New Gap (NPR)

The gap between the richest and the poorest U.S. households is now the largest it’s been in the past 50 years — despite the median U.S. income hitting a new record in 2018, according to new data from the U.S. Census Bureau. U.S. income inequality was “significantly higher” in 2018 than in 2017, the federal agency says in its latest American Community Survey report. The last time a change in the metric was deemed statistically significant was when it grew from 2012-2013. While many states didn’t see a change in income inequality last year, the income gap grew wider in nine states: Alabama, Arkansas, California, Kansas, Nebraska, New Hampshire, New Mexico, Texas and Virginia.

The disparity grew despite a surging national economy that has seen low unemployment and more than 10 years of consecutive GDP growth. The most troubling thing about the new report, says William M. Rodgers III, a professor of public policy and chief economist at the Heldrich Center at Rutgers University, is that it “clearly illustrates the inability of the current economic expansion, the longest on record, to lessen inequality.” When asked why the rising economic tide has raised some boats more than others, Rodgers lists several factors, including the decline of organized labor and competition for jobs from abroad. He also cites tax policies that favor businesses and higher-income families.

Income inequality is measured through the Gini index, which measures how far apart incomes are from each other. To do that, the index assigns a hypothetical score of 0.0 to a population in which incomes are distributed perfectly evenly and a score of 1.0 to a population where only one household gets all of the income. In the U.S., the Gini index figure had been holding steady for the past several years. But it moved from 0.482 in 2017 to 0.485 in 2018. While that change may seem small, it’s statistically significant, the Census Bureau says. The agency notes that back in 2006, the figure stood at 0.464.

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I haven’t read the book, but this is a little alarming.

Edward Snowden’s Julian Assange is an Unfamiliar Julian Assange (MPN)

NSA whistleblower Edward Snowden and WikiLeaks’ former editor Julian Assange have a complicated relationship. On the one hand, they share important similarities: both are perceived as dangerous enemies by the United States government, and both have been documentary subjects of filmmaker Laura Poitras. On the other hand, they clearly disagree when it comes to the means of achieving government transparency and accountability. After all, if Snowden had agreed with Assange about publishing practices, it is likely that he would have followed Chelsea Manning’s example and sent the NSA documents he collected and disclosed in 2013 to WikiLeaks.

The recent publication of Permanent Record, Snowden’s 336-page memoir, takes the Snowden-Assange dynamic to new—and problematic—heights. When Assange was forcibly dragged out of the Ecuadorian embassy in early 2019, Snowden was among the leading voices condemning the arrest of the WikiLeaks founder, calling it a dangerous assault on journalism. But in his memoir, Snowden uses rhetorical tricks to present Assange and WikiLeaks as his deceitful and irresponsible foils in a blatant and seemingly self-serving effort to highlight his own trustworthiness and accountability. Indeed, reviewers at the Washington Post and New Yorker have already seized upon Snowden’s anti-Assange rhetoric to serve their own anti-Assange agendas.

Proponents of press freedom have become accustomed to Pentagon and national security state attacks on Assange, but Snowden’s puzzling claims about the white-haired Australian and his transparency organization are exceptionally dangerous because they come from an otherwise highly respectable and trustworthy source, and at a time when there is otherwise a virtual media blackout on WikiLeaks. To be sure, Snowden deserves recognition as a courageous whistleblower and as a global champion of privacy rights, but in Permanent Record, Snowden appears willing to use a political prisoner for personal gain, deliberately distorting the truth and perpetuating the imperialistic propaganda that threatens not only Assange’s health but also his very life—just like the corporate media and national security state he exposed in 2013.

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Trans I Re by Fredrik Raddum

 

 

 

 

 

Sep 212019
 
 September 21, 2019  Posted by at 9:03 am Finance Tagged with: , , , , , , , , , , , ,  9 Responses »


Paul Gauguin The Seine in Paris 1875

 

United States Sending Troops To Bolster Saudi Defenses After Attack (R.)
Trump Says He’s Sanctioning Iran’s National Bank (Hill)
Trump Derides MSM Over Biden-Ukraine Story: You’re Gonna Look Really Bad (ZH)
In Call, Trump Urged Ukraine President 8x To Investigate Biden’s Son (CNBC)
WaPo Reports No “Quid Pro Quo” Offered During Phone Call (ZH)
Missing Piece to the Ukraine Puzzle (Solomon)
Is WeWork a Fraud? (Hawksberry)
‘The Men Who Plundered Europe’: Bankers On Trial For Siphoning €60bn (G.)
Desperate Central Bankers Grab for More Power (Brown)
Hopes For Trade Breakthrough Fade As China Cancels US Farm Visits (R.)
President of the Selfies (Kunstler)
France Rejects Edward Snowden’s Asylum Request, Fears Major Fallout With US (ZH)
Julian Assange: Justice Denied (Sagir)

 

 

This Reuters journalist unexpectedly gets it just right: “The Pentagon’s late Friday announcement appeared to close the door to any imminent decision to wage retaliatory strikes against Iran following the attack..”

United States Sending Troops To Bolster Saudi Defenses After Attack (R.)

U.S. President Donald Trump on Friday approved sending American troops to bolster Saudi Arabia’s air and missile defenses after the largest-ever attack on the kingdom’s oil facilities, which Washington has squarely blamed on Iran. The Pentagon said the deployment would involve a moderate number of troops – not numbering thousands – and would be primarily defensive in nature. It also detailed plans to expedite delivery of military equipment to both Saudi Arabia and the United Arab Emirates. Reuters has previously reported that the Pentagon was considering sending anti-missile batteries, drones and more fighter jets. The United States is also considering keeping an aircraft carrier in the region indefinitely.

“In response to the kingdom’s request, the president has approved the deployment of U.S. forces, which will be defensive in nature and primarily focused on air and missile defense,” U.S. Defense Secretary Mark Esper said at a news briefing. “We will also work to accelerate the delivery of military equipment to the kingdom of Saudi Arabia and the UAE to enhance their ability to defend themselves.” The Pentagon’s late Friday announcement appeared to close the door to any imminent decision to wage retaliatory strikes against Iran following the attack, which rattled global markets and exposed major gaps in Saudi Arabia’s air defenses.

Trump said earlier on Friday that he believed his military restraint so far showed “strength,” as he instead imposed another round of economic sanctions on Tehran. “Because the easiest thing I could do, ‘Okay, go ahead. Knock out 15 different major things in Iran.’ … But I’m not looking to do that if I can,” Trump told reporters at the White House.

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Jim Rickards’s comment on Twitter: “Trump just sanctioned the central bank of Iran (Bank Markazi). If you’re not a banking expert and want to understand the impact, it’s like turning off the oxygen of a patient in intensive care. The result is predictable.”

Trump Says He’s Sanctioning Iran’s National Bank (Hill)

President Trump announced Friday that he had sanctioned Iran’s national bank, calling them the “highest sanctions ever imposed on a country.” Trump made the comments to reporters during an Oval Office meeting with Australian Prime Minister Scott Morrison. The announcement comes two days after Trump said he had instructed the Treasury Department to increase sanctions on Iran following attacks on two oil facilities in Saudi Arabia. The Trump administration has blamed Iran in the attacks, which took out roughly 5 percent of the global oil supply on Saturday. “These are the highest sanctions ever imposed on a country, we’ve never done it to this level. It’s too bad what’s happening with Iran, it’s going to hell,” Trump told reporters, saying Tehran is “practically broke.”


The Treasury Department said in a statement that it was sanctioning Iran’s central bank, Iran’s national development fund and Etemad Tejarate Pars Co., an Iran-based firm that U.S. officials said is used to conceal financial transfers for purchases by Iran’s defense ministry. Treasury Secretary Steven Mnuchin joined Trump briefly in the Oval Office to announce the new sanctions on Friday. “We are continuing the maximum pressure campaign,” Mnuchin said. “This will mean no more funds going to the [Islamic Revolutionary Guards Corps] or to fund terror, and this is on top of our oil sanctions and our financial institution sanctions.” “The easiest thing I can do, OK go ahead, knock down 15 major things in Iran,” Trump told reporters in the Oval Office. “I could do that and it’s all set to go. But I’m not looking at doing that if I can.”

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“So keep playing it out because you’re gonna look really bad when it falls, and I guess I’m about 22 and 0 and I’ll keep it that way… ”

Trump Derides MSM Over Biden-Ukraine Story: You’re Gonna Look Really Bad (ZH)

A very smug President Trump brushed aside questions over a whistleblower complaint which reportedly involves promises made to Ukraine in exchange for an investigation into former Vice President Joe Biden. Calling the story “ridiculous” and describing the whistleblower as partisan, Trump said that it “doesn’t matter what I discussed,” adding “but I’ll tell you this, somebody ought to look into Joe Biden’s statement where He talked about billions of dollars that he’s not giving to a certain country unless a certain prosecutor is taken off the case. So, somebody ought to look into that and you wouldn’t because he’s a Democrat. And the fake news doesn’t look into things like that, it’s a disgrace.”

Trump was of course referring to a 2018 incident where Biden openly bragged about strongarming Ukraine into firing their top prosecutor, who was leading a wide-ranging corruption investigation into a natural gas firm whose board Hunter Biden sat on. Continuing on, Trump told reporters: “It was a totally appropriate conversation – it was actually a beautiful conversation.” Trump then warned the press they’re barking up the wrong tree after a “very bad week” in which the New York Times was forced to issue a major correction to an article about alleged sexual misconduct by Supreme Court Justice Brett Kavanaugh, after the two journalists who wrote it failed to include evidence from their own anti-Kavanaugh book which significantly undercut their argument.

“You know the press has had a very bad week with Justice Kavanaugh and all those ridiculous charges, and all of the mistakes made at the New York Times and other places,” said Trum, adding: “You’ve had a very bad week, and this will be better than all of ’em, this is another one. So keep playing it out because you’re gonna look really bad when it falls, and I guess I’m about 22 and 0 and I’ll keep it that way. “…keep asking questions and building it up as big as possible so you can have a bigger downfall.”

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A top Ukrainne offical makes really silly statements: “Clearly, Trump is now looking for kompromat to discredit his opponent Biden, to take revenge for his friend Paul Manafort”..

In Call, Trump Urged Ukraine President 8x To Investigate Biden’s Son (CNBC)

President Donald Trump repeatedly urged Ukraine’s president during a telephone call in July to investigate former Vice President Joe Biden’s son Hunter and his involvement with a Ukraine natural gas company, a new report says. The Wall Street Journal reported that Trump encouraged Ukraine President Volodymyr Zelensky “about eight times to work with Rudy Giuliani, his personal lawyer, on a probe, according to people familiar with the matter.” Biden is the current front-runner in the race to win the Democratic presidential nomination and face the Republican nominee, expected to be Trump, in the 2020 election.

Biden on Friday, when asked about Trump’s claims about him and his son, said, “Not one single credible outlet has given any credibility to his assertions. Not one single one. So I have no comment except the president should start to … be president.” [..] The Journal’s new report came as a top Ukraine official reportedly said that Trump “is looking” for Ukraine officials to investigate business dealings of Biden’s son in that country in an effort “to discredit” Biden as he seeks the Democratic presidential nomination.

The official, Anton Geraschenko, told The Daily Beast that Ukraine is ready to investigate Hunter Biden’s relationship with the Ukraine gas company “as soon as there is an official request.” But, he added, “Currently there is no open investigation.” Geraschenko is a senior advisor to Ukraine’s interior minister, who would be in charge of any investigation of Hunter Biden. “Clearly, Trump is now looking for kompromat to discredit his opponent Biden, to take revenge for his friend Paul Manafort, who is serving seven years in prison,” Geraschenko told The Daily Beast.

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Does this settle the ‘dispute’?

WaPo Reports No “Quid Pro Quo” Offered During Phone Call (ZH)

The latest ‘smoking gun’ Democrats have been clinging to in search of that ever-elusive Trump impeachment may have just imploded – after the Washington Post quietly reported on Friday evening that a July 25 phone call between President Trump and Ukrainian President Volodymyr Zelensky did not contain an explicit quid pro quo if Ukraine launched an investigation into former Vice President Joe Biden’s son as initially reported. While President Trump did reportedly “pressure the recently elected leader to more aggressively pursue” the investigation, “Trump did not raise the issue of American military and intelligence aid that had been pledged to Ukraine, indicating there was not an explicit quid pro quo in that call.”

Of course, it has been reported that there were multiple calls – however one might think that the Washington Post’s super high-level anonymous government source would have access to the others as well, and ostensibly would have leaked the most damaging information available. [..] “The revelation that Trump pushed Zelensky to pursue the Biden probe, which was first reported by the Wall Street Journal, represents the most detailed account so far of the president’s conduct that prompted a U.S. intelligence official to file a whistleblower action against the president.” -Washington Post

So – the current US president asked Ukraine to conduct a legal investigation into the former US Vice President, who openly bragged about withholding $1 billion in US loan guarantees unless they fired the guy investigating his son and his son’s company – and there was no quid pro quo offered in exchange for that investigation – at least not on that phone call.

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Giuliani didn’t go looking, the Ukraine did.

Missing Piece to the Ukraine Puzzle (Solomon)

The coverage suggests Giuliani reached out to new Ukrainian President Volodymyr Zelensky’s team this summer solely because he wanted to get dirt on possible Trump 2020 challenger Joe Biden and his son Hunter’s business dealings in that country. Politics or law could have been part of Giuliani’s motive, and neither would be illegal. But there is a missing part of the story that the American public needs in order to assess what really happened: Giuliani’s contact with Zelensky adviser and attorney Andrei Yermak this summer was encouraged and facilitated by the U.S. State Department. Giuliani didn’t initiate it. A senior U.S. diplomat contacted him in July and asked for permission to connect Yermak with him.

[..] Why would Ukraine want to talk to Giuliani, and why would the State Department be involved in facilitating it? According to interviews with more than a dozen Ukrainian and U.S. officials, Ukraine’s government under recently departed President Petro Poroshenko and, now, Zelensky has been trying since summer 2018 to hand over evidence about the conduct of Americans they believe might be involved in violations of U.S. law during the Obama years . The Ukrainians say their efforts to get their allegations to U.S. authorities were thwarted first by the U.S. embassy in Kiev, which failed to issue timely visas allowing them to visit America. Then the Ukrainians hired a former U.S. attorney — not Giuliani — to hand-deliver the evidence of wrongdoing to the U.S. Attorney’s Office in New York, but the federal prosecutors never responded.

The U.S. attorney, a respected American, confirmed the Ukrainians’ story to me. The allegations that Ukrainian officials wanted to pass on involved both efforts by the Democratic National Committee to pressure Ukraine to meddle in the 2016 U.S. election as well as Joe Biden’s son’s effort to make money in Ukraine while the former vice president managed U.S.-Ukraine relations, the retired U.S. attorney told me. Eventually, Giuliani in November 2018 got wind of the Ukrainian allegations and started to investigate. [..] Ukrainian officials also are discussing privately the possibility of creating a parliamentary committee to assemble the evidence and formally send it to the U.S. Congress, after failed attempts to get the Department of Justice’s attention, my sources say.

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Now, THIS is a take-down. Read the whole thing.

Is WeWork a Fraud? (Hawksberry)

WeWork will never ever, in its short history, generate a profit, let alone the tens of billions in revenues necessary to generate anywhere near the $3 billion in earnings required to (even then generously) value the company at £47 billion. A lot of people could have done what Adam Nuemann & Miguel McKelvey did, they don’t because they’re not prepared to engage in a fraud. They can play dumb all they like but when you fiddle with your financials, invent accounting principles, secretly acquire IP and double deal it for millions of dollars back to your own company, market yourselves misleadingly as a ‘technology’ play, cash out close to $1 billion and use that to acquire buildings to lease back to WeWork, employ half your family etc, etc, etc…please for heavens sake don’t try and convince me that they are unaware of what they are doing.

They know exactly what they’re doing. Adam and Miguel purposefully choose to hide those costs under ‘Community-Adjusted EBITA’s’. Why are they still parading WeWork as a technology company, does anybody believe as cunningly intelligent as they are, that they genuinely think WeWork is a ‘technology’ company? Why have they cashed out, and not just a few million dollars as a deposit on a big mortgage but hundreds of millions to buy buildings that they used to further bleed their own ponzi scheme with?. They have cashed out $1 billion whilst posting losses of $1.9 billion. Since their S1 release, Adam & Miguel have slashed their proposed post-IPO valuation by 86% in 4 re-valuations. The price started at $67 billion, then they quickly dropped it to $30/$40bn before again looking down at their calculator and punching buttons quicker than you can blink and coming back with $15/20bn.

As you’re about to click, it plunges 40% to $10bn. From $67 billion to $10 billion in 7 days. It’s pathetic seeing this kind of desperation. I don’t want to be in the room when he realises it’s not even close to being worth anywhere near $1 billion. Within the last 10 days or so, his wife Rebekah has also removed from her extraordinarily unnecessary position, they’ve hastily elected their first female to their Board, halved Adam’s voting power, lost a Chief Communications Officer, their bonds are crashing, two landlords have begun legal proceedings, their principle investor Masayoshi has publicly called for Adam to delay the IPO, even Alexandria Ocasio-Cortez weighed in and warned vulnerable investors Goldman Sachs & JP Morgan are now targeting… ‘you’re getting fleeced!’.

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“Estimated losses include €31.8bn in Germany, at least €17bn for France, €4.5bn in Italy, €1.7bn in Denmark and €201m for Belgium.”

‘The Men Who Plundered Europe’: Bankers On Trial For Siphoning €60bn (G.)

They have been called “the men who plundered Europe”: a group of cowboy traders, seasoned tax lawyers and mathematical whizz kids who are alleged to have conspired in the heart of the City of London to siphon at least €60bn in taxpayers’ money from the state coffers of several EU countries. In Britain, the so-called “cum-ex” scandal, named after the complex derivatives juggling act employed, gained little attention amid the frenzied debate around the UK’s departure from the European Union when the fraud scheme was discovered in 2017. But in continental Europe what Le Monde has described as the “robbery of the century” has done almost as much to shape the view of Britain as Brexit itself.

Dutch media has called it “organised crime in pinstripe suits” and one of the original German whistleblowers saying he now welcomes Britain’s exit from the EU in the hope it could weaken the influence of London investment banking on European financial institutions. This week, a British former investment banker involved in developing the scheme for the first time gave the public an insight into how the scheme worked and what spurred on its architects. Speaking at a regional court in Bonn, Martin Shields, one of two former bankers on trial for 34 instances of serious tax fraud between 2006 and 2011, painted a picture of a London banking scene which lured in the brightest scientists from the country’s top universities and used them to boost their profit margins – without teaching them about the moral and legal consequences of their actions in return.

“This was the environment at that time: a financial industry that – at least as far as I could see – was geared towards maximum profit optimisation,” the 41-year-old told a packed courtroom on Wednesday. “One tool to achieve this goal was tax optimisation: avoiding taxation as far as possible – and taking advantage of any opportunities that could be found or created. This was not the clandestine approach of a few. Rather, I saw it as the clear and openly communicated expectation of most major banks and their customers.” [..] Estimated losses include €31.8bn in Germany, at least €17bn for France, €4.5bn in Italy, €1.7bn in Denmark and €201m for Belgium.

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Is it too late to stop them?

Desperate Central Bankers Grab for More Power (Brown)

Central bankers are acknowledging that they are out of ammunition. Mark Carney, the soon-to-be-retiring head of the Bank of England, said in a speech at the annual meeting of central bankers in August in Jackson Hole, Wyoming, “In the longer-term, we need to change the game.” The same point was made by Philipp Hildebrand, former head of the Swiss National Bank, in an August 2019 interview with Bloomberg. “Really there is little if any ammunition left,” he said. “More of the same in terms of monetary policy is unlikely to be an appropriate response if we get into a recession or sharp downturn.” “More of the same” meant further lowering interest rates, the central bankers’ stock tool for maintaining their targeted inflation rate in a downturn.

Bargain-basement interest rates are supposed to stimulate the economy by encouraging borrowers to borrow (since rates are so low) and savers to spend (since they aren’t making any interest on their deposits and may have to pay to store them). But over $15 trillion in bonds are now trading globally at negative interest rates, yet this radical maneuver has not been shown to measurably improve economic performance. In fact new research shows that negative interest rates from central banks, rather than increasing spending, stopping deflation, and stimulating the economy as they were expected to do, may be having the opposite effects. They are being blamed for squeezing banks, punishing savers, keeping dying companies on life support, and fueling a potentially unsustainable surge in asset prices.

So what is a central banker to do? Hildebrand’s proposed solution was presented in a paper he wrote with three of his colleagues at BlackRock, the world’s largest asset manager, where he is now vice chairman. Released in August to coincide with the annual Jackson Hole meeting of central bankers, the paper was co-authored by Stanley Fischer, former governor of the Bank of Israel and former vice chairman of the U.S. Federal Reserve; Jean Boivin, former deputy governor of the Bank of Canada; and BlackRock economist Elga Bartsch. Their proposal calls for “more explicit coordination between central banks and governments when economies are in a recession so that monetary and fiscal policy can better work in synergy.” The goal, according to Hildebrand, is to go “direct with money to consumers and companies in order to enliven consumption,” putting spending money directly into consumers’ pockets.

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“The United States had removed tariffs overnight from over 400 Chinese products in response to requests from U.S. companies.”

Hopes For Trade Breakthrough Fade As China Cancels US Farm Visits (R.)

A U.S.-China trade deal appeared elusive on Friday after Chinese officials unexpectedly canceled a visit to farms in Montana and Nebraska as deputy trade negotiators wrapped up two days of negotiations in Washington. Chinese officials were expected to visit U.S. farmers next week as a goodwill gesture, but canceled to return to China sooner than originally scheduled, agriculture organizations from Montana and Nebraska said. The United States had removed tariffs overnight from over 400 Chinese products in response to requests from U.S. companies. The Chinese Embassy and the U.S. Department of Agriculture did not immediately respond to requests for comment.


The U.S. Trade Representative’s office issued a brief statement characterizing the two days as “productive” and that a principal-level trade meeting in Washington would take place in October as previously planned. China’s Commerce Ministry, in a brief statement, described the talks as “constructive”, and said they had also had a good discussion on “detailed arrangements” for the high-level talks in October. [..] Trade experts, executives and government officials in both countries say that even if the September and October talks produced an interim deal, the U.S.-China trade war has hardened into a political and ideological battle that runs far deeper than tariffs and could take years to resolve.

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“(Claiming to be a Cherokee was a forgivable way of sharing — sharing useful identities for career advancement.)”

President of the Selfies (Kunstler)

Unlike the 2016 Democratic presidential candidate, Elizabeth Warren doesn’t radiate contempt, loathing, and horror at the task of mingling with the hoi polloi. Rather, she has become famous for staging lengthy sessions after campaign speeches to pose for selfies with her fans. The selfie-seekers, you will notice, are all women. It’s heartwarming as all get out. This is at the center of Senator Warren’s strategy for winning the next election: to cadge all of the women’s vote and become the President of all the women of the United States. It’s a shrewd strategy, to turn the election into a gender-bonding contest, but elections have turned on equally fatuous premises, probably more often than not.

Paradoxically, the lumbering President Trump, with his bay window belly, mystifying bouffant, fourth-grade vocabulary, and grab-them-by-the-pussy approach to romance, scored 53 percent of women’s votes last time around. Perhaps that was more a reflection of his opponent’s titanic loathsomeness than of Mr. Trump’s charms. But it only underscores Ms. Warren’s gambit: all she has to do is swing a generous majority of American women over to her side.

She is, in many ways, an exemplar of her sex. She’s made the best of her corn-fed Oklahoma looks. At 69, she capers energetically around the hustings in spanx and Nina McLemore jewel-toned, popped-collar jackets as though she were America’s yoga instructor, an appealing addition to her previous career as a distinguished Harvard law professor. She scores well on the feelings and sharing index, qualities that most men can only caricature. (Claiming to be a Cherokee was a forgivable way of sharing — sharing useful identities for career advancement.) And she has a palpable edge of anger about all the swindles and injustices in American life today, especially those spawned on Wall Street by the financial patriarchy — hey, who can argue with that one? If she has a husband (she has, Harvard law prof Bruce H. Mann) he might as well be hiding under a rock.

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Cowards. What, they’re French?

France Rejects Edward Snowden’s Asylum Request, Fears Major Fallout With US (ZH)

France’s foreign minister has indicated the country has dismissed former US National Security Agency contractor and leaker Edward Snowden’s asylum request because “it is not the time”. Snowden called on French President and former Rothschild banker Emmanuel Macron to grant him political asylum from the United States, after he’s been living in Russia since the 2013 bombshell leaks were released, having first fled from Hong Kong. “He asked for asylum in France, but also elsewhere, in 2013. At that time, France thought that it was not appropriate, I do not see anything that has changed Thursday, either from a political or a legal point of view,” French Foreign Minister Jean-Yves Le Drian told French TV station CNews on Thursday.

Paris is skittish over the whole issue due to US pressure and what such a move would do to its close relationship with Washington. “An adviser to French President Emmanuel Macron hinted earlier this week that welcoming Snowden to France would lead to a major diplomatic fallout with the U.S.,” Politico Europe reported. The whistleblower, who this week published his memoir, has escaped US prosecution as a guest of Putin’s Russia. He previously said he would “love to see” Macron allow him to live in France. Snowden made a first asylum appeal to France in 2013, which was rejected, and another last week. “I am not asking for a parade. I’m not asking for a pardon,” he said in a recent interview. “What I’m asking for is a fair trial.”

Speaking with France’s Inter radio on Monday as part of a press junket to promote his new memoir, the former NSA contractor said “Protecting whistleblowers is not a hostile act,” adding “Welcoming someone like me is not an attack on the United States.” “I would like to return to the United States. That is the ultimate goal. But if I’m gonna spend the rest of my life in prison, the one bottom line demand that we have to agree to is that at least I get a fair trial. And that is the one thing the government has refused to guarantee because they won’t provide access to what’s called a public interest defense,” Snowden told CBS This Morning.

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Melzer says here: ““Trying to win any aspect of this case in the judicial arena has been a losing game for almost a decade..”

But that goes both ways. Governments haven’t been able to any more than those who are on Julian’s side. Obama was advised he had no chance in court. It took a highly partial and corrupt UK court to get the job done.

Julian Assange: Justice Denied (Sagir)

Technically, Julian Assange is supposed to be released from his prison cell at HMP Belmarsh on Sunday. Yet a British court ruled last week that he has to remain in prison after the custody period of his current jail term ends due to his “history of absconding.” Assange is no longer a serving prisoner but someone facing extradition. Why is Assange actually being held prisoner? Well, the UN Special Rapporteur on Torture Nils Melzer tells me that Assange’s case is not about law, but rather politics. He says: “Trying to win any aspect of this case in the judicial arena has been a losing game for almost a decade because, from the outset, this case has been decided politically. His right to a fair trial has been systematically violated by all involved states.

“If this were about applying the law, he would have never been convicted of bail violation simply for seeking — and receiving — diplomatic asylum in the Ecuadorian embassy. “If this were about applying the law, he would not be in extradition detention under a US indictment of espionage simply for doing investigative journalism.” It seems that the only thing Assange is on trial for is the publication of the Chelsea Manning leaks. Melzer says: “The only other charge against him is for allegedly trying to help Manning to decode a password, albeit unsuccessfully and without causing any harm whatsoever. “Clearly, that is not a serious crime by any standards, and certainly not an offence any prosecutor would spend substantial resources on.”

[..] after 100 days and counting, the UK has not even responded to my official letter yet and Assange’s state of health is reportedly deteriorating as we speak,” Melzer says. Melzer says he is “appalled” at how Britain is “simply ignoring” his report. He was mandated by the UN human rights council, which includes Britain, to report to states on their compliance with the prohibition of torture and ill-treatment. Once Melzer investigates a case and makes an official finding that an act of torture has been committed, then they have to at least conduct an impartial and transparent investigation into the case, even if they come to different conclusions.

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Front page NY Post today. Brilliant.

 

 

 

 

 

Sep 182019
 
 September 18, 2019  Posted by at 9:40 am Finance Tagged with: , , , , , , , , , ,  10 Responses »


Henri Matisse Antibes 1908

 

Fed Concludes First Repo In A Decade Amid Liquidity Panic (ZH)
Big Banks Score Win As FDIC Proposes Easing Post-Crisis Derivatives Rules (R.)
Oil Steadies After Saudi Pledges To Restore Output Lost In Attacks (R.)
Without Accountability, There Can Never Be Trust in Our Government (Cates)
House Panel Asks Boeing CEO To Testify October 30 on 737 MAX (R.)
Ethiopian Crash Victims Want 737 MAX Documents From Boeing, FAA (R.)
Editorial Mistake My Ass (Mish)
Democrats Urge New Probe Of Kavanaugh, Impeachment Inquiry (R.)
Trudeau Reassures Allies Amid Alleged Spying Case (BBC)
Catastrophic Effects Of Working As A Facebook Moderator (G.)
US Government Is Suing Edward Snowden For His Book Profits (Verge)

 

 

Oh yeah, let’s save the bankers again….

Fed Concludes First Repo In A Decade Amid Liquidity Panic (ZH)

Update 4: It’s over: after a torrid 30 minutes in which the NY Fed first announced a repo operation, then announced the repo was canceled due to technical difficulties, then mysterious the difficulties went away just minutes later, at precisely 10:10am, the Fed concluded its first repo operation in a decade, which while not topping out at the $75 billion max, was nonetheless a significant $53.15 billion, split as follows: • $40.85BN with TSYs as collateral at a 2.1% stop out rate • $0.6BN with Agencies as collateral at a 3.0% stop out rate • $11.7BN with Mortgage-backed securities as collateral at a 2.1% stop out rate. While the Fed did not disclose how many banks participated in the operation, it is safe to say it was a sizable number.


Worse, the result from today’s unexpected repo operation, we can now conclude that in addition to $1.3 trillion in ‘excess reserves’, a Fed which is now cutting rates and will cut rates by 25bps tomorrow, the US financial system somehow found itself with a liquidity shortfall of $53 billion that almost paralyzed the interbank funding market. Oh, and for those wondering why the Fed did a repo, the answer is simple: it did not want to launch QE just yet. But make no mistake, once repo is insufficient, the Fed will have no choice but to escalate to the next step which is open market purchases. Which brings us to the bigger question of how long such overnight repos will satisfy the market, and how long before the next repo rate spike prompts the Fed to do the inevitable, and restart QE. At least president Trump will be delighted.

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And while we’re saving their multi-million bonuses, let’s throw them some more bones,..

Big Banks Score Win As FDIC Proposes Easing Post-Crisis Derivatives Rules (R.)

A U.S. banking regulator on Tuesday proposed easing a rule requiring banks to set aside cash to safeguard derivatives trades between affiliates, marking one of the biggest wins for Wall Street lenders under the business-friendly Trump administration. The proposal, by the Federal Deposit Insurance Corporation, could potentially free $40 billion across the nation’s largest banks, according to a 2018 survey by the International Swaps and Derivatives Association (ISDA), the global trade group that has been lobbying for the rule change for years.


The proposal is subject to public comment and will likely face resistance from Democratic lawmakers and consumer groups, who have warned that chipping away at regulations put in place following the 2007-2009 financial crisis could sew the seeds of the next one. Countries across the globe introduced a slew of rules to rein in the global over-the-counter derivatives market after big bets on credit swaps brought firms including Lehman Brothers and AIG to their knees.

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Was there any damage at all? Didn’t I read that they hit a bunch of empty tanks?

Oil Steadies After Saudi Pledges To Restore Output Lost In Attacks (R.)

Oil prices were little changed on Wednesday, steadying after Saudi Arabia said it will restore by the end of the month production lost in weekend attacks on its facilities. Prices plummeted 6% on Tuesday after Saudi Arabia’s energy minister said the country had managed to restore oil supplies to customers to where they stood before the attacks on its facilities that shut 5% of global oil output by drawing from its huge inventories. But tension in the region remained elevated after the United States said it believed the attacks on the world’s top oil exporter originated in southwestern Iran. Iran has denied involvement in the strikes.


Brent crude oil futures were flat at $64.55 a barrel by 0732 GMT. U.S. West Texas Intermediate (WTI) crude CLc1 futures were down 15 cents, or 0.1%, to $59.19 a barrel, after sinking 5.7% on Tuesday. “Considering limited spare (production) capacity outside Saudi Arabia and risks of renewed attacks on Saudi energy infrastructure, a risk premium is likely to stay on oil prices in the foreseeable future,” UBS analysts said in a note. Energy Minister Prince Abdulaziz bin Salman said on Tuesday that average oil production in September and October would be 9.89 million barrels per day and that the world’s top oil exporter would ensure full oil supply commitments to its customers this month.

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Not sure Bill Barr is your man.

Without Accountability, There Can Never Be Trust in Our Government (Cates)

The Watergate scandal, at its heart, was about political operatives working on behalf of the Nixon administration (informally known as “The Plumbers”) attempting to plant bugs in the phones of the Democratic National Committee (DNC) headquarters at the Watergate Hotel, so they could spy on key Democratic campaign communications. A little-remembered fact is that bugs had been successfully planted earlier; the burglars were returning to plant a new set in the phones because the first set never worked properly. It was during this second foray into DNC headquarters in the middle of the night that they were caught by an observant security guard.

So the Watergate scandal was based on an attempt to spy on political opponents, but no evidence ever surfaced that any successful spying was actually done. The first set of listening devices never functioned, and the operatives were caught while trying to replace them. That won’t be the case in the Spygate scandal, because this wasn’t an off-the-books dirty tricks group like The Plumbers running an operation against the Trump campaign. This was the federal government itself, making use of the official engines of its intelligence and law enforcement agencies and surveillance courts to spy on a political campaign and, then, a presidency. And it’s because this scandal is so much worse than Watergate that the persons responsible for it must be held accountable for their actions.

[..] The crimes here amount to a deliberate attempt to subvert the federal intelligence and law enforcement agencies and turn them into political engines of partisan policy to shield political friends and destroy political enemies. After covering up serious crimes committed by their political friends, these key government officials used their offices to manufacture crimes to use as a pretext to investigate and punish their political enemies. Unless this behavior is punished with the utmost severity, no one will ever be able to place trust in the federal government. The ball of accountability will soon end up in the court of U.S. Attorney General William Barr.

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I for one have little faith in Congress in this case. Not that I have much faith in Congress in general.

House Panel Asks Boeing CEO To Testify October 30 on 737 MAX (R.)

The U.S. House Transportation and Infrastructure Committee formally asked Boeing CEO Dennis Muilenburg on Tuesday to testify on the now grounded 737 MAX that has been involved in two deadly crashes since October 2018 that killed 346 people. The panel’s chair, Representative Peter DeFazio, also asked John Hamilton, the chief engineer of Boeing’s Commercial Airplanes division, to appear. Both executives have been asked to testify on Oct. 30. Last week, DeFazio asked Muilenburg to make several employees available for interviews as part of a congressional probe into the design, development and certification of 737 MAX aircraft. “Boeing has received the Committee’s invitation and is reviewing it now. We will continue to cooperate with Congress and regulatory authorities as we focus on safely returning the MAX to service,” a Boeing representative said in a statement.

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But will they get them? Boeing will just claim they would reveal company secrets.

Ethiopian Crash Victims Want 737 MAX Documents From Boeing, FAA (R.)

A lawyer for victims of Ethiopian Airlines Flight 302 said on Tuesday he wants Boeing Co and the U.S. Federal Aviation Administration to hand over documents about the decision to keep the Boeing 737 MAX in the air after a deadly Lion Air crash last October. A week after Lion Air Flight 610 nose-dived into the Java Sea, killing all 189 aboard, the FAA warned airlines that erroneous inputs from an automated flight control system’s sensors could lead the jet to automatically pitch its nose down, but the agency allowed the jets to continue flying. Five months later, the same system was blamed for playing a role when ET302 crashed on March 10, killing all 157 passengers and crew and prompting a worldwide grounding of the 737 MAX that remains in place.


“The decisions to keep those planes in service are key,” Robert Clifford of Clifford Law Offices, which represents families of the Ethiopian crash victims, said at a status hearing before U.S. Judge Jorge Alonso in Chicago. Nearly 100 lawsuits have been filed against Boeing by at least a dozen law firms representing families of the Ethiopian Airlines crash victims, who came from 35 different countries, including nine U.S. citizens and 19 Canadians. Families of about 60 victims have yet to file lawsuits but plaintiffs’ lawyers said they anticipate more to come. Most of the lawsuits do not make a specific dollar claim, though Ribbeck Law Chartered has said its clients are seeking more than $1 billion.

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The entire Kavanaugh thing is empty, just two women trying to sell a book. Trump said he should sue them. But as a Supreme Court judge, perhaps he shouldn’t.

Editorial Mistake My Ass (Mish)

As details emerge in the New York Times Kavanaugh scandal, it’s very clear the NYT repeatedly made serious errors On September 14, the New York Times resurrected unsubstantiated and graphic rumors about Supreme Court Justice Brett Kavanaugh in a purposeful smear article Brett Kavanaugh Fit In With the Privileged Kids. She Did Not. The article was by disgraced NYT authors Robin Pogrebin and Kate Kelly to promote their upcoming book “The Education of Brett Kavanaugh: An Investigation.” I do not normally report on sleaze but to understand what the NYT did, I have to. Here is one controversial paragraph: “We also uncovered a previously unreported story about Mr. Kavanaugh in his freshman year that echoes Ms. Ramirez’s allegation. A classmate, Max Stier, saw Mr. Kavanaugh with his pants down at a different drunken dorm party, where friends pushed his penis into the hand of a female student.”


The NYT later added this correction. “The book reports that the female student declined to be interviewed and friends say that she does not recall the incident. That information has been added to the article.” Making matters worse for itself, the NYT came out and blamed it all on an “editing error”. Reporters Robin Pogrebin and Kate Kelly said in an interview on MSNBC that they wrote in the draft of their Sunday Review piece that a woman who Kavanaugh was said to have exposed himself to while a student at Yale had told others she had no recollection of the alleged incident. Their editors, they say, removed the reference. “It was just sort of. . . in the haste of the editing process,” said Pogrebin.

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But this is where the non-story leads to. Kamala seeks a way to reinvent her campaign, the rest just follows.

Democrats Urge New Probe Of Kavanaugh, Impeachment Inquiry (R.)

U.S. Senator Kamala Harris on Tuesday urged a House of Representatives panel to investigate Supreme Court Justice Brett Kavanaugh, while a Democratic lawmaker filed an impeachment resolution in the wake of new allegations of sexual misconduct by the conservative judge when he was in college in the 1980s. The moves by Harris, one of 20 Democratic presidential candidates, and Representative Ayanna Pressley, a progressive on the left of the party, signaled impatience among some Democrats with congressional leaders unenthusiastic about pursuing Kavanaugh’s impeachment, though their efforts appeared unlikely to spur action.

Harris said in a letter to House Judiciary Committee Chairman Jerrold Nadler that the panel should “hold Mr. Kavanaugh accountable for his prior conduct and testimony.” Nadler on Monday faulted the FBI’s probe of prior sexual misconduct allegations against Kavanaugh ahead of his narrow confirmation by the Senate in October 2018, saying in a radio interview it “apparently was a sham.” But Nadler also said his panel had its “hands full” with investigating Republican President Donald Trump. In her letter to Nadler, Harris suggested the House Judiciary Committee could create a task force and retain outside counsel if it did not have the time or resources to pursue an inquiry of Kavanaugh now.

Harris and several other Democratic presidential candidates called for Kavanaugh’s impeachment after the New York Times published an essay over the weekend detailing what it described as a previously unreported incident of sexual misconduct by Kavanaugh. Others include former U.S. Housing and Urban Development Secretary Julian Castro; U.S. Senators Elizabeth Warren and Cory Booker; South Bend, Indiana Mayor Pete Buttigieg; and former U.S. Representative Beto O’Rourke.

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Only a Five Eyes spy chief. And whaddaya know, there’s Bill Browder again. See from yesteday: The Magnitskiy Myth Exploded.

Trudeau Reassures Allies Amid Alleged Spying Case (BBC)

Canadian Prime Minister Justin Trudeau has moved to reassure allies in the wake of an alleged spying case with possible international implications. A senior intelligence official was charged last week with violating national security laws. Cameron Ortis had access to information coming from Canada’s global allies, the RCMP national police force said. Canada is in close contact with its intelligence partners over the case, Mr Trudeau says. “We are in direct communications with our allies on security,” the prime minister said while campaigning in Newfoundland on Tuesday. “We are also working with them to reassure them, but we want to ensure that everyone understands that we are taking this situation very seriously.” Canada is a member of the Five Eyes – the intelligence alliance that also includes the US, UK, Australia and New Zealand.


Mr Ortis, who was a director general with the police force’s intelligence unit, is accused of breaching the Security of Information Act and the Criminal Code. The charges filed against him include the “unauthorised communication of special operational information”, possessing a device or software “useful for concealing the content of information or for surreptitiously communicating, obtaining or retaining information”, and breach of trust by a public officer. [..] Mr Ortis was looking into allegations that Russian tax fraudsters had laundered millions of dollars through Canada, a US financier told Reuters. Bill Browder, a high-profile critic of Russian President Vladimir Putin, said he had met Mr Ortis twice in Canada in 2017 after alerting the RCMP to the matter.

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What exactly would you say is Facebook’s role in our society? How about in your life?

Catastrophic Effects Of Working As A Facebook Moderator (G.)

They describe being ground down by the volume of the work, numbed by the graphic violence, nudity and bullying they have to view for eight hours a day, working nights and weekends, for “practically minimum pay”. A little-discussed aspect of Facebook’s moderation was particularly distressing to the contractors: vetting private conversations between adults and minors that have been flagged by algorithms as likely sexual exploitation. Such private chats, of which “90% are sexual”, were “violating and creepy”, one moderator said. “You understand something more about this sort of dystopic society we are building every day,” he added. “We have rich white men from Europe, from the US, writing to children from the Philippines … they try to get sexual photos in exchange for $10 or $20.”


Gina, a contractor, said: “I think it’s a breach of human rights. You cannot ask someone to work fast, to work well and to see graphic content. The things that we saw are just not right.” The workers, whose names have been changed, were speaking on condition of anonymity because they had signed non-disclosure agreements with Facebook. Daniel, a former moderator, said: “We are a sort of vanguard in this field … It’s a completely new job, and everything about it is basically an experiment.” John, his former colleague, said: “I’m here today because I would like to avoid other people falling into this hole. As a contemporary society, we are running into this new thing – the internet – and we have to find some rules to deal with it.

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Pay him in Bitcoin.

US Government Is Suing Edward Snowden For His Book Profits (Verge)

The Justice Department has filed a civil lawsuit against Edward Snowden that would recover all proceeds of his recently released memoir, the department announced on Tuesday. The charges coincide with the official publication of the book, which is titled Permanent Record. Snowden’s memoir was allegedly not submitted to the CIA or NSA for pre-publication review, a required practice among former employees of intelligence agencies. As such, the department considers the book a breach of Snowden’s fiduciary obligations, and names the publishers as co-defendants in the suit.


Given the still-classified programs and materials discussed in the memoir, it is unlikely that the book would have been approved for publication by the agencies. Snowden remains a de facto fugitive from the US government, and would likely face charges under the Espionage Act if he returned to the country. But the new civil case could nonetheless cause problems for Snowden, potentially enjoining his publishers from releasing any of the proceeds from the book. Crucially, the suit does not seek to block the release of Snowden’s memoir, as doing so would be illegal under the First Amendment.

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From Notes on the Next War, 1935

 

 

 

 

 

Sep 142019
 
 September 14, 2019  Posted by at 9:51 am Finance Tagged with: , , , , , , , , , , ,  9 Responses »


Kazimir Malevich Spotrsmeny 1931

 

Saudi Arabia Oil Facilities Ablaze After Drone Strikes (BBC)
Julian Assange To Stay In Prison Over Absconding Fears (BBC)
Hopes Of Clean Break With EU Are Nonsense: Ex-Brexit Official (G.)
Scores Of Councils Say Food Shortages A Risk If UK Crashes Out Of EU (Ind.)
McCabe Lawyer Presses Justice Department To Drop Criminal Case (R.)
Tectonic Rumblings (Kunstler)
Latest Russian Spy Story Looks Like Another Elaborate Media Deception (Taibbi)
Felicity Huffman Shows Rich & Famous Can Get Away With ANYTHING (RT)
Crisis-Hit Boeing Readies Huge Effort To Return 737 MAX To The Skies (R.)
A Person The Most Powerful Government In The World Wanted To Go Away (G.)
‘If I Happen to Fall out of a Window, You Can Be Sure I Was Pushed’ (Spiegel)

 

 

Wonder who’s behind this, and who will get the blame. Not the same thing.

Saudi Arabia Oil Facilities Ablaze After Drone Strikes (BBC)

Drone attacks have set alight two major oil facilities run by the state-owned company Aramco in Saudi Arabia, state media say. Footage showed a huge blaze at Abqaiq, site of Aramco’s largest oil processing plant, while a second drone attack started fires in the Khurais oilfield. The fires are now under control at both facilities, state media said. A spokesman for the Iran-aligned Houthi group in Yemen said it had deployed 10 drones in the attacks. The military spokesman told al-Masirah TV, owned by the Houthi movement and based in Beirut, that further attacks could be expected in the future. Saudi officials have not yet commented on who could be behind the attacks.


“At 04:00 (01:00 GMT), the industrial security teams of Aramco started dealing with fires at two of its facilities in Abqaiq and Khurais as a result of… drones,” the official Saudi Press Agency reported. “The two fires have been controlled.” Abqaiq is about 60km (37 miles) south-west of Dhahran in Saudi Arabia’s Eastern Province, while Khurais, some 200km further south-west, has the country’s second largest oilfield. The Abqaiq plant turns sour crude into sweet crude, producing up to 7 million barrels a day. Aramco says it is the world’s largest “crude oil stabilisation plant”. Saudi security forces foiled an attempt by al-Qaeda to attack the Abqaiq facility with suicide bombers in 2006. The Khurais oilfield came on line in 2009 and is the nation’s second-largest after Ghawar. Khurais reportedly produces 1.5 million barrels a day with estimated recoverable oil reserves of more than 20 billion barrels.

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A circus of evil clowns.

Julian Assange To Stay In Prison Over Absconding Fears (BBC)

Wikileaks co-founder Julian Assange is to remain in prison when his jail term ends because of his “history of absconding”, a judge has ruled. He was due to be released on 22 September after serving his sentence for breaching bail conditions. But Westminster Magistrates’ Court heard there were “substantial grounds” for believing he would abscond again. The Australian, 48, is fighting extradition to the US over allegations of leaking government secrets. He will face a full extradition hearing next year, starting on 25 February, after an extradition request was signed by the then home secretary Sajid Javid in June. Assange received a 50-week sentence in Belmarsh Prison, south-east London, after being found guilty of breaching the Bail Act in April.


He was arrested at the Ecuadorian Embassy, where he took refuge in 2012 to avoid extradition to Sweden over sexual assault allegations – which he has denied. District judge Vanessa Baraitser on Friday told Assange, who appeared by video-link: “You have been produced today because your sentence of imprisonment is about to come to an end. “When that happens your remand status changes from a serving prisoner to a person facing extradition.” She said that his lawyer had declined to make an application for bail on his behalf, adding “perhaps not surprisingly in light of your history of absconding in these proceedings”. “In my view I have substantial ground for believing if I release you, you will abscond again.”

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“..what it does is it takes us legally out of the EU. But what it can’t do is undo all of the very close economic ties that we have with the EU..”

Hopes Of Clean Break With EU Are Nonsense: Ex-Brexit Official (G.)

Claiming a no-deal Brexit represents a clean break with the European Union is “nonsensical”, according to Philip Rycroft, the former permanent secretary at the Department for Exiting the EU. Boris Johnson has promised to extricate the UK from the EU on 31 October “come what may” – and has hinted that he could try to get around legislation mandating him to request a Brexit delay. The Brexit party leader, Nigel Farage, whose party trounced the Tories in May’s European elections, has been urging the PM to deliver a “clean break Brexit” by leaving without a deal. But Rycroft, who was the most senior civil servant at DexEU until March this year, told the Guardian a no-deal Brexit would mark the beginning of a complex series of negotiations.

“It is not a clean break: what it does is it takes us legally out of the EU. But what it can’t do is undo all of the very close economic ties that we have with the EU, on which so much of our trade as a country depends. And nor would we want to undo all of the close security ties that we have with the EU,” he said. “And because of the importance of those ties both for the EU and the UK, it will remain hugely important to have those expressed through a formal relationship. In other words, we’re going to have to negotiate – and that negotiation on the future relationship starts with citizens, money and the border on the island of Ireland. “So the notion that no deal somehow means that we can turn our backs on the EU and break all our ties is just nonsensical.”


Rycroft spent part of his career at the Scottish Office and in the Scottish Executive before working in Nick Clegg’s office during the Tory-Lib Dem coalition government, and helping to coordinate Whitehall’s approach to devolution from the Cabinet Office. He gave a speech on Monday warning that politicians should be thinking carefully about how to protect the union with Scotland and Northern Ireland after Brexit – deal or no deal. “Clearly at the moment, political time has collapsed: everything has become very short term, everyone’s worrying about what’s happening not even next week but tomorrow,” he said. “In those circumstances it’s very different to be lifting their eyes to a more distant horizon. How do we manage as a country, if and when we come out of the EU?”

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Councils are powerless.

Scores Of Councils Say Food Shortages A Risk If UK Crashes Out Of EU (Ind.)

Scores of local councils have said a no-deal Brexit could result in food, medicine and fuel shortages in their constituencies – with many stating that crashing out without an agreement could lead to civil unrest and damage to social care. Official documents from 63 councils uncovered by the People’s Vote campaign have revealed local authorities fear that fundamental services could suffer and others could be cut if the UK crashes out of the EU. It follows the release of the government’s Operation Yellowhammer planning paper, which warned lorries could face delays of up to two and a half days at Dover, and that protest and public disorder would take up “significant” police resources.


Of the councils that released their Brexit “risk registers”, more than two-thirds said food shortages could grip their local area. Many also said this could lead to unchecked contaminated food entering the supply chain. More than half warned of medicine supplies being put at risk, while 59 per cent said fuel could also become scarce leading to a breakdown in their ability to deploy services – on top of the damage caused to the general public. And just under two-thirds said civil unrest, increased tensions between communities and public disorder could be sparked, including Dartford council which warned of an “increase in hate crime” as the area had “always been a target” for extreme right wing groups.

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What do you mean they can’t find evidence?

McCabe Lawyer Presses Justice Department To Drop Criminal Case (R.)

A lawyer for former FBI official Andrew McCabe pressed U.S. prosecutors on Friday to drop their politically sensitive case against him, citing reports that suggest they may be having trouble securing criminal charges. The U.S. Justice Department has been investigating McCabe, the FBI’s former No. 2 official, for more than 1-1/2 years over allegations he misled internal investigators about his decision to share internal communications with a reporter at the height of the 2016 presidential election. Prosecutors and senior officials within the Justice Department, including Deputy Attorney General Jeffrey Rosen, have recommended moving forward with criminal charges, according to sources familiar with the investigation.


But they might have encountered another hurdle. The Washington Post reported on Thursday that a federal grand jury investigating the case had been called back to consider evidence, but had left without returning an indictment. Grand juries are used in the U.S. legal system to assess the validity of possible criminal charges in major cases. To obtain an indictment, U.S. prosecutors typically need to convince the grand jury there is probable cause that a crime has been committed, which is a lower legal standard than that needed to secure a guilty verdict at trial. Proceedings are conducted in secret.

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How does Flynn pay his legal bills?

Tectonic Rumblings (Kunstler)

After Mr. Trump won the 2016 election, he moved to appoint General Flynn as his National Security Advisor. Within a few days, FBI director James Comey pulled off an entrapment gambit to incriminate General Flynn over a conversation he had with Russian Ambassador Sergey Kislyak — as if incoming high officials for foreign policy are not supposed to associate with foreign ambassadors. You understand now that the government had continued its surveillance of General Flynn for years, including tapping his phone when he moved into his White House office. That enabled Mr. Comey to set up a perjury trap. The General was successfully sandbagged this time, kicked offstage, and conned into a guilty plea. He’s been awaiting sentencing for more than a year.

A few months ago, General Flynn fired his old lawyers and hired Sidney Powell, an attorney who literally wrote the book on discovering prosecutorial misconduct in the case of Alaska Senator Ted Stevens, whose prosecution over Mickey Mouse comped hotel bills was thrown out of court by the same Judge, Emmet Sullivan, who presides in the US versus Flynn. Ms. Powell has now declared that she intends to prove “egregious prosecutorial conduct” and suppression of exculpatory evidence against the DOJ lawyers who ran the case against General Flynn. The government never would have had a case if they revealed the FBI’s internal memos on General Flynn.


Attorney Powell is seeking to have the case thrown out of court. The FBI and the DOJ lawyers who conducted the prosecution have stonewalled the court on producing the documents at issue. Judge Sullivan may sense that he’s seen this movie before. The case took on a life of its own long before William Barr was confirmed as attorney general and one wonders if he has any role in ending this damaging farce. Legal protocol may require Judge Sullivan to complete the case one way or another. I wrote in this space a year ago that General Flynn had been subject to prosecutorial misconduct. Now, I’ll venture to assert that if Judge Sullivan does not throw the case out, Mr. Trump will step in and pardon General Flynn, and in doing so will make it clear exactly how and why he was run into court in the first place.

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Matt Taibbi on the story I covered early this week in Pulp Fiction Media

Latest Russian Spy Story Looks Like Another Elaborate Media Deception (Taibbi)

It’s a characteristic of third world countries to have the intelligence world and the media be intertwined enough that it’s not always clear whether the reporters and the reported-about are the same people. When you turn on the TV in Banana Republics, you’re never sure which group is talking to you. We’re now in that same paradigm in America. CNN has hired nearly a dozen former intelligence or counterintelligence officials as analysts in the last few years. Their big get was former Director of National Intelligence James Clapper, but they also now have former deputy FBI chief Andrew McCabe, former FBI counsel James Baker, and multiple former CIA, NSA, and NSC officials.


Meanwhile, former CIA director John Brennan has an MSNBC/NBC gig, as does former CIA and DOD chief of staff Jeremy Bash, and several other ex-spooks. The Washington Post is owned by Jeff Bezos, who doubles as the CEO of one of America’s largest intelligence contractors. This odious situation is similar to 2003-2004, when cable networks were tossing contributor deals to every ex-general and ex-spook they could find while they were reporting on the Iraq invasion. At one point, FAIR.org found that 52 percent of the sources in network newscasts were current or former government officials. The numbers now aren’t quite that skewed, but CNN and MSNBC both employ former senior intelligence officials who comment upon stories in which they had direct involvement, especially the Russia investigation.

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Don’t want to turn into a gossip site, but the difference between 2 weeks and 5 years is a tad much.

Felicity Huffman Shows Rich & Famous Can Get Away With ANYTHING (RT)

That actress Felicity Huffman will go to jail for only 14 days over college entrance fraud shows there are really two justice systems in the US: one for the rich, famous and politically correct – and another for everyone else.
The ‘Desperate Housewives’ star pleaded guilty to paying $15,000 to falsify her daughter Sophia’s SAT – a college admissions test – and was sentenced to two weeks in jail, 250 hours of community service, a $30,000 fine and a year of supervised release. Altogether, a slap on the wrist to a Hollywood celebrity. It did not take long for her case to be contrasted with the fate of Tanya McDowell, a Connecticut woman who falsified a residency document in 2011 to enroll her son in a better school. McDowell ended up getting jailed for five years for first-degree larceny, and would have faced an even longer sentence had she not made a deal with prosecutors.


Comparing the two cases is absolutely apples to apples. That McDowell was later charged with selling drugs to undercover police officers and given a concurrent sentence does not change the severity of her initial punishment – 130 times longer than was meted out to Huffman. Could it be that it’s because Huffman is white and McDowell is black, and the US justice system is irreparably racist, as a lot of people have argued? Another possibility could be Huffman’s fame, fortune – and politics. After her arrest in April, Huffman was revealed to have donated over $10,000 to Democrats, including over $1,500 to the Senate campaign of Kamala Harris – the tough-on-crime prosecutor in San Francisco and California, now running for president.

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What do you guys think, will all regulators comply? How about the public? Do you want to board a 737 MAX?

Crisis-Hit Boeing Readies Huge Effort To Return 737 MAX To The Skies (R.)

As Boeing sets its sights on winning approval to fly its 737 MAX within weeks, following a six-month safety ban, engineers around the world are rolling out plans for one of the biggest logistical operations in civil aviation history. Inside Boeing’s 737 factory at Renton, Washington, south of Seattle, workers have pre-assembled dedicated tool kits for technicians tasked with installing software updates and readying over 500 jets that have sat idle for months, insiders said. Across the globe, Boeing teams are hammering out delivery schedules – and financial terms – with airline customers who have been forced to cancel flights, cut routes and fly aging jetliners while they await the MAX’s return.

Although regulators must still approve the jets for flight, Boeing and airline staff and executives say the world’s largest planemaker is weeks into an elaborate blueprint for production, maintenance and delivery that one source said involves 1,500 engineers – as many as it takes to design a small new jet. Another likened the logistics to a nation “going to war.” Boeing Commercial Airplanes Chief Engineer John Hamilton called the previously unreported mobilization more like an elaborate “ballet,” which includes synchronizing 680 suppliers of everything from carbon brakes to pilot seatbelts.


[..] Once regulators certify the MAX for flight, Boeing will have to mobilize hundreds of mechanics and pilots to bring the roughly 250 stored aircraft out of hibernation. Airlines estimate the process – which includes installing new software, changing fluids and cycling the engines – will take 100 to 150 hours per jet, and months in total for Boeing. In one example highlighting the minute risks that could upend months of planning, a team of employees is analyzing years of data on December snowfall at an airport in rural Moses Lake, Washington – where Boeing has parked some 100 jets – to predict demand for aircraft anti-freeze and runway performance.

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I know Snowden needs to sell his book, but the Guardian? Really? The paper runs a smear campaign against Assange, without whom Snowden would be in a very different set-up.

A Person The Most Powerful Government In The World Wanted To Go Away (G.)

The world’s most famous whistleblower, Edward Snowden, says he has detected a softening in public hostility towards him in the US over his disclosure of top-secret documents that revealed the extent of the global surveillance programmes run by American and British spy agencies. In an exclusive two-hour interview in Moscow to mark the publication of his memoirs, Permanent Record, Snowden said dire warnings that his disclosures would cause harm had not come to pass, and even former critics now conceded “we live in a better, freer and safer world” because of his revelations.

In the book, Snowden describes in detail for the first time his background, and what led him to leak details of the secret programmes being run by the US National Security Agency (NSA) and the UK’s secret communication headquarters, GCHQ. He describes the 18 years since the September 11 attacks as “a litany of American destruction by way of American self-destruction, with the promulgation of secret policies, secret laws, secret courts and secret wars”. Snowden also said: “The greatest danger still lies ahead, with the refinement of artificial intelligence capabilities, such as facial and pattern recognition. “An AI-equipped surveillance camera would be not a mere recording device, but could be made into something closer to an automated police officer.”


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Moscow is not such a bad place. It beats Belmarsh.

‘If I Happen to Fall out of a Window, You Can Be Sure I Was Pushed’ (Spiegel)

Book a suite in a luxury hotel in Moscow, send the room number encrypted to a pre-determined mobile number and then wait for a return message indicating a precise time: Meeting Edward Snwoden is pretty much exactly how children imagine the grand game of espionage is played. But then, on Monday, there he was, standing in our room on the first floor of the Hotel Metropol, as pale and boyish-looking as the was when the world first saw him in June 2013. For the last six years, he has been living in Russian exile. The U.S. has considered him to be an enemy of the state, right up there with Julian Assange, ever since he revealed, with the help of journalists, the full scope of the surveillance system operated by the National Security Agency (NSA).


For quite some time, though, he remained silent about how he smuggled the secrets out of the country and what his personal motivations were. Now, though, he has written a book about it. It will be published worldwide on September 17 under the title “Permanent Record.” Ahead of publication, Snowden spent over two-and-a-half hours patiently responding to questions from DER SPIEGEL.

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Vintage Australia map from 1773

 

 

 

 

 

Sep 072019
 
 September 7, 2019  Posted by at 9:47 am Finance Tagged with: , , , , , , , , , , , ,  13 Responses »


Pablo Picasso Portrait of Dora Maar 1942

 

The Financialization of the US Economy (WS)
Fed Chair Powell Repeats Vow To Act ‘As Appropriate’ (R.)
Tariffs Are No Longer China’s Biggest Problem In The Trade War (CNBC)
Boris Johnson Urged To Become A ‘Brexit Martyr’ (DM)
A Trump Brexit Threatens (Wight)
A Crackup Is Inevitable (Kunstler)
CIA, Mossad, “the Epstein Network” and an Orwellian Nightmare (Whitney Webb)
How MIT Concealed Its Relationship with Jeffrey Epstein (Farrow)
Boeing’s Chief Technical Pilot On The 737 MAX Project Pleads The Fifth (ST)
For The First Time In My Life, I’m Frightened To Be Jewish (David Graeber)
Edward Snowden’s Guardian Angels (F24)

 

 

But services don’t make stuff.

The Financialization of the US Economy (WS)

Service-producing industries dominate the US economy, accounting for over 70% of GDP. And this sector is hopping. Revenues in the major services categories rose 5.3% in the second quarter of 2019, compared to the same quarter a year earlier, to $4.05 trillion, not seasonally adjusted, according to the Commerce Department’s Quarterly Selected Services Estimates released today. For the first two quarters of 2019, service revenues rose 5.5% to $8.0 trillion. The pace of growth so far this year is slightly lower than the hot 6.0% growth for the year 2018.


Four biggies dominate the service sector, and the US economy overall. They accounted for $2.92 trillion in revenues in Q1, or about 72% of total service revenues, with the biggest of them all, finance and insurance, accounting for 32%, up from 31% at the end of last year. It is also the fastest-growing segment, even faster than healthcare, as the US economy is getting more and more financialized. The share of each of the big four of overall service revenues: • Finance and insurance: 32% • Healthcare: 17% • Professional, scientific, and technical services: 12% • “Information” services, such as telecommunications, software, and data processing: 11%.

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Only one act is appropriate: go home. Did you know Jay Powell is worth some $100 million? Do you think he’s concerned about Americans living paycheck to paycheck?

Fed Chair Powell Repeats Vow To Act ‘As Appropriate’ (R.)

The U.S. Federal Reserve will continue to act “as appropriate” to sustain the economic expansion in the world’s biggest economy, Fed Chair Jerome Powell said Friday in Zurich, sticking to a phrase that financial markets have read as signaling further interest-rate reductions ahead. “Our obligation is to use our tools to support the economy, and that’s what we’ll continue to do,” Powell said at the University of Zurich. Still, he said, “We are clearly at a time where there is a range of views” among Fed policymakers meeting Sept. 17-18 to decide on rates.


Powell’s careful wording reflects a split within the U.S. central bank about how best to respond to an economy where the job market and consumer spending are strong but rising trade tensions between Beijing and Washington, Britain’s possibly messy exit from the European Union, and a broad global slowdown pose risks. Boston Fed President Eric Rosengren for instance has made the case for leaving rates where they are until those risks are more tangible in the economic data. Others including St. Louis Fed President James Bullard have called for a half-a-percentage point interest-rate cut to get ahead of the trade war risks and bring the Fed’s policy rate more in line with market expectations. Meanwhile, financial markets are betting Fed policymakers will agree to split the difference and follow their quarter-point rate cut in July with another one later this month.

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Decoupling.

Tariffs Are No Longer China’s Biggest Problem In The Trade War (CNBC)

It’s not the new round of tariffs that went into effect; we’ve been playing the tit-for-tat tariff war for more than a year. It’s not the economic reports; they’ve been a little too mixed lately to force any dramatic moves. It’s not even the decision by Hong Kong administrator Carrie Lam to fully withdraw the controversial mainland extradition bill; it’s still not clear that the Hong Kong unrest would be affected in any way by a trade deal. Given the timing of the change in tone, it seems more likely that what’s making the difference is a realization on both sides that there’s another way this trade war could end – and that possible ending is one the U.S. is very unlikely to lose.


That alternate ending is summed up in one word: decoupling. The decoupling push is quite different than any U.S. efforts to get China to open up more of its economy to American companies. Instead, it focuses on reducing America’s extremely heavy reliance on China for so much of its manufacturing needs. Even if China’s economy weren’t so closed off to so many American goods and services, a strong argument has long been made that the U.S. needs to diversify its sources for imports. While finding those new sources wouldn’t necessarily do anything to dent America’s trade imbalances, it would reduce the risks of a major disruption to the U.S. economy based on disputes or other problems connected to a single foreign country.

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As I wrote yesterday, he has little to lose by resigning.

Boris Johnson Urged To Become A ‘Brexit Martyr’ (DM)

Boris Johnson wrote to all Tory members last night to indicate that he would rather defy the law than beg Brussels for a delay in bringing Britain out of the EU. The Prime Minister said he was only bound ‘in theory’ by a law which is expected to receive Royal Assent on Monday, taking a No Deal Brexit off the table. In his letter, he reiterated his determination to stand firm against Remainers, saying: ‘They just passed a law that would force me to beg Brussels for an extension to the Brexit deadline. This is something I will never do.’ Earlier on Friday he told reporters he would not entertain seeking another deadline extension from Brussels, as the incoming law compels him to do if no agreement is in place by October 19.

He was urged last night by Tory grandee Iain Duncan Smith to hold his nerve, saying he would be ‘martyred’ if he chose to break the law and risk a possible prison sentence for contempt of Parliament. Mr Duncan Smith told The Telegraph: ‘This is about Parliament versus the people. Boris Johnson is on the side of the people, who voted to leave the EU. ‘The people are sovereign because they elect Parliament. But Parliament wants to stop the will of the people.’ If Mr Johnson fails to carry out the will of Parliament, he risks being taken to court and, if a judge ordered him to obey Parliament, he could be held in contempt and even jailed for refusing.


Mr Johnson’s latest plans for a snap election appeared to have been scuppered yet again last night by a ’stitch-up’ between Jeremy Corbyn and Remain parties. Labour, the Lib Dems and Scots and Welsh nationalists agreed to block the public going to the polls before October 31. It leaves the Prime Minister in limbo, forced to choose between resigning or defying a law passed by MPs ruling out a No Deal Brexit.

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“This desire for godlike powers of total creation is precisely why free market ideologues are so drawn to crises and disasters.”

A Trump Brexit Threatens (Wight)

Trump’s otherworldly vice president, Mike Pence, has just said more in one short sentence to unravel the complexities of the Brexit crisis that continues to bedevil the UK, than the ocean of column inches that have been devoted to the subject since the referendum was held in 2016. Speaking at a black tie event in London on Thursday night, attended by an array of business executives, Pence proclaimed, “The minute the UK is out, America is in.” Pence, a man who stands as living proof that human evolution is not wedded to an ever upwards path, delivered these words with the bombast of a Roman proconsul addressing the notables of a soon-to-be client state.

Thus let there be no doubt that the hard no-deal Brexit advocated by the UK’s newly installed Prime Minister Boris Johnson and his supporters is to all intents a Trump Brexit – one that will see the UK economy opened up to the tender mercies of U.S. corporations on terms set not by London but Washington. In other words, we’re talking disaster capitalism on steroids, bringing with it the likely prospect of the decimation of what’s left of the UK’s welfare state, including that most revered totem to social solidarity, the National Health Service (NHS), which since the end of WWII, when it was established, has provided generations of British citizens with free healthcare at the point of need, funded out of general taxation, regardless of social class or personal wealth.


The NHS is therefore a socialist institution in all but name, which Johnson and his privileged right wing establishment acolytes in the hard Brexit camp would sooner see broken up and sold off to U.S. insurance companies in sacrifice to their god, the market. This is regardless of any and all assurances given to the contrary. In her classic work, Shock Doctrine, Naomi Klein writes: “Believers in the shock doctrine [of disaster capitalism] are convinced that only a great rupture – a flood, a war, a terrorist attack – can generate the kind of vast, clean canvases they crave,” while earlier in the same passage, warning that “This desire for godlike powers of total creation is precisely why free market ideologues are so drawn to crises and disasters.”

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National sovereignty.

A Crackup Is Inevitable (Kunstler)

What’s at stake behind all the pushing-and-shoving is the question of national sovereignty. Does it matter anymore? I suspect it will matter increasingly for everyone in many nations, and at a smaller and smaller scale of political divisions so that, for instance, Great Britain itself will be faced with surrendering its dominion over Scotland and Northern Ireland. This is churning in the zeitgeist now, actually has been for some time since the Soviet Union and Yugoslavia cracked up. Even the United States finds itself increasingly disunited and it’s not inconceivable that before the century ends some regions may go their own way. Texans have been talking it up for years, and California is already acting like she’s started divorce proceedings.

China, meanwhile, is whipping its quasi-vassal Hong Kong like a dog because Xi Jinping is not in a position to bust Donald Trump upside the head and Xi’s got to take it out on somebody. Everything was looking so rosy for China as it burst out of its medieval cocoon into industrial adulthood, and now Mr. Trump is ruining the global arrangements that turned the sclerotic old outfit into a global super-dragon. They’ve had a blast driving down the capitalist road — even if they’re actually ruled by communists — but a storm of bad debt is coming up on them from behind, and if it catches up, the joyride is over and some kind of dreadful crackup happens.


All the abiding normality of the past seventy years is slipping away into flux. Modernity is finally yielding – to what? Nobody knows. And nowhere is this more obvious than in the realm of money and economy. Beyond all the other quarrels of modern times — democracy versus communism, Islam versus the West, the wealthy north versus the poor south — one thing remained pretty steady: the flow of oil into the engines of economy. Turned out, the world didn’t have to run out of oil for that normality to fray badly; the oil just had to become marginally unaffordable, and voila! It’s hard for people to grok, especially here in the USA with oil production so far above the old 1970 prior peak that the proposition seems absurd.

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Whitney’s latest. Obvious must read.

CIA, Mossad, “the Epstein Network” and an Orwellian Nightmare (Whitney Webb)

Prior to the public scrutiny of Barak’s relationship to Jeffrey Epstein, following the latter’s arrest this past July and subsequent death, Barak had come under fire for his ties to disgraced film mogul Harvey Weinstein. Indeed, it was Ehud Barak who put Weinstein in contact with the Israeli private intelligence outfit Black Cube, which employs former Mossad agents and Israeli military intelligence operatives, as Weinstein sought to intimidate the women who had accused him of sexual assault and sexual harassment. Former Mossad director Meir Dagan led Black Cube’s board until his death in 2016 and Carbyne co-founder Lital Leshem is Black Cube’s former director of marketing.

After Barak put him in contact with Black Cube’s leadership, Weinstein, according to The New Yorker, used the private spy firm to “‘target,’ or collect information on, dozens of individuals, and compile psychological profiles that sometimes focused on their personal or sexual histories.” In addition, The New Yorker noted that “Weinstein monitored the progress of the investigations personally” and “also enlisted former employees from his film enterprises to join in the effort, collecting names and placing calls that, according to some sources who received them, felt intimidating.”


Yet, more recently, it has been Barak’s close relationship to Epstein that has raised eyebrows and opened him up to political attacks from his rivals. Epstein and Barak were first introduced by former Israeli Prime Minister Shimon Peres in 2002, a time when Epstein’s pedophile blackmail and sex trafficking operation was in full swing.

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Pecunia non olet.

How MIT Concealed Its Relationship with Jeffrey Epstein (Farrow)

The M.I.T. Media Lab, which has been embroiled in a scandal over accepting donations from the financier and convicted sex offender Jeffrey Epstein, had a deeper fund-raising relationship with Epstein than it has previously acknowledged, and it attempted to conceal the extent of its contacts with him. Dozens of pages of e-mails and other documents obtained by The New Yorker reveal that, although Epstein was listed as “disqualified” in M.I.T.’s official donor database, the Media Lab continued to accept gifts from him, consulted him about the use of the funds, and, by marking his contributions as anonymous, avoided disclosing their full extent, both publicly and within the university.


Perhaps most notably, Epstein appeared to serve as an intermediary between the lab and other wealthy donors, soliciting millions of dollars in donations from individuals and organizations, including the technologist and philanthropist Bill Gates and the investor Leon Black. According to the records obtained by The New Yorker and accounts from current and former faculty and staff of the media lab, Epstein was credited with securing at least $7.5 million in donations for the lab, including two million dollars from Gates and $5.5 million from Black, gifts the e-mails describe as “directed” by Epstein or made at his behest. The effort to conceal the lab’s contact with Epstein was so widely known that some staff in the office of the lab’s director, Joi Ito, referred to Epstein as Voldemort or “he who must not be named.”

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By refusing to send documents.

Boeing’s Chief Technical Pilot On The 737 MAX Project Pleads The Fifth (ST)

A former Boeing official who played a key role in the development of the 737 MAX has refused to provide documents sought by federal prosecutors investigating two fatal crashes of the jetliner, citing his Fifth Amendment right against self-incrimination, according to a person familiar with the matter. Mark Forkner, Boeing’s chief technical pilot on the MAX project, invoked the privilege in response to a grand jury subpoena issued by U.S. Justice Department prosecutors looking into the design and certification of the plane, the person said.

Invoking the Fifth to avoid testifying, while a legal right, is sometimes interpreted as an admission of guilt. Its use to resist a subpoena for documents is less common and may only imply a dance between prosecutors and defense attorneys, legal experts say. Forkner, now a first officer for Southwest Airlines, referred questions to his attorney when reached by phone. His attorney, David Gerger, of Houston, did not respond to inquiries.


Forkner, who worked at Boeing from 2011 to 2018, according to his LinkedIn profile, was frequently anxious about the deadlines and pressures faced in the MAX program, going to some of his peers in the piloting world for help, a person who worked on the project previously told The Seattle Times, speaking on condition of anonymity. The MCAS system, designed to move a powerful control surface at the tail to push the airplane’s nose down in certain rare situations, played a critical role in the crashes when the planes nose-dived out of the sky. During the certification process, Forkner suggested to the Federal Aviation Administration (FAA) that MCAS not be included in the pilot manual, according to previous Seattle Times reporting.

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The anti-Corbyn campaign fallout.

For The First Time In My Life, I’m Frightened To Be Jewish (David Graeber)

I am 58 years old, and for the first time in my life, I am frightened to be Jewish. We live in a time when racism is being normalized, when Nazis parade in the streets in Europe and America; Jew baiters like Hungary’s Orban are treated as respectable players on the international scene, “white nationalist” propagandist Steve Bannon can openly coordinate scare-mongering tactics with Boris Johnson in London at the same time as in Pittsburg, murderers deluded by white nationalist propaganda are literally mowing Jews down with automatic weapons. How is it, then, that our political class has come to a consensus that the greatest threat to Britain’s Jewish community is a lifelong anti-racist accused of not being assiduous enough in disciplining party members who make offensive comments on the internet?


For almost all my Jewish friends, this is what is currently creating the greatest and most immediate sense of trepidation, even more than the actual Nazis: the apparently endless campaign by politicians like Margaret Hodge, Wes Streeting, and Tom Watson to weaponize antisemitism accusations against the current leadership of the Labour party. It is a campaign – which however it started, has been sustained primarily by people who are not themselves Jewish – so cynical and irresponsible that I genuinely believe it to be a form of antisemitism in itself. And it is a clear and present danger to Jewish people. To any of these politicians who may be reading this, I am begging you: if you really do care about Jews, please, stop this.

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Justin better act.

Edward Snowden’s Guardian Angels (F24)

After he revealed the National Security Agency’s illegal mass surveillance programmes in 2013, Edward Snowden received help from some unlikely accomplices. Four refugees and their lawyer allowed the whistleblower to escape and stay under the radar, at a time when he was the world’s most wanted man. For 13 days, they sheltered him in their tiny apartments located in the poorest area of Hong Kong, home to the marginalised community of asylum seekers. The mastermind behind the idea of hiding the American fugitive in plain sight was Robert Tibbo, a Canadian human rights lawyer, well known for defending asylum seekers in the region.

Snowden told FRANCE 24 he believes he owes his life to these unexpected allies, who could have turned him in at any time: “They could have written an email to the CIA and they could have gotten a big cheque or they could have finally gotten asylum in exchange. But they would have had to do it by selling someone into a grave. And for that, I’ll never be able to repay them.”


But since their identity was revealed, especially with the release of the Oliver Stone film “Snowden” in 2016, these refugees are being persecuted by Hong Kong authorities. Arrested on several occasions, they have been questioned about their ties with Snowden. The little welfare they received from the government has been cut. Today, they all live in constant fear in Hong Kong. If deported to their home country of Sri Lanka, they could face imprisonment, torture and even death. All of them have applied for asylum in Canada.

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May 172019
 


Caravaggio The seven works of mercy (Sette opere di Misericordia) 1607

 

“Well, I don’t know what will happen now. We’ve got some difficult days ahead. But it really doesn’t matter with me now, because I’ve been to the mountaintop… And I’ve seen the Promised Land. I may not get there with you. But I want you to know tonight, that we, as a people, will get to the Promised Land.”

– Reverend Dr. Martin Luther King Jr, one day before he was murdered

 

What Martin Luther King King won through many hard-fought battles, and in the end through sacrificing his own life, has to be won all over again: freedom, truth, justice. And this time it’s Julian Assange who stands in the frontline. With Chelsea Manning and Edward Snowden by his side. But I know you’re not very likely to agree with that assessment.

For one thing, I picked the kind of headline that will probably make many people not read an essay. But I’m not kidding, and I’m not saying this for effect. Julian Assange is like Martin Luther King in many ways, and he deserves for people to recognize that.

Assange and Dr. King were born in different times, the former 3 years after the latter was murdered. But when anyone wants to talk King’s legacy, then Assange very much IS that legacy. It would be nice if people like Dr. King’s youngest daughter Bernice, who is very vocal on her father’s legacy, would acknowledge this. Her father certainly would have.

What Julian Assange and Martin Luther King have in common is a superior intelligence, combined with unwavering courage and an unrelenting drive for justice and truth. Both men were born so brave they realized that they might have to give their lives for their causes. And then brought that realization into practice. Both in their own way gave their lives for our sins.

Shared intelligence and courage, justice and truth. Unfortunately, another thing the two share is gross and vile sex smears. Which hurt both men much more than anything else thrown at them. Not a coincidence. Sex smears invariably and for good reason work strongest in women. And in Reverend King’s case, his religious following, who were 99% black people. Lose the women and you lose half of your potential support.

In Assange’s case, the smears, which have even been upgraded to ‘rape’, keeps people from standing up for him. Once you have that word attached to you, you will never fully get rid of it no matter what happens. J. Edgar Hoover’s FBI knew this in the 1960’s, and Robert Mueller and James Comey’s FBI certainly never forgot it half a century later.

 

And of course there are many many people saying that Assange is no Martin Luther King, that Dr. King was a much better man than Assange could ever be. I would urge them to study how Dr. King was perceived in the last 10 years of his life. The nation didn’t exactly revere him, far from it. Most didn’t like him at all, he was seen as a troublemaker, including by many black people, who thought he would make their lives even harder. And then there were Hoover’s sex smears.

After his murder, it took just a few years for the first campaign to establish a public holiday in his name to start. 15 years after the murder, in 1983, President Reagan signed it into law. Even if and when such a petition were started in the case of Assange’s death, which we should all hope will be many years away, the odds of it getting anywhere are slim. But the same would have been true in 1965. So there is hope.

Those willing to give their own lives in order to make other people’s lives better, richer, more just, are special people. Not flawless, for that would make them not people, but special. Yes, Jesus is an obvious example. And so is Mahatma Gandhi. And sure, I hear you say Assange is no Jesus and no Gandhi, but the pattern of peaceful resistance cannot be denied.

There are obviously plenty people who fight for what’s right. What makes Assange, Dr. King, Gandhi, Jesus stand out is that they are examples of people standing up to entire empires. They guy standing in front of the tanks in Tienanmen square in 1989 was another one. Dr. King, Gandhi, Jesus were murdered for what they did. The Chinese guy in all probability also was. That leaves us with Assange.

Does he need to die first before we can appreciate and recognize what he has achieved in our names, that he changed the world we live in for good, as in literally for good? Does it really have to end the same way? Julian Assange hasn’t even received his Nobel Peace Prize yet.

 

 

Here’s an article by Roy Peter Clark for the Poynter, November 25, 2014, about the FBI and sex smears.

How the Southern press foiled FBI’s attempt to smear MLK

Is it possible that we have to thank the white Southern press of the 1960s – even the segregationist press – for its restraint in resisting FBI attempts to smear the Rev. Martin Luther King, Jr., with sexual scandal? That question is raised, but not sufficiently developed, in a Nov. 11 New York Times piece written by Yale historian Beverly Gage. She discovered in the files of FBI chief J. Edgar Hoover an uncensored draft of what has been called the “suicide letter.” The letter was part of an elaborate effort to discredit King, who was about to receive the Nobel Peace Prize.


Based on wire taps and audio tapes, the one-page letter, supposedly sent by an outraged black citizen, described in the vivid language of the day examples of King’s marital infidelities and sexual adventures. The writer, actually an FBI agent, threatened to go public in 34 days with details of King’s affairs. “There is only one thing left for you to do,” it read near the end. “You know what it is.”

From the article, a conversation between Gene Patterson, editor of the Atlanta Constitution from 1960-1968, later editor of the St. Petersburg Times, and Howell Raines, political editor of the St. Petersburg Times, who in 1977 published an oral history of the civil rights movement entitled My Soul Is Rested. In that book Patterson describes to Raines how he was approached by the FBI to smear Dr. King:

“An FBI agent was sent to see me with the bugging information that Dr. King had been engaged in extramarital sexual affairs. The FBI agent, obviously under orders of the director, Hoover, because nobody acted without his direction, urged me – he said, ‘Gene,…here you on this paper have raised Dr. King up to be some kind of model American, some kind of saint, some kind of moralist.’ He said, ‘Now, here’s the information, and why don’t you print it?’ The FBI, the secret police of this country!


And I had to explain to him, ‘Look, we’re not a peephole journal. We don’t print this kind of stuff on any man. And we’re not going to do it on Dr. King.’ And I said, ‘Furthermore, I’m shocked that you would be spying on an American citizen, whether it’s Dr. King or some other person because if it can happen to him, it can happen to all of us.’ And I asked him if he thought this wasn’t a misuse of the FBI. But he was highly offended at me, seeing us as an immoral newspaper for not printing back-alley gossip that the secret police of the United States were trying to ruin this man with.”

Patterson told Raines that one of the editors contacted by the FBI was Lou Harris of the Augusta (Ga.) Chronicle, a paper that supported segregation on its editorial pages. Patterson recalls:


“So I had a phone call from Lou Harris one day, and he said, ‘Gene, I had a call from an FBI agent over here, and you’d be amazed at what he told me about Dr. King.’ And I said, ‘Lou, you mean sex exploits.’ …He said, ‘Have you heard about this?’ I said, ‘Yeah, the FBI has been to see me, too.’ And I said, ‘What are you gonna do with it?’ he said, ‘Hell, I wouldn’t print that stuff. That’s beyond the pale.’ And this was a segregationist editor talking to me. And I said, ‘Lou, I’m proud of you. I’m not gonna mess with it either.’”

And then perhaps the most revealing bit.

One night, Patterson found himself on a plane to Atlanta with John Doar, one of Bobby Kennedy’s top aides in the Justice Department. Hoover was a powerful man, but supposedly subject to the direction of the Attorney General. “I want you to tell the attorney general about this,” said Patterson. “He should know what the FBI is up to.”


“Because the more I thought about it,” Patterson said, “the more worried I’d become about the misuse of secret police powers.” Patterson remembered that throughout his narrative, Doar never looked at him, staring straight ahead in stony silence. “And all of a sudden,” said Patterson, “it hit me like a thunderclap that Bobby Kennedy knew about it. I had made Doar very uncomfortable by relating it to him. Not one expression crossed that deadpan face of his. He just did not respond. It was like talking to a dead man.”

A half century after these incidents, the American intelligence and security apparatus have snooping powers well beyond anything that could be imagined by Dr. King, Patterson, and their contemporaries. Imagine the corruption of a J. Edgar Hoover armed with the weapons of the digital age. His original bugging of King, whom he hated and criticized publicly, was not in search of sexual indiscretions. Hoover’s goals were measured by the paranoid politics of his time: that King had consorted with Communists.

 

 

No matter where it leads, no matter what abuses it will bring, I’m going to tell the truth

-Dr. King

 

 

 

 

 

 

Jul 032018
 


Edward Hopper Summer interior 1909

 

Buybacks Are The Only Thing Keeping The Stock Market Afloat (CNBC)
Stock Markets Look Ever More Like Ponzi Schemes (Murphy)
A Japanese Tsunami Out Of US CLOs Is Coming (HC)
The Eurozone’s Coming Debt Crisis (Lacalle)
The ‘Dirty Dozen’ Sectors Of Global Debt (Rochford)
UK’s Latest Brexit Proposal Is Unrealistic, Say EU Officials (G.)
Nassim Taleb Slams “These Virtue-Signaling Open-Borders Imbeciles” (ZH)
Merkel Dodges Political Bullet With Controversial Migrant Deal (AFP)
Austria Says To ‘Protect’ Its Borders After German Migrant Deal (AFP)
Is Facebook A Publisher? In Public It Says No, But In Court It Says Yes (G.)
Tesla’s All-Nighter To Hit Production Goal Fails To Convince Wall Street (R.)
The New York Times Squares off with the Truth, Again (AHT)
Anthony Kennedy and Our Delayed Constitutional Crisis (GP)
‘Snowden is the Master of His Own Destiny’ – Russia (TeleSur)

 

 

And then QE ends.

Buybacks Are The Only Thing Keeping The Stock Market Afloat (CNBC)

Stocks right now are hanging by a thread, boosted by a bonanza of corporate buying unrivaled in market history and held back by a burst in investor selling that also has set a new record. Both sides are motivated by fear, as corporations find little else to do with their $2.1 trillion in cash than buy back their own shares or make deals, while individual investors head to the sidelines amid fears that a global trade war could thwart the substantial momentum the U.S. economy has seen this year. “Corporate cash is going to find a home, and it’s either going to be in buybacks, dividends or M&A activity. What it’s not going to be is in capex,” said Art Hogan, chief market strategist at B. Riley FBR.

“Individuals are looking at the turbulence we’ve seen this year that we had not seen last year. That creates its own sort of exit sign for investors who don’t want to deal with that.” The numbers showing where each side put their cash in the second quarter are striking. Companies announced $433.6 billion in share repurchases during the period, nearly doubling the previous record of $242.1 billion in the first quarter, according to market research firm TrimTabs. Dow components Nike and Walgreens Boots Alliance led the most recent surge in buybacks, with $15 billion and $10 billion, respectively, last week. In all, 31 companies announced buybacks in excess of $1 billion during June.

At the same time, investors dumped $23.7 billion in stock market-focused funds in June, also a new record. For the full quarter, the brutal June brought global net equity outflows to $20.2 billion, the worst performance since the third quarter of 2016, just before the presidential election. The selling is particularly acute in mutual funds, which saw $52.9 billion in outflows during the quarter and are typically more the purview of the retail side.

Read more …

“People think their savings and pensions are safe because of rising share prices. They do not realise it is all a con-trick.”

Stock Markets Look Ever More Like Ponzi Schemes (Murphy)

The FT has reported this morning that: “Debt at UK listed companies has soared to hit a record high of £390bn as companies have scrambled to maintain dividend payouts in response to shareholder demand despite weak profitability.” They added: “UK plc’s net debt has surpassed pre-crisis levels to reach £390.7bn in the 2017-18 financial year, according to analysis from Link Asset Services, which assessed balance sheet data from 440 UK listed companies.” So what, you might ask? Does it matter that companies are making sense of low-interest rates to raise money when I am saying that government could and should be doing the same thing?

Actually, yes it does. And that’s because of what the cash is being used for. Borrowing for investment makes sense. Borrowing to fund revenue investment (that is training, for example, which cannot go on the balance sheet but still adds value to the business) makes sense. But borrowing to pay a dividend when current profits and cash flow would not support it? No, that makes no sense at all. Unless, of course, you are CEO on a large share price linked bonus package and your aim is to manipulate the market price of the company. It is that manipulation that is going on here, I suggest. These loans are being used to artificially inflate share prices.

The problem is systemic. In the US the problem is share buybacks, which I read recently have exceeded $5 trillion in the last decade, meaning that US companies are now by far the biggest buyers of their own shares. That is, once again, market manipulation. And this manipulation does matter. People think their savings and pensions are safe because of rising share prices. They do not realise it is all a con-trick. And companies claim that their pension funds are better funded as a result of these share prices, and so they are meeting their obligations to their employees when that too is a con-trick. They may be insolvent when the truth is known, so serious is the fraud.

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Japan plays a strange role in the global economy. It won’t be able to keep that up much longer. The Bank of Japan has many options; none are good.

A Japanese Tsunami Out Of US CLOs Is Coming (HC)

Japan is at the very centre of the global financial system. It has run current account surpluses for decades, building the world’s largest net foreign investment surplus, or its accumulated national savings. Meanwhile, other nations, such as the US, have borrowed from nations like Japan to live beyond their own means, building net foreign investment deficits. We now have unprecedented levels of cross-national financing.

Much of Japan’s private sector saving is placed in Yen with financial institutions who then invest overseas. These institutions currency hedged most of their foreign assets to reduce risk weighted asset charges and currency write down risks. The cost of hedging USD assets has however risen due to a flattening USD yield curve and dislocations in FX forwards. As shown below, their effective yield on a 10 year US Treasury (UST) hedged with a 3 month USDJPY FX forward has fallen to 0.17%. As this is below the roughly 1% yield many financial institutions require to generate profits they have been selling USTs, even as unhedged 10 year UST yields rise. The effective yield will fall dramatically for here if 3 month USD Libor rises in line with the Fed’s “Dot Plot” forecast for short term rates, assuming other variables like 10 year UST yields remain constant.

As Japanese financial institutions sell US Treasuries, which are considered the safest foreign asset, they are shifting more into higher yielding and higher risk assets; foreign bonds excluding US treasuries as well as foreign equity and investment funds. This is a similar pattern to what we saw prior to the last global financial crisis. In essence, Japan’s financial institutions are forced to take on more risk in search of yield to cover rising hedge costs as the USD yield curve flattens late in the cycle. Critically as the world’s largest net creditor they facilitate significant added liquidity for higher risk overseas borrowers late into the cycle.

I follow these flows closely. One area I think is rather interesting is US Collateralised Loan Obligations (CLOs) which Bloomberg reports “ballooned to a record last quarter thanks in large part to unusually high demand from Japanese investors”. CLOs are essentially a basket of leveraged loans provided to generally lower rated companies with very little covenant protection. Alarmingly, some US borrowers have used this debt to purchase back so much of their own stock that their balance sheets now have negative net equity. A recent Fed discussion paper shows in the following chart that CLOs were the largest mechanism for the transfer of corporate credit risk out of undercapitalised banks in the US and into the shadow banking sector. Japanese financial institutions have been the underwriter of much of that risk in their search for yield.

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“This reduction in costs is financed by pensioners and savers who are forced to invest in these debt instruments, often by institutional mandate.”

The Eurozone’s Coming Debt Crisis (Lacalle)

The European Central Bank (ECB) has signaled the end of its asset purchase program and even a possible rate hike before 2019. After more than 2 trillion euros of asset purchases and a zero interest rate policy, it is long overdue. The massive quantitative easing (QE) program has generated very significant imbalances and the risks far outweigh the questionable benefits. The balance sheet of the ECB is now more than 40 percent of the eurozone GDP. The governments of the eurozone, however, have not prepared themselves at all for the end of stimuli. They often claim that deficits have been reduced and risks contained. However, closer scrutiny shows that the bulk of deficit reductions came from lower cost of government debt.

Eurozone government spending has barely fallen, despite lower unemployment and rising tax revenues. Structural deficits remain stubborn, and in some cases, unchanged from 2013 levels. In other words, the problems are still there, they were just hidden for a while, swept under the rug of an ever-expanding global economy. The 19 eurozone countries have collectively saved 1.15 trillion euros in interest payments since 2008 due to ECB rate cuts and monetary policy interventions, according to German media outlet Handelsblatt. This reduction in costs is financed by pensioners and savers who are forced to invest in these debt instruments, often by institutional mandate.

However, that illusion of savings and budget stability will rapidly disappear as most Eurozone countries face massive amounts of debt coming due in the 2018–2020 period and wasted precious years of quantitative easing without implementing strong structural reforms. The recent troubles of Italian banks are just one precursor of things to come. Taxes rose for families and small and medium-sized enterprises, while current spending by governments barely fell, competitiveness remained poor, and a massive 1 trillion euro in nonperforming loans raises doubts about the health of the European financial system.

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Good overview. Crises wherever you look.

The ‘Dirty Dozen’ Sectors Of Global Debt (Rochford)

When considering where the global credit cycle is at, it’s often easy to form a view based on a handful of recent articles, statistics and anecdotes. The most memorable of these tend to be either very positive or negative otherwise they wouldn’t be published or would be quickly forgotten. A better way to assess where the global credit cycle is at is to look for pockets of dodgy debt. If these pockets are few, credit is early in the cycle with good returns likely to lie ahead. If these pockets are numerous, that’s a clear indication that credit is late cycle.

In reviewing global debt, twelve sectors standout for their lax credit standards and increasing risk levels. There’s excessive risk taking in developed and emerging debt, as well as in government, corporate, consumer and financial sector debt. This points to global credit being late cycle. Central banks have failed to learn the lessons from the last crisis. By seeking to avoid or lessen the necessary cleansing of malinvestment and excessive debt, this cycle’s economic recovery has been unusually slow. Ultra-low interest rates and quantitative easing have increased the risk of another financial crisis, the opposite of the financial stability target many central bankers have.

For global debt investors, the current conditions offer limited potential for gains beyond carry. With credit spreads in many sectors at close to their lowest in the last decade, there is greater potential for spreads to widen dramatically than there is for spreads to tighten substantially. Keeping credit duration low, staying senior in the capital structure and shifting up the rating spectrum will cost some carry. However, the cost of de-risking now is as low as it has been for a long time. If the risks in the dirty dozen sectors materialise in the medium term, the losses avoided by de-risking will be a multiple of the carry foregone.

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I’d say it’s about time for the British to wake up to the damage May et al are inflicting on the nation.

UK’s Latest Brexit Proposal Is Unrealistic, Say EU Officials (G.)

A draft of Theresa May’s Brexit plan has already been dismissed as unrealistic by senior EU officials, who say the UK has no chance of changing the European Union’s founding principles. The prime minister is gathering her squabbling ministers at Chequers on Friday for a one-day discussion to thrash out the UK’s future relationship with the EU. But EU sources who have seen drafts of the long-awaited British white paper said the proposals would never be accepted. “We read the white paper and we read ‘cake’,” an EU official told the Guardian, a reference to Boris Johnson’s one-liner of being “pro having [cake] and pro-eating it”. Since the British EU referendum, “cake” has entered the Brussels lexicon to describe anything seen as an unrealistic or far-fetched demand.

May’s white paper is expected to propose the UK remaining indefinitely in a single market for goods after Brexit, to avoid the need for checks at the Irish border. While the UK is offering concessions on financial services, it wants restrictions on free movement of people – a long-standing no-go for the EU. Jean-Claude Piris, a former head of the EU council’s legal service, said it would be impossible for the EU to split the “four freedoms” underpinning the bloc’s internal market, which are written into the 1957 treaty that founded the European project: free movement of goods, services, capital and people. “The EU is in difficulties at the moment; the one and only success which glues all these countries together is a little bit the money and the internal market,” Piris said. “If you fudge the internal market by allowing a third state to choose what they want … it is the beginning of the end.”

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Not easy to find the right position on the topic. But Europe seems to show that uncontrolled immigration leads to the rise of right wing movements. Merkal gave birth to Salvini.

Nassim Taleb Slams “These Virtue-Signaling Open-Borders Imbeciles” (ZH)

As liberals across America continue to attempt to one-up one another with the volume of virtue they can signal, specifically on the question of ‘open borders’ – especially since ‘jenny from the bronx’ victory over the weekend, none other than Nassim Nicholas Taleb unleashed a trite 3-tweet summary of how farcical this argument is…

What intellectuals don’t get about MIGRATION is the ethical notion of SYMMETRY:

1) OPEN BORDERS work if and only if the number of pple who want to go from EU/US to Africa/LatinAmer equals Africans/Latin Amer who want to move to EU/US

2) Controlled immigration is based on the symmetry that someone brings in at least as much as he/she gets out. And the ethics of the immigrant is to defend the system as payback, not mess it up. Uncontrolled immigration has all the attributes of invasions.

3) As a Christian Lebanese, saw the nightmare of uncontrolled immigration of Palestinians which caused the the civil war & as a part-time resident of N. Lebanon, I am seeing the effect of Syrian migration on the place.

So I despise these virtue-signaling open-borders imbeciles.

Silver Rule in #SkinInTheGame

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Mutti’s holding centers.

Merkel Dodges Political Bullet With Controversial Migrant Deal (AFP)

German Chancellor Angela Merkel survived a bruising challenge to her authority with a compromise deal on immigration but faced charges Tuesday that it spelt a final farewell to her welcoming stance toward refugees. In high-stakes crisis talks overnight, Merkel had put to rest for now a dangerous row with her hardline Interior Minister Horst Seehofer that had threatened the survival of her fragile coalition government. In separate statements, Merkel praised the “very good compromise” that she said spelt a European solution, while Seehofer withdrew a resignation threat and gloated that “it’s worth fighting for your convictions”.

In a pact both sides hailed as a victory, Merkel and Seehofer agreed to tighten border controls and set up closed holding centres to allow the speedy processing of asylum seekers and the repatriations of those who are rejected. They would either be sent back to EU countries that previously registered them or, in case arrival countries reject this – likely including frontline state Italy – be sent back to Austria, pending an agreement with Vienna. CSU general secretary called the hardening policy proposal the last building block “in a turn-around on asylum policy” after a mass influx brought over one million migrants and refugees.

But criticism and doubts were voiced quickly by other parties and groups, suggesting Merkel may only have won a temporary respite. Refugee support group Pro Asyl slammed what it labelled “detention centres in no-man’s land” and charged that German power politics were being played out “on the backs of those in need of protection”. Bernd Riexinger of the opposition far-left Die Linke party spoke of “mass internment camps” as proof that “humanity got lost along the way” and urged Merkel’s other coalition ally, the Social Democrats (SPD), to reject the plan.

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And Merkel made Kurz possible, too.

Austria Says To ‘Protect’ Its Borders After German Migrant Deal (AFP)

Austria’s government warned Tuesday it could “take measures to protect” its borders after Germany planned restrictions on the entry of migrants as part of a deal to avert a political crisis in Berlin. If the agreement reached Monday evening is approved by the German government as a whole, “we will be obliged to take measures to avoid disadvantages for Austria and its people,” the Austrian government said in a statement. It added it would be “ready to take measures to protect our southern borders in particular,” those with Italy and Slovenia. German Chancellor Angela Merkel reached a deal Monday on migration with her rebellious interior minister, Horst Seehofer, to defuse a bitter row that had threatened her government.

Among the proposals is a plan to send back to Austria asylum seekers arriving in Germany who cannot be returned to their countries of entry into the European Union. Austria said it would be prepared to take similar measures to block asylum seekers at its southern borders, with the risk of a domino effect in Europe. “We are now waiting for a rapid clarification of the German position at a federal level,” said the statement, signed by Austria’s conservative Chancellor Sebastian Kurz and his allies of the far-right Freedom party, Vice Chancellor Heinz-Christian Strache and Interior Minister Herbert Kickl. “German considerations prove once again the importance of a common European protection of the external borders,” the statement said.

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Wonder what the strategy meetings were like.

Is Facebook A Publisher? In Public It Says No, But In Court It Says Yes (G.)

Facebook has long had the same public response when questioned about its disruption of the news industry: it is a tech platform, not a publisher or a media company. But in a small courtroom in California’s Redwood City on Monday, attorneys for the social media company presented a different message from the one executives have made to Congress, in interviews and in speeches: Facebook, they repeatedly argued, is a publisher, and a company that makes editorial decisions, which are protected by the first amendment. The contradictory claim is Facebook’s latest tactic against a high-profile lawsuit, exposing a growing tension for the Silicon Valley corporation, which has long presented itself as neutral platform that does not have traditional journalistic responsibilities.

The suit, filed by an app startup, alleges that Mark Zuckerberg developed a “malicious and fraudulent scheme” to exploit users’ personal data and force rival companies out of business. Facebook, meanwhile, is arguing that its decisions about “what not to publish” should be protected because it is a “publisher”. In court, Sonal Mehta, a lawyer for Facebook, even drew comparison with traditional media: “The publisher discretion is a free speech right irrespective of what technological means is used. A newspaper has a publisher function whether they are doing it on their website, in a printed copy or through the news alerts.” [..] Mehta argued in court Monday that Facebook’s decisions about data access were a “quintessential publisher function” and constituted “protected” activity, adding that this “includes both the decision of what to publish and the decision of what not to publish”.

David Godkin, an attorney for Six4Three, later responded: “For years, Facebook has been saying publicly … that it’s not a media company. This is a complete 180.” Questions about Facebook’s moral and legal responsibilities as a publisher have escalated surrounding its role in spreading false news and propaganda, along with questionable censorship decisions. Eric Goldman, a Santa Clara University law professor, said it was frustrating to see Facebook publicly deny that it was a publisher in some contexts but then claim it as a defense in court. “It’s politically expedient to deflect responsibility for making editorial judgements by claiming to be a platform,” he said, adding, “But it makes editorial decisions all the time, and it’s making them more frequently.”

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He did pull it off. But it may be too little too late. Biggest no-no: Model 3 was supposed to be $35,000. ended up at $78,000.

Tesla’s All-Nighter To Hit Production Goal Fails To Convince Wall Street (R.)

Tesla’s burning the midnight oil to hit a long-elusive target of making 5,000 Model 3 vehicles per week failed to convince Wall Street that the electric carmaker could sustain that production pace, sending shares down 2.3% on Monday. Tesla met the target by running around the clock and pulling workers from other projects, workers said. The company also took the unprecedented step of setting up a new production line inside a tent on the campus of its Fremont factory, details of which Chief Executive Elon Musk tweeted last month. Tesla’s heavily-shorted shares rose as much as 6.4% to $364.78 in early trading, but sank after several analysts questioned whether Tesla would be able to sustain the Model 3 production momentum, which is crucial for the long-term financial health of the company.

“In the interim, we do not see this production rate as operationally or financially sustainable,” said CFRA analyst Efraim Levy. “However, over time, we expect the manufacturing rate to become sustainable and even rise.” Levy cut CFRA’s rating on Tesla stock to “sell” from “hold.” Tesla, which Chief Executive Elon Musk hailed on Sunday as having become a “real car company,” said it now expects to boost production to 6,000 Model 3s per week by late August, signaling confidence about resolving technical and assembly issues that have plagued the company for months. Tesla also reaffirmed a positive cash flow and profit forecast for the year. Tesla has been burning through cash to produce the Model 3. Problems with an over-reliance on automation, battery issues and other bottlenecks have potentially compromised Tesla’s position in the electric car market as a host of competitors prepare to launch rival vehicles.

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NATO is “justified by the need to manage the security threats provoked by its enlargement.”.

The New York Times Squares off with the Truth, Again (AHT)

Whenever I’m having a rough day and need a pick-me-up, I turn to The New York Times’ editorial page. It’s always a gas to see how far the empire’s leading propaganda outfit is prepared to go in its mission to pull the wool over we the people’s gullible little eyes. The good editors have come through for me again with their latest entry, “Trump and Putin’s Too-Friendly Summit.” (Original title: “Trump and Putin: Best Frenemies for Life”). No doubt the original headline was deemed rather too impish for such a serious newspaper—it might, for instance, have alerted readers to the fact that the editorial’s content is not to be taken very seriously—and so was understandably jettisoned.

“One would think,” the editors write, “that the president of the United States would let Mr. Putin know that he faces a united front of Mr. Trump and his fellow NATO leaders, with whom he would have met days before the [Putin] summit in Helsinki.” Alas, during said meeting Trump reportedly remarked that “NATO is as bad as NAFTA”—the “free trade” agreement that has succeeded in decimating most of the manufacturing jobs spared by the automation wrecking ball. In other words, Trump does not necessarily think it’s a good idea to encircle Russia with a hostile military alliance whose existence, according to geopolitical expert Richard Sakwa, is “justified by the need to manage the security threats provoked by its enlargement.” (If you haven’t read Professor Sakwa’s comprehensive study of the Ukrainian crisis, Frontline Ukraine, put it at the top of your summer reading list.)

One notes the Turgidsonian delight with which the Times reminds us that, should push come to shove, we’ve got those Russki bastards outgunned. Of course, gullibles like you and I are to pay no mind to the fact that such a confrontation (a military one, for the Times brought up NATO) would almost certainly involve a nuclear exchange, rendering the disparity in manpower that so excites the Times totally meaningless. No, what’s important is that NATO has twenty-nine member states and counting, while the Warsaw Pact was dissolved twenty-seven years ago: ergo, unless he wants the old mailed fist, Putin had better ask “how high?” when we tell him to jump. One would be hard-pressed to come up with a more delusional assessment of where things stand.

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“We are in that constitutional crisis now, but just at the start of it.”

Anthony Kennedy and Our Delayed Constitutional Crisis (GP)

Like “swing vote” Justice Sandra Day O’Connor before him, “swing vote” justice Anthony Kennedy has been one of the worst Supreme Court jurists of the modern era. With swing-vote status comes great responsibility, and in the most consequential — and wrongly decided — cases of this generation, O’Connor and Kennedy were the Court’s key enablers. They • Cast the deciding vote that made each decision possible • Kept alive the illusion of the Court’s non-partisan legitimacy. Each of these points is critical in evaluating the modern Supreme Court. For two generations, it has made decisions that changed the constitution for the worse. (Small “c” on constitution to indicate the original written document, plus its amendments, plus the sum of all unwritten agreements and court decisions that determine how those documents are to be interpreted).

These horrible decisions are easy to list. They expanded the earlier decision on corporate personhood by enshrining money as political speech in a group of decisions that led to the infamous Citizens United case (whose majority opinion, by the way, was written by the so-called “moderate” Anthony Kennedy); repeatedly undermined the rights of citizens and workers relative to the corporations that rule and employ them; set back voting rights equality for at least a generation; and many more. After this next appointment, many fear Roe v. Wade may be reversed. Yet the Court has managed to keep (one is tempted to say curate) its reputation as a “divided body” and not a “captured body” thanks to its so-called swing vote justices and the press’s consistent and complicit portrayal of the Court as merely “divided.”

The second point above, about the illusion of the Court’s legitimacy, is just as important as the first. If the Court were ever widely seen as acting outside the bounds of its mandate, or worse, seen as a partisan, captured organ of a powerful and dangerous political minority (which it certainly is), all of its decisions would be rejected by the people at large, and more importantly, the nation would plunged into a constitutional crisis of monumental proportions. We are in that constitutional crisis now, but just at the start of it. We should have been done with it long ago. Both O’Connor and Kennedy are responsible for that delay.


Image credit: Mike Thompson / Detroit Free Press

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A tale of two refugees
Putin: Snowden is free to do whatever he wants
Lenin: I ordered Assange to be gagged and isolated and am coordinating “next steps” with US

‘Snowden is the Master of His Own Destiny’ – Russia (TeleSur)

United States President Donald Trump is expected to pressure Russia to hand over NSA whistleblower Edward Snowden in exchange for sanctions relief at the upcoming Trump-Putin summit; however, Russia has emphasized that they “are not in a position” to expel Snowden and will “respect his rights” if any such attempt is made. “I have never discussed Edward Snowden with (Donald Trump’s) administration,” Russian Foreign Minister Sergey Lavrov said to Channel 4 reporters. “When he (Putin) was asked the question, he said this is for Edward Snowden to decide. We respect his rights, as an individual. That is why we were not in a position to expel him against his will because he found himself in Russia even without a U.S. passport, which was discontinued as he was flying from Hong Kong.”

Snowden, who is being prosecuted in the United States for leaking classified documents that showed surveillance abuse by U.S. intelligence agencies, was given political asylum in Russia after his passport was revoked. “Edward Snowden is the master of his own destiny,” Lavrov said. Trump is meeting with Russian President Vladimir Putin on July 16 in Helsinki, where Putin is expected to push for an end to U.S. sanctions. Trump has said he would like better relations with Russia, perhaps as a way of pulling them away from China, but Trump’s opponents in the United States are already applying political pressure on him for holding the summit, in the midst of the tensest U.S.-Russian relations since the height of the Cold War.

The fate of Wikileaks founder Julian Assange also lay in the balance when U.S. Vice President Mike Pence met with Ecuador’s President Lenin Moreno this week. “The vice president raised the issue of Mr. Assange. It was a constructive conversation. They agreed to remain in close coordination on potential next steps going forward,” a White House official said in a statement.

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Jun 302018
 


Paul Gauguin We hail thee Mary 1891

 

If The US Middle Class Disappears So Will The US Economy (Hutch)
Nervous Investors Exiting US Stocks At Near-Record Pace (CNBC)
Emerging Markets Are In A Death Cross (CNBC)
Are Central Banks Embracing Too Much Risk? (R.)
Stress Test Results Signal More Flexible New-Look Fed (R.)
EU Warns Deep Disputes With UK Threaten No-Deal Brexit (Ind.)
EU Leaders Say Post-Brexit Single-Market Access For Goods A Nonstarter (G.)
Hidden Figures (Jim Kunstler)
Canada Hits US With Retaliatory Tariffs: ‘We Will Not Back Down’ (G.)
Merkel Confirms Bilateral Migrant Agreements With Spain And Greece (DW)
Not Up To US To Decide On Assange Asylum, Ecuador Says (AFP)
Edward Snowden Calls Russian Government ‘Corrupt’ (Ind.)
The Great Firewall Of China (G.)

 

 

“..the “Walmartization” of America.”

If The US Middle Class Disappears So Will The US Economy (Hutch)

Economies have ebbs and flows. In spite of what they teach you in economics 101 nothing is ever in equilibrium. There are just too many parts as well as internal and external influences although there are times when activity is stronger than others. The US built one of the greatest economic powerhouses on earth after World War II, however it was already well on its way from the 1800s as it built out its infrastructure and put many to work. There was a time when the US consumed the majority of what it produced as a nation and then exported the remainder. Who was responsible for the consumption? It was the middle class. The middle class made up the majority of the population. They had jobs and respectable salaries. So what happened?

According to a research report by the Pew Research Center in 2012, “The Lost Decade of the Middle Class” they state: “For the half century following World War II, American families enjoyed rising prosperity in every decade—a streak that ended in the decade from 2000 to 2010, when inflation-adjusted family income fell for the middle income as well as for all other income groups, according to U.S. Census Bureau data.” The above graph shows that the 50s and 60s had the strongest middle class. In 1950 and 1951 the US had successive years of 8% GDP growth. The report also highlights how the net worth of middle income families—that is, the sum of assets minus debts— took a hit from 2001 to 2010 from the Federal Reserve’s Survey of Consumer Finances. Median net worth fell 28%, to $93,150, erasing two decades of gains.

So we have a situation where consumer debt has increased over the years and incomes have fallen. There are a large number of reasons for this. The manufacturing base has shrunk as companies chose to produce goods in other countries in order to take advantage of cheap labour so they could give themselves pricing advantages. There is, what has become to be known as the “Walmartization” of America. Author John Atcheson writes, “If you want to know why the middle class disappeared and where they went, look no further than your local Walmart. People walked in for the low prices, and walked out with a pile of cheap stuff, but in a figurative sense, they left their wages, jobs, and dignity on the cutting room floor of the House of Cheap.” Driving prices lower and lower is just a race to the bottom that erodes everyone’s quality of life.

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Safety.

Nervous Investors Exiting US Stocks At Near-Record Pace (CNBC)

Investors bailed out of U.S. stocks at a near-record pace in the last week, as money flowing into Treasury bills surged to a 10-year high. Outflows from U.S. stock funds and ETFs totaled $24.2 billion, the third-highest ever, and the $30 billion that came out of global stock funds in total in the past week was the second-highest ever and largest since the financial crisis, according to Bank of America Merrill Lynch strategists. The outflows from U.S. stocks were the highest since the stock market correction in February. Bonds, at the same time, saw small inflows of $700 million. “That nervousness, the losses people were experiencing in non-U.S. markets with the trade wars has probably led to what you’re seeing in the markets in the last week or so — a big unwind of positioning, a flight to quality,” said Michael Hartnett, BofAML chief investment strategist.

Hartnett said there was a “pervasive euphoria” about the U.S. at the beginning of the year and that has faded. Now, investors are adjusting positions, not panicking, though T-bills, considered the safest of safe haven bets, continued to pull in funds at a rapid pace. “It’s not like it’s February 2016. It’s not like we’re staring recession in the face, and everyone is cashed up to the eyeballs and policymakers are panicking. That’s not what’s happening. It’s just that people were pricing in Goldilocks forever earlier on in the year, and that was wrong. They’re probably unwinding that positioning,” he said. “It helps explain why the markets have firmed up in the last couple of days. You want to buy fear and sell greed.” Hartnett said July could be a month where investors sell volatility, but then the market could get rockier in August and September, ahead of the midterm elections.

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Prone to get a whole lot worse.

Emerging Markets Are In A Death Cross (CNBC)

Emerging markets are feeling the heat. China is in a bear market, Brazil is closing in on one, and the EEM emerging markets ETF could close out its worst quarter in nearly three years on Friday. Brace for more pain, says one technical analyst. “There’s really a time to own EEM and it’s time not to own EEM,” Piper Jaffray’s chief market technician Craig Johnson told CNBC’s “Trading Nation” on Thursday. “Our rising dollar is going to be an issue for EEM in here and it looks like to me you got probably another 12 percent downside before you get down to a material support area.”

A 12 percent decline from Thursday’s close would put the EEM ETF at around $37.50, its lowest level since March 2017. On Friday afternoon it had risen 1.5 percent to $43.35. The EEM ETF has also entered a death cross, a technical red flag for Johnson. A death cross marks the point on a chart where a longer-term moving average, such as the 200-day, breaks above a shorter-term moving average, such as the 50-day. The technical indicator demonstrates a sharp breakdown in a security’s price and often prefaces further downside.

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How is that a question?

Are Central Banks Embracing Too Much Risk? (R.)

Central banks are usually thought of as very conservative institutions; if they were cars they would be safe, family sedans. Lately, though, some central banks have been doing the market equivalent of zipping around in a sporty convertible. In recent years, at least two large central banks have been snapping up large quantities of equities, typically considered a risky investment. The Swiss National Bank now has about 20% of its reserves in equities, up from about 7 percent a decade ago. More than half of that is in U.S. equities. And to say that the Bank of Japan has become a player in that country’s equity market is an understatement; BOJ currently owns nearly 75% of the Japanese exchange-traded fund (ETF) market, again up sharply from just a few years ago.

Other central banks, including the European Central Bank and South African Reserve Bank, also make similar purchases, although Japan and Switzerland are the most aggressive buyers of equities. If the idea of a central bank owning a significant amount of stock in a company sounds strange to you, that’s hardly surprising. In the United States, for example, the Federal Reserve Bank is legally prohibited from owning equities, and instead invests its reserves in bonds and other government-backed securities. Some other countries, obviously, have different rules in their bank charters, and modest equity holdings have been a central bank strategy for years. Even so, the practice of central banks owning significant shares of equities is a very recent phenomenon. So why is it happening now, and what kind of risks does this unprecedented trend carry?

In the case of Japan, the motive is clear: for decades the country has had difficulty sustaining economic growth, and the Bank of Japan has already exhausted more traditional forms of stimulus, such as interest rate cuts and bond purchases. Both Prime Minister Shinzo Abe and BOJ Governor Haruhiko Kuroda have been at pain to stimulate growth and defy expectations of deflation. Switzerland’s bank, by contrast, seems to be acting more like an aggressive individual investor: it has been buying stocks because that is where money is to be made. Unbeknownst to many American investors, the Swiss National Bank is a significant shareholder in well-known American firms like Amazon, Apple, Facebook and Microsoft.

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All in for Wall Street.

Stress Test Results Signal More Flexible New-Look Fed (R.)

This year’s Federal Reserve stress test results suggested a more flexible approach, a further sign the regulator’s new leadership is responding positively to a Wall Street push for pragmatic bank supervision, analysts and lawyers said. Banks that took a one-off capital hit due to the 2017 U.S. tax overhaul got a conditional pass, a departure from the Fed’s traditional strict pass-fail approach to quantitative capital issues, while scandal-plagued Wells Fargo was able to double share buyback plans. Goldman Sachs and Morgan Stanley were dinged since their capital fell below the Fed’s minimum, but the regulator’s response this year sounded a more industry-friendly tone under Chairman Jerome Powell and Vice Chairman Randal Quarles, President Donald Trump appointees, analysts and lawyers said.

“They have allowed firms to pass on the basis there were special circumstances and applied a level of pragmatism in the way they haven’t in the past. This is the new Fed and it signals to me an early retirement of this super-strict quantitative test,” said Mike Alix, financial services risk leader at PwC. The Fed on Thursday approved the capital plans of 34 lenders following the second leg of its annual tests, a process introduced after the 2007-2009 financial crisis to assess banks’ capacity to withstand a severe recession. The U.S. central bank has ramped up its worst-case scenarios each year.

The U.S. tax code rewrite signed into law in December meant Goldman and Morgan Stanley’s Thursday results were weighed, in part, by changes to the treatment of past losses on hypothetical tax bills under the Fed’s scenarios. But since the tax issue was a one-off and capital levels in the system are high, the Fed felt it was unnecessary to fail the two banks, senior Fed officials said.

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“Asked about Ms May’s dinner speech on Friday morning, Leo Varadkar, the Irish prime minister, looked confused, and said: “There was a speech? Haha.”

EU Warns Deep Disputes With UK Threaten No-Deal Brexit (Ind.)

The European Union has warned that “serious divergence” between itself and Britain in Brexit talks risks the possibility of a no deal, following a meeting by the 27 national leaders in Brussels on Friday. After roughly an hour of discussion, leaders signed off a joint statement pledging to prepare for the possibility of a no-deal situation and highlighting their “concern” at the lack of progress on the Irish border issue. Speaking ahead of the meeting, Michel Barnier, the European Commission’s chief negotiator, warned: “On Brexit, we have made progress, but huge and serious divergence remains, in particular on Ireland and Northern Ireland.”

Mr Barnier called for “workable and realistic proposals” to be included in a UK government white paper scheduled for release next month. He added that “time is very short” and said UK negotiators should return to Brussels on Monday to intensify talks. The EU says a deal must be struck before October to stop Britain crashing out of the bloc in March without a transition period – a scenario that would be expected to cause economic chaos. Theresa May on Thursday night addressed leaders over dinner about Brexit for 10 minutes but her speech was apparently overshadowed by hours of discussions about the EU migration crisis, the main focus of the summit. Asked about Ms May’s dinner speech on Friday morning, Leo Varadkar, the Irish prime minister, looked confused, and said: “There was a speech? Haha.”

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One long litany of nonstarters.

EU Leaders Say Post-Brexit Single-Market Access For Goods A Nonstarter (G.)

Theresa May has been told by European leaders that an attempt to protect the UK’s industrial base by gaining single market access for goods alone after Brexit is a nonstarter, as the Irish prime minister warned: “We are not going to let them destroy the European Union.” After being given a “broad brush approach” presentation at a Brussels summit of May’s long-awaited paper, yet to be signed off by her warring British cabinet, the taoiseach, Leo Varadkar, told her that unless the final document presented a departure from the UK government’s thinking over the last two years, it would be dead on arrival. The British government is continuing to push the idea of keeping frictionless trade on goods, claiming that it would be a good deal for Europe, given the large trade surplus it enjoys.

May has promised to publish her vision for the future trading relationship after a cabinet meeting at Chequers on Friday. Speaking at the end of a summit dominated by a row over migration, Donald Tusk, the European council president, said that “quick progress” in the Brexit negotiations was needed for there to be any hope of an agreement in October, at what is increasingly being billed as a make-or-break summit. “This is the last call to lay the cards on the table,” Tusk said, of the EU’s call for a workable plan. The French president, Emmanuel Macron, said: “There is a clear message in this respect – we can no longer wait”.

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Anyone seen Jeff Sessions lately?

Hidden Figures (Jim Kunstler)

Now, Mr. Trey Gowdy (R – SC) is a different breed of porpoise among congressmen, kind of legal man-eating orca. In look and demeanor, he comes off as a cross between Atticus Finch and the young feller who played the banjo so well in the opening scenes of Deliverance. Mr. Rosenstein didn’t dare lay any mirthful smirky trips on Mr. Gowdy, who radiated the consolidated wrath of the legislative branch at this flock of executive branch popinjays. Mr. Gowdy, who is declining to run for his seat this year, may be bound for bigger things. Some say he may be the next Attorney General. In case you’ve forgotten, Rod Rosenstein is not the Attorney General, he’s the Deputy AG.

His boss is Mr. Jeff Sessions, an elusive figure for months now in the malarial DC backwaters, like that Louisiana Swamp Thang that turns up in the fake Bigfoot documentaries, looming hairily through the night-vision goggles in a cypress slough. Maybe three or four people have laid eyes on him since sometime back in April. Better check his office, make sure he isn’t hunched over face-down in a take-out order of tonkatsu ramen. It’s rumored that our president, the Golden Golem of Greatness, can, shall we say, put the Department of Justice and its subsidiary, the FBI, out of their current misery by finally firing a few of these conniving top dawgs. Order Rosenstein to release un-redacted files he’s been sitting on for a year, and fire his ass for cause when he refuses. In the case of Mr. Sessions, for Godsake, call the undertaker.

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Yogurt and whiskey.

Canada Hits US With Retaliatory Tariffs: ‘We Will Not Back Down’ (G.)

Canada has announced billions of dollars in retaliatory tariffs against the US in a tit-for-tat response to the Trump administration’s duties on Canadian steel and aluminum. Justin Trudeau’s government released the final list of items that will be targeted beginning 1 July. Some items will be subject to taxes of 10 or 25%. “We will not escalate and we will not back down,” the Canadian foreign minister, Chrystia Freeland, said. The taxes on items including ketchup, lawnmowers and motorboats amount to $12.6bn. “This is a perfectly reciprocal action,” Freeland said. “It is a dollar-for-dollar response.” Freeland said they had no other choice and called the tariffs regrettable.

Many of the US products were chosen for their political rather than economic impact. For example, imports just $3m worth of yoghurt from the US annually and most of it comes from one plant in Wisconsin, the home state of the House speaker, Paul Ryan. The product will now be hit with a 10% duty. Another product on the list is whiskey, which comes from Tennessee and Kentucky, the latter of which is the home state of the Republican Senate leader, Mitch McConnell. Freeland also said they are prepared if Donald Trump, the US president, escalates the trade war. “It is absolutely imperative that common sense should prevail,” she said. “Having said that, our approach from day one of the Nafta negotiations has been to hope for the best but prepare for the worst.”

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How much money is on the line, Angela?

Merkel Confirms Bilateral Migrant Agreements With Spain And Greece (DW)

Spain and Greece have agreed to take back asylum seekers already registered in those countries who are intercepted at the Austria-German border, Chancellor Angela Merkel confirmed on Friday. However she said no bilateral agreement had been made with Italy. The agreements are temporary measures to stem secondary migration until EU-wide policies take effect. “What we achieved here together is perhaps more than I had expected,” Merkel told reporters at the end of the summit. Merkel is to inform her coalition allies about the agreement on Friday evening.

Merkel was asked if the agreements with Athens and Madrid met demands from her German conservative CSU coalition partners. Merkel told reporters she believed they even surpassed them: “They are more than equivalent in their effect,” she said. “We are not at the end of the road. I always said that we would never be able to agree a common European asylum system here. But the more we agree among ourselves, the closer we get to a possible European solution. I’m convinced of that.” The tentative agreement with Greece and Spain came on the sidelines of an EU leaders’ summit that reached a breakthrough on migration. It will go into effect once operational details are worked out in the next four weeks, the Chancellery said.

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Does Ecuador have a spine?

Not Up To US To Decide On Assange Asylum, Ecuador Says (AFP)

It’s not up to Washington to decide the fate of WikiLeaks founder Julian Assange, Ecuador’s top diplomat said Friday, following the visit of US Vice President Mike Pence. Pence “raised the issue” of the Australian anti-secrecy activist – holed up at Ecuador’s embassy in London since 2012 – when he met with Lenin Moreno on Thursday, an official with the US vice president’s office confirmed. “Ecuador and the United Kingdom, and of course Mr Assange as a person who is currently staying, on asylum, at our embassy” will decide the next steps, Foreign Minister Jose Valencia told reporters. “It does not enter, therefore, on an agenda with the United States.” Pence and Moreno “agreed to remain in close coordination on potential next steps going forward,” the US official told reporters traveling with Pence.

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Snowden sure has a spine.

Edward Snowden Calls Russian Government ‘Corrupt’ (Ind.)

Edward Snowden, who fled to Russia after releasing thousands of documents from the US National Security Agency, has suggested his current homeland’s government is “corrupt in many ways”. The ex-IT contractor and Central Intelligence Agency (CIA) worker, said the country’s citizen’s were warm and clever but he “strongly” disagreed with the policies of Russian president Vladimir Putin. “I think the public feels disempowered. Russians are not naive, they know that state TV is unreliable. The Russian government is corrupt in many ways, that’s something the Russian people realise,” the 35-year-old told German newspaper Suddeutsche Zeitung. “Russian people are warm, they are clever. It’s a beautiful country. Their government is the problem not the people.”

Mr Snowden was granted asylum in Russia after his flight from the US when he made public the NSA’s widespread undeclared surveillance in 2013. He faces three charges under the Espionage Act in his homeland, each of which carry a minimum of 10 years in jail. He has been granted permission to stay in Russia until 2020. Asked by the Suddeutsche Zeitung whether his comments could put him in danger by angering Mr Putin, Mr Snowden said: “There’s no question, it’s a risk. Maybe they don’t care, right? Because I don’t speak Russian. “And I am literally a former CIA agent, so it’s very easy for them to discredit my political opinions as those of an American CIA agent in Russia.”

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Thought control.

The Great Firewall Of China (G.)

In December 2015, thousands of tech entrepreneurs and analysts, along with a few international heads of state, gathered in Wuzhen, in southern China, for the country’s second World Internet Conference. At the opening ceremony the Chinese president, Xi Jinping, set out his vision for the future of China’s internet. “We should respect the right of individual countries to independently choose their own path of cyber-development,” said Xi, warning against foreign interference “in other countries’ internal affairs”. No one was surprised by what they heard. Xi had already established that the Chinese internet would be a world unto itself, with its content closely monitored and managed by the Communist party.

In recent years, the Chinese leadership has devoted more and more resources to controlling content online. Government policies have contributed to a dramatic fall in the number of postings on the Chinese blogging platform Sina Weibo (similar to Twitter), and have silenced many of China’s most important voices advocating reform and opening up the internet. It wasn’t always like this. In the years before Xi became president in 2012, the internet had begun to afford the Chinese people an unprecedented level of transparency and power to communicate. Popular bloggers, some of whom advocated bold social and political reforms, commanded tens of millions of followers.

Chinese citizens used virtual private networks (VPNs) to access blocked websites. Citizens banded together online to hold authorities accountable for their actions, through virtual petitions and organising physical protests. In 2010, a survey of 300 Chinese officials revealed that 70% were anxious about whether mistakes or details about their private life might be leaked online. Of the almost 6,000 Chinese citizens also surveyed, 88% believed it was good for officials to feel this anxiety.

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Jun 052018
 


John French Sloan East Entrance, City Hall, Philadelphia 1901

 

Carbon Bubble To Destroy Trillions Of Dollars Of Global Wealth (Ind.)
The Effects Of Trump’s Steel Tariffs On Red State Energy (F.)
US Firms To Pour $2.5 Trillion Into Buybacks, Dividends, M&A This Year (CNBC)
India Central Banker Sees Sudden “Evaporation” Of Dollar Funding (ZH)
China’s Debt Crackdown To Hurt Emerging Markets, Oil, Metals – Fitch (R.)
Italy’s Long, Hot Summer (Carmen Reinhart)
Why The Euro Was Created (ZH)
Toronto’s House Price Bubble Not Fun Anymore (WS)
Why Australia’s Great Banking Boom Has Ended (SMH)
Apple Jams Facebook’s Web-Tracking Tools (BBC)
A West Coast State of Mind (Jim Kunstler)
Edward Snowden: ‘The People Are Still Powerless, But Now They’re Aware’ (G.)
Who Should Feed The World: Real People Or Faceless Multinationals? (Vidal)

 

 

Don’t think it will happen without an overall economic collapse.

Carbon Bubble To Destroy Trillions Of Dollars Of Global Wealth (Ind.)

Trillions of dollars of fossil fuel wealth will be wiped out at some point over the next 17 years even if governments fail to impose binding carbon emissions limits on industry to curb global warming, according to a major new study. Environmentalists and policymakers have long warned of the threat of a “carbon bubble” and “stranded assets” for listed energy companies, based on the possibility they will never be able to realise the value of their vast stores of oil, gas and coal if politicians actually deliver on their decarbonisation promises.

But today a group of scientists and analysts from Cambridge, Nijmegen, Macao and the Open University take that warning a step further by arguing that these assets are destined to be stranded regardless of official policies to discourage the use of fossil fuels because clean energy technologies are now developing so rapidly that those polluting assets will be worthless in any case. “Our analysis suggests that, contrary to investor expectations, the stranding of fossil fuels assets may happen even without new climate policies. This suggests a carbon bubble is forming and it is likely to burst,” said Professor Jorge Viñuales from Cambridge University. If policymakers did deliver on the decarbonisation programmes, the loss for investors would be even more rapid.

The research is at odds with work from the International Energy Agency, which projects steady price rises for fossil fuels until 2040. And Donald Trump’s decision last year to pull the United States out of the Paris Agreement on climate change has also done nothing to persuade most investors to take the stranded assets warning seriously. But the researchers’ new “simulation-based, energy-economy-carbon-cycle climate” model suggests investing in fossil fuel firms today is likely to prove a disastrous bet, suggesting that between $1 trillion and $4 trillion could be wiped off the value of global fossil fuel assets by 2035.

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Steel and concrete prices better not rise.

The Effects Of Trump’s Steel Tariffs On Red State Energy (F.)

Electricity production is heavily dependent on materials like steel, concrete, copper and aluminum, for both producing electricity and moving it around to where it’s needed (see figure). Solar and Wind energy take more steel than any other energy source. Natural gas and nuclear take the least. Solar needs 1,600 tons of steel per MW, wind energy needs over 400 tons of steel, while gas and nuclear need only 4 and 40 tons, respectively. Wind and solar also require ten times more transmission, also heavily steel-intensive, since they are usually sited far away from where the energy is used.

The average high-voltage transmission tower includes about 30 tons of steel and transmission wire contains about a ton of steel per mile. Going from our biggest solar array, located in the Mohave Desert, to Los Angeles is almost 300 miles, requiring on the order of 10,000 tons of steel depending on specific design. While we tend to think of renewables as associated with Blue States, they are actually growing faster in Red States. Four of the five states with the most installed wind energy are Texas (20,321 MW), Iowa (6,917 MW), Oklahoma (6,645 MW) and Kansas (4,451 MW). The only Blue State in the top five is California (5,662 MW).

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Prop up your stock some more.

US Firms To Pour $2.5 Trillion Into Buybacks, Dividends, M&A This Year (CNBC)

Money is pouring into the U.S. economy and in turn helping provide support for the otherwise struggling stock market. If current conditions persist, corporations are likely this year to inject more than $2.5 trillion into what UBS strategists term “flow” — the combination of share buybacks, dividends, and mergers and acquisitions activity. The development comes as companies find themselves awash in cash, thanks primarily to years of stashing away profits plus the benefits of a $1.5 trillion tax break this year that slashed corporate rates and encouraged firms to bring back money idling overseas. Companies have nearly $2.5 trillion in cash parked domestically, according to the Federal Reserve, and as much as $3.5 trillion overseas, various estimates have shown.

When all is said and done for 2018, UBS expects dividend issuance to top $500 billion, buybacks to range from $700 billion to $800 billion, and M&A to constitute about $1.3 trillion. If the numbers pan out, they would equate to about 10% of the S&P 500’s market cap and 12.5% of GDP. “Assuming improving growth and stable rates, we expect the positive positioning/flow backdrop to support US equities, which is important as the daily corporate flow slows from mid-June to mid-July,” UBS strategist Keith Parker said in a note. Parker pointed out that the firm has overweight positions in both tech and health care as the two sectors are leading the buyback boom.

Buybacks specifically have been on a torrid pace and are helping provide a floor to a market that for much of 2018 had looked tired and volatile after a 20% S&P 500 gain the year before. Repurchases are up 83% year to date, far ahead of the 9% gain in dividends, while M&A activity involving U.S. companies has surged 130%, according to UBS. [..] UBS estimates that the combination of buybacks, dividends and demand flows account for some 40% in performance this year. The S&P 500 has nudged 2.6% higher and the Dow industrials are just ahead of breakeven.

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The Fed retreats and the Treasury issues new debt.

India Central Banker Sees Sudden “Evaporation” Of Dollar Funding (ZH)

In an op-ed published overnight in the FT, a central banker writes that when it comes to the turmoil gripping the world’s Emerging Markets, whether it is the acute, idiosyncratic version observed in Argentina and Turkey, which according to JPM may be doomed, or the more gradual selloffs observed in places like Indonesia, Malaysia, Brazil, Mexico and India, don’t blame the Fed’s rate hike cycle. Instead blame the “double whammy” of the Fed’s shrinking balance sheet coupled with the dollar draining surge in debt issuance by the US Treasury.

That’s the message from the current Reserve Bank of India, Urjit Patel, who writes that “unlike previous turbulence, this episode cannot be attributed to the US Federal Reserve’s moves on interest rates, which have been rising steadily since December 2016 in a calibrated manner.” But does that mean that the Fed is not to blame for what increasingly looks like another budding EM crisis? Not at all: according to Patel, the dollar funding shortage “upheaval” stems from what he sees as the confluence of two significant events of which the Fed’s balance sheet reduction is one, while the second is the dramatic increase in US Treasury issuance to pay for Trump’s tax cuts; what is notable is that both events are drastically soaking up dollar liquidity.

As a result, Patel blames a lack a coordination between the Fed and Treasury on the adverse flow through across global funding markets as a result of this decline in dollar liquidity, and writes that “given the rapid rise in the size of the US deficit, the Fed must respond by slowing plans to shrink its balance sheet. If it does not, Treasuries will absorb such a large share of dollar liquidity that a crisis in the rest of the dollar bond markets is inevitable.” Putting these two parallel processes – which threaten to materially impair dollar funding markets – in context, on one hand there is QT, or the gradual decline in the Fed’s balance sheet which is set to peak at a rate of $50BN/month by October, while at the same time US net Treasury issuance is set to jump to $1.2 trillion in 2018 and 2019 to cover the forecasted budget deficit of $804BN and $981BN in 2018 and 2019, respectively.

And in a curious coincidence, the withdrawal of dollar funding by the Fed in monthly terms, as it reduces its reinvestment of income received, is proceeding at roughly the same pace as that of net issuance of debt by the US government. Furthermore, both processes are open ended which means that over the next few years, the government’s net issuance will stabilize, albeit at a high level, whereas the Fed’s balance-sheet reduction will keep rising. Both are terrible news for Emerging Markets, which are in desperate need of reversing the ongoing dollar outflows; however as long as Trump continues to make America great, and funds said stimulus with excess debt issuance, emerging market turmoil is virtually guaranteed.

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China retreats, too.

China’s Debt Crackdown To Hurt Emerging Markets, Oil, Metals – Fitch (R.)

China’s debt crackdown is a key risk to the country’s economic growth and will have significant knock-on effects for the global economy, particularly emerging markets with high commodity dependence or close Chinese trade links, Fitch Ratings said. Beijing’s campaign to put a lid on debt could also lead to a sharp slowdown in business investment, Fitch said late on Sunday, forecasting that growth in the world’s second-biggest economy would slow to around 4.5% over the medium term. Fitch said the implications of this scenario for the global economy would be significant but not dramatic, unlike a full-scale hard landing.

One of the most significant effects would be on commodity prices, with Fitch expecting oil and metal prices to fall 5 to 10% from its baseline scenario, reflecting China’s large role as a commodity consumer. In April, a Reuters poll of 72 institutions showed economists expected China’s economic growth to slow to 6.5% this year and 6.3% next year as Beijing extends its crackdown on riskier lending practices. GDP in 2017 expanded 6.9% in real terms and 11.2% in nominal terms. Beijing’s financial crackdown, now in its third year, has slowly pushed up borrowing costs and is choking off alternative, murkier funding sources for companies such as shadow banking.

The ratio of Chinese corporate debt to GDP is already very high by international standards – at 168% in 2017 – and is expected to start rising again as nominal GDP growth declines towards 8% from the unusually high rate of more than 11% in 2017, Fitch said. If the government aims to stabilize its corporate debt ratio by 2022, Fitch said China’s nominal economic growth rate could fall by 1 percentage point a year over the medium term while business investment growth would drop 5percentage points per year.

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Restructuring Target2. That should be fun.

Italy’s Long, Hot Summer (Carmen Reinhart)

The political upheaval and social unrest fueling the current crisis in Italy should surprise no one. On the contrary, the only uncertainty was when exactly matters would come to a head. Now they have. Italy’s per capita GDP in 2018 is about 8% below its level in 2007, the year before the global financial crisis triggered the Great Recession. And the International Monetary Fund’s projections for 2023 suggest that Italy will still not have fully recovered from the cumulative output losses of the past decade. Among the 11 advanced economies that were hit by severe financial crises in 2007-2009, only Greece has suffered a deeper and more protracted economic depression.

Greece and Italy were the two economies carrying the highest debt burdens at the outset of the crisis (109% and 102% of GDP, respectively), leaving them poorly positioned to cope with major adverse shocks. Since the crisis erupted a decade ago, economic stagnation and costly banking weaknesses have propelled debt burdens higher still, despite a decade of exceptionally low interest rates. Greece has already faced more than one “credit event” and, while Italy has also had a couple of close calls, the spring of 2018 is turning out to be its most tumultuous episode yet. The summer will probably be worse, bringing Italy closer to a sovereign debt crisis. On the surface, general government debt appears to have stabilized since 2013, at around 130% of GDP. However, as I have stressed here and elsewhere, this “stability” is misleading.

General government debt is not the whole story for Italy, even setting aside the private debt loads and the recent renewed upturn in nonperforming bank loans (a daunting legacy of the financial crisis). When evaluating Italy’s sovereign risk, the central bank’s debts (Target2 balances) must be added to those of the general government. As the most recent available data (through March) show, these balances increase the ratio of public-sector debt to GDP by 26%. With many investors pulling out of Italian assets, capital flight in the more recent data is bound to show up as an even bigger Target2 hole. This debt, unlike pre-1999, pre-euro Italian debt, cannot be inflated away. In this regard, it is much like emerging markets’ dollar-denominated debts: it is either repaid or restructured.

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What the euro has meant for Greece and Italy: lower wages, higher unemployment and higher current account deficit.

Why The Euro Was Created (ZH)

[..] we thought it would be a good idea to remind readers why the euro exists in the first place. The briefest possible answer: to make sure the Deutsche Mark does not. As presented in the chart below – which shows the performance for each of the EU12 countries against the German DEM in every decade from the 1950s to the start of the Euro in 1999 – apart from a small revaluation of core countries in the 1990s, every country devalued to Germany in every decade between the 1950s and the start of the Euro. Said otherwise, the Deutsche Mark appreciated in value against all of its European peers for 5 consecutive decades, a condition which if left unchanged, would have led to an economic and trade crisis.

And as a bonus chart, here is same data (with the US and UK added) from the end of the Bretton Woods system in 1971 to the start of the Euro (Lira -82% devaluation to German DM) and during the 1990s (-24% devaluation) – the decade immediately leading up to the Euro start. As can be seen Italy is amongs the weakest performers relative to the German DM over these periods and showed the momentum that existed in the period leading up to the start of the Euro.

And while the fixed exchange of the Euro for European nations allowed the German export industry to go into overdrive, the lack of the possibility for an external, i.e. currency, devaluation, meant that Italy has been forced to do it all by engaging in internal devaluation, i.e., lower wages, higher unemployment and boosting its current account deficit, which however is made virtually impossible given Italy’s deteriorating demographics. This is what DB’s Jim Reid said of Italy’s potential future: Looking forward, Italy will not find it easy to grow out of its problems as its facing one of the worst set of demographics of the G20 countries. Its population size has peaked (according to the UN) and is expected to decline out to 2050. Its working age population (15-64 year olds as a proxy) is set to fall -24% over the same period and is again one of the worst placed in the G20.

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“Home sales plunged 22% in May compared to a year ago..”

Toronto’s House Price Bubble Not Fun Anymore (WS)

Housing in the Greater Toronto Area is, let’s say, retrenching. Canada’s largest housing market has seen an enormous two-decade surge in prices that culminated in utter craziness in April 2017, when the Home Price Index had skyrocketed 32% from a year earlier. But now the hangover has set in and the bubble isn’t fun anymore. Home sales plunged 22% in May compared to a year ago, to 7,834 homes, according to the Toronto Real Estate Board (TREB). It affected all types of homes, even the once red-hot condos: • Detached houses -28.5% • Semi-detached houses -29.4% • Townhouses -13.4% • Condos -15.5%.

It was particularly unpleasant at the higher end: Sales of homes costing C$1.5 million or more plummeted by 46% year-over-year to 508 homes in May 2018, according to TREB data. Compared to the April 2017 peak of 1,362 sales in that price range, sales in May collapsed by 63%. But it’s not just at the high end. At the low end too. In May, sales of homes below C$500,000 – about 68% of them were condos – fell by 36% year-over-year to 5,253 homes. The TREB publishes two types of prices – the average price and its proprietary MLS Home Price Index based on a “composite benchmark home.” Both fell in May compared to a year ago.

The average price in May for the Greater Toronto Area (GTA) fell 6.6% year-over-year to C$805,320, and is now down 12.3%, or an ear-ringing C$113,000, from the crazy peak in April 2017. There are no perfect measures of home prices in a market. Each has its own drawbacks. Average home prices can be impacted by the mix and by a few large outliers – but over the longer term, it gives a good impression of the direction. The chart below shows thepercentage change in average home prices in the GTA compared to a year earlier:

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Because the boom was a bubble.

Why Australia’s Great Banking Boom Has Ended (SMH)

It doesn’t feel all that long ago that Australian banks were the envy of the world. In March 2009, when stress-testing of US financial institutions drove the final spasm of the previous year’s credit crisis, you could have bought all the shares in Citigroup, Royal Bank of Scotland Group and Barclays with their $US8.4 trillion ($11 trillion) of gross assets for less than you’d pay for the equity of Westpac, with $US347 billion of assets. Commonwealth Bank of Australia’s share price peaked six years later just a sliver south of three times the value of its net assets, an extraordinary level in a business where price-book ratios have struggled to break above one times over the past decade.

With the current Royal Commission inquiring into practices in the country’s financial services industry and a slew of court cases, those high-flyers have come to earth with a bump. CBA on Monday agreed to pay $700 million to settle a money laundering case in which it admitted that a software update allowed about 54,000 reportable transactions to go unreported over a period of almost three years. On Friday, ANZ and local units of Deutsche Bank and Citigroup announced they were facing possible criminal cartel charges over their handling of a $2.5 billion placement of ANZ shares in 2015. Having executives hauled up before government inquiries and paying out hundreds of millions in court settlements isn’t great for headlines, but it would be a mistake to see the declines in Australia’s banking sector as purely a result of this.

When your annual net income is in the region of $10 billion, as CBA’s is, a $700 million charge is more than just a rounding error. But the 1.2 per cent jump in the company’s stock after the settlement was announced Monday is an indication that the cost is worth less to shareholders than the benefit of putting the issue firmly in the past. The greater risk to Australia’s banks lurks not in the papers of regulators and inquisitors, but on the streets of the country’s sprawling suburbs. As we’ve argued before, the most ominous indicator to watch is also a favourite one of the Reserve Bank of Australia. Rents, as measured by the Australian Bureau of Statistics, have been increasing at less than 1 per cent for nine consecutive quarters , the worst performance for the measure since the housing crash of the early 1990s.

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The spirit of Steve Jobs?!

Apple Jams Facebook’s Web-Tracking Tools (BBC)

Apple will attempt to frustrate tools used by Facebook to automatically track web users, within the next version of its iOS and Mac operating systems. “We’re shutting that down,” declared Apple’s software chief Craig Federighi, at the firm’s developers conference. He added that the web browser Safari would ask owners’ permission before allowing the social network to monitor their activity. The move is likely to add to tensions between the two companies. Apple’s chief executive Tim Cook had previously described Facebook’s practices as being an “invasion of privacy” – an opinion Facebook’s founder Mark Zuckerberg subsequently denounced as being “glib”.

At the WWDC conference – held in San Jose, California – Mr Federighi said that Facebook keeps watch over people in ways they might not be aware of. “We’ve all seen these – these like buttons, and share buttons and these comment fields. “Well it turns out these can be used to track you, whether you click on them or not.” He then pointed to an onscreen alert that asked: “Do you want to allow Facebook.com to use cookies and available data while browsing?” “You can decide to keep your information private.”

One cyber-security expert applauded the move. “Apple is making changes to the core of how the browser works – surprisingly strong changes that should enable greater privacy,” said Kevin Beaumont. “Quite often the changes companies make around privacy are small, incremental, they don’t shake the market up much. “Here Apple is allowing users to see when tracking is enabled on a website – actually being able to visually see that with a prompt is breaking new ground.”

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Building on the Ring of Fire.

A West Coast State of Mind (Jim Kunstler)

It’s only been in the last thirty years that Seattle hoisted up its tombstone cluster of several dozen office and condo towers. That’s what cities do these days to demonstrate their self-regard, and Seattle is perhaps America’s boomingest city, what with Microsoft’s and Amazon’s headquarters there — avatars of the digital economy. A megathrust earthquake there today would produce a scene that even the computer graphics artistes of Hollywood could not match for picturesque chaos. What were the city planners thinking when they signed off on those building plans?

I survived the journey through the Seattle tunnel, dogged by neurotic fantasies, and headed south to California’s Bay Area, another seismic doomer zone. For sure I am not the only casual observer who gets the doomish vibe out there on the Left Coast. Even if you are oblivious to the geology of the place, there’s plenty to suggest a sense of impossibility for business-as-usual continuing much longer. I got that end-of-an-era feeling in California traffic, specifically driving toward San Francisco on the I-80 freeway out in the suburban asteroid belt of Contra Costa County, past the sinister oil refineries of Mococo and the dormitory sprawl of Walnut Creek, Orinda, and Lafayette.

Things go on until they can’t, economist Herb Stein observed, back in the quaint old 20th century, as the USA revved up toward the final blowoff we’ve now entered. The shale oil “miracle” (so-called) has given even thoughtful adults the false impression that the California template for modern living will continue indefinitely. I’d give it less than five years now.

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Snowden deserves as much support as Assange does.

Edward Snowden: ‘The People Are Still Powerless, But Now They’re Aware’ (G.)

Edward Snowden has no regrets five years on from leaking the biggest cache of top-secret documents in history. He is wanted by the US. He is in exile in Russia. But he is satisfied with the way his revelations of mass surveillance have rocked governments, intelligence agencies and major internet companies. In a phone interview to mark the anniversary of the day the Guardian broke the story, he recalled the day his world – and that of many others around the globe – changed for good. He went to sleep in his Hong Kong hotel room and when he woke, the news that the National Security Agency had been vacuuming up the phone data of millions of Americans had been live for several hours.

Snowden knew at that moment his old life was over. “It was scary but it was liberating,” he said. “There was a sense of finality. There was no going back.” What has happened in the five years since? He is one of the most famous fugitives in the world, the subject of an Oscar-winning documentary, a Hollywood movie, and at least a dozen books. The US and UK governments, on the basis of his revelations, have faced court challenges to surveillance laws. New legislation has been passed in both countries. The internet companies, responding to a public backlash over privacy, have made encryption commonplace.

Snowden, weighing up the changes, said some privacy campaigners had expressed disappointment with how things have developed, but he did not share it. “People say nothing has changed: that there is still mass surveillance. That is not how you measure change. Look back before 2013 and look at what has happened since. Everything changed.” The most important change, he said, was public awareness. “The government and corporate sector preyed on our ignorance. But now we know. People are aware now. People are still powerless to stop it but we are trying. The revelations made the fight more even.”

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Bayer-Monsanto: “It will effectively control nearly 60% of the world’s supply of proprietary seeds, 70% of the chemicals and pesticides used to grow food, and most of the world’s GM crop genetic traits..”

Who Should Feed The World: Real People Or Faceless Multinationals? (Vidal)

Unless there is a major hiccup in the next few days, an incredibly powerful company will shortly be given a licence to dominate world farming. Following a nod from Donald Trump, powerful lobbying in Europe and a lot of political arm-twisting on several continents, the path has been cleared for Monsanto, the world’s largest seed company, to be taken over by Bayer, the second-largest pesticide group, for an estimated $66bn (£50bn). The merger has been called both a “marriage made in hell” and “an important development for food security”.

Through its many subsidiary companies and research arms, Bayer-Monsanto will have an indirect impact on every consumer and a direct one on most farmers in Britain, the EU and the US. It will effectively control nearly 60% of the world’s supply of proprietary seeds, 70% of the chemicals and pesticides used to grow food, and most of the world’s GM crop genetic traits, as well as much of the data about what farmers grow where, and the yields they get. It will be able to influence what and how most of the world’s food is grown, affecting the price and the method it is grown by. But the takeover is just the last of a trio of huge seed and pesticide company mergers.

Backed by governments, and enabled by world trade rules and intellectual property laws, Bayer-Monsanto, Dow-DuPont and ChemChina-Syngenta have been allowed to control much of the world’s supply of seeds. You might think that these mergers would alert the government, but because political parties in Britain are so inward-looking, and because most farmers in rich countries already buy their seeds from the multinationals, opposition has barely been heard.

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Mar 212018
 
 March 21, 2018  Posted by at 9:24 am Finance Tagged with: , , , , , , , , , , , ,  6 Responses »


Dirk de Herder Amstel Bridge, Amsterdam1946

 

Sign of Pending Recession? Total American Net Worth Ratio At New High (CNBC)
EU To Unveil Digital Tax Targeting Facebook, Google (AFP)
UK Tells Facebook’s Auditors Visiting Cambridge Analytica To Stand Down (CNBC)
Whatsapp Co-Founder Who Made Billions From Facebook Now Says To Delete It (MW)
The NSA Worked To “Track Down” Bitcoin Users – Snowden Documents (IC)
Bitcoin Bust Is Like Nasdaq Crash, But Faster (BBG)
German Prosecutors Launch New Enquiry Into VW Over Market Manipulation (R.)
Capitalism And The Veil Of Ignorance (Claire Connelly)
Libya: The True Face Of ‘Humanitarian Intervention’ (RT)
France’s Bird Population Collapses As Pesticides Kill Off Insects (AFP)

 

 

Net worth my ass.

Sign of Pending Recession? Total American Net Worth Ratio At New High (CNBC)

Nine years into the second-longest bull market run in history, the level of total net worth compared with income has reached a record, according to Joe LaVorgna, chief economist for the Americas at Natixis, citing Federal Reserve data. Since the Great Recession ended in June 2009, the disparity between net worth and income has soared, attributable in large part to the growth in financial assets, which have increased by $33.9 trillion, compared with $10.4 trillion in nonfinancial assets. Essentially, that means that American wallets have grown fatter from the accumulation of financial assets like stocks and mutual fund holdings than they have from gains in their homes and other physical assets like autos.

In all, total net worth of $98.75 trillion is now 6.79 times the $14.55 trillion in disposable income for households as of the fourth quarter, according to Fed financial accounts figures. That’s up from 6.71 times in the third quarter. The previous tops came in the first quarter of 2006, with 6.51, and the first quarter of 2000, at 6.12. Those two levels cast ominous signals over the U.S. economy. “A recession started four quarters from the peak of the former and eight quarters from the zenith in the latter,” LaVorgna said Tuesday in a note to clients. As a practical matter, the level should serve as a yellow flag for Fed officials, who are on a course of hiking rates gradually but steadily.

[..] The Fed is an important part of the equation in that it helped boost financial assets through historically low interest rates and an aggressive policy of monthly bond buying called quantitative easing. This is the first meeting for new Chairman Jerome Powell, who must navigate the Fed through rate increases aimed at controlling but not stopping growth. After years of mostly steady gains since the bull market run began in 2009, volatility has crept in 2018 and raised the specter that forward gains will be tougher to achieve. “Powell needs to be mindful of the current backdrop and not signal aggressive rate hikes to come,” LaVorgna said. “Otherwise, stock prices and the economy are in trouble.”

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Brussels and Facebook: they’re going to come for part of the loot of selling your data.

EU To Unveil Digital Tax Targeting Facebook, Google (AFP)

The EU will unveil proposals for a digital tax on US tech giants on Wednesday, bringing yet more turmoil to Facebook after revelations over misused data of 50 million users shocked the world. The special tax is the latest measure by the 28-nation European Union to rein in Silicon Valley giants and could further embitter the bad-tempered trade row pitting the EU against US President Donald Trump. EU Economics Affairs Commissioner Pierre Moscovici will present proposals aimed at recovering billions of euros from mainly US multinationals that shift earnings around Europe to pay lower tax rates.

The transatlantic blow has been championed by French President Emmanuel Macron and will be discussed over dinner at an EU leaders summit on Thursday. “This will be given top priority as tax file. There is a lot of political momentum on this issue,” an EU official said ahead of the announcement. The unprecedented tech tax follows major anti-trust decisions by the EU that have cost Apple and Google billions and also caught out Amazon. The commission’s tax, expected to be about 3% of sales, would affect revenue from digital advertising, paid subscriptions and the selling of personal data.

The EU tax plan will target mainly US companies with worldwide annual turnover above 750 million euros ($924 million), such as Facebook, Google, Twitter, Airbnb and Uber. Spared are smaller European start-ups that struggle to compete with them. Companies like Netflix, which depend on subscriptions, will also avoid the chop. Brussels is seeking to choke tax-avoidance strategies used by the tech giants that, although legal, deprive EU governments of billions of euros in revenue.

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Got to admit, hard to say who I’d trust least with this, Facebook or the UK deep state.

UK Tells Facebook’s Auditors Visiting Cambridge Analytica To Stand Down (CNBC)

The U.K.’s data protection watchdog ordered Facebook’s auditors to back down from a probe into a political analytics company accused of wrongly harvesting the data of millions of its users. The tech giant was planning to investigate Cambridge Analytica’s servers and systems, but the Information Commissioner’s Office told Facebook on Monday that it should withdraw from the research firm’s London premises. The ICO said it would seek to gain its own warrant to access the company’s computers and servers.

Facebook had said Monday that it was pursuing a forensic audit of Cambridge Analytica and had hired digital forensics firm Stroz Friedberg to determine whether the data analytics company still possessed Facebook user data. But in an updated statement later that day, Facebook said: “Independent forensic auditors from Stroz Friedberg were on site at Cambridge Analytica’s London office this evening. At the request of the U.K. Information Commissioner’s Office, which has announced it is pursuing a warrant to conduct its own on-site investigation, the Stroz Friedberg auditors stood down.”

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Sold his shares first?!

Whatsapp Co-Founder Who Made Billions From Facebook Now Says To Delete It (MW)

WhatsApp co-founder Brian Acton left Facebook last year. Now he’s saying others should do the same. In a tweet Tuesday, Action said: “It is time. #deletefacebook,” referencing the online movement that is gaining steam in the wake of revelations that the personal data of 50 million Facebook users was used without their permission by political data company Cambridge Analytica during the 2016 presidential campaign. He did not immediately expand on his comment. While his Facebook profile was still active for hours after his tweet, it appeared deactivated later Tuesday night.

Acton and fellow co-founder Jan Koum sold the messaging service WhatsApp to Facebook in 2014 for $22 billion. Acton received about $3 billion in the deal, and has a net worth of about $5.5 billion, according to Forbes. After staying on for three years, Acton quit Facebook in September, and is now a major backer of rival messaging service Signal, which boasts encryption to make its messages resistent to government surveillance. In February, he joined the newly launched nonprofit Signal Foundation as executive chairman, and invested $50 million into the app.

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Now connect this to the Facebook stories.

The NSA Worked To “Track Down” Bitcoin Users – Snowden Documents (IC)

Classified documents provided by whistleblower Edward Snowden show that the National Security Agency indeed worked urgently to target bitcoin users around the world — and wielded at least one mysterious source of information to “help track down senders and receivers of Bitcoins,” according to a top-secret passage in an internal NSA report dating to March 2013. The data source appears to have leveraged the NSA’s ability to harvest and analyze raw, global internet traffic while also exploiting an unnamed software program that purported to offer anonymity to users, according to other documents. Although the agency was interested in surveilling some competing cryptocurrencies, “Bitcoin is #1 priority,” a March 15, 2013 internal NSA report stated.

The documents indicate that “tracking down” bitcoin users went well beyond closely examining bitcoin’s public transaction ledger, known as the Blockchain, where users are typically referred to through anonymous identifiers; the tracking may also have involved gathering intimate details of these users’ computers. The NSA collected some bitcoin users’ password information, internet activity, and a type of unique device identification number known as a MAC address, a March 29, 2013 NSA memo suggested. In the same document, analysts also discussed tracking internet users’ internet addresses, network ports, and timestamps to identify “BITCOIN Targets.”

The agency appears to have wanted even more data: The March 29 memo raised the question of whether the data source validated its users, and suggested that the agency retained bitcoin information in a file named “Provider user full.csv.” It also suggested powerful search capabilities against bitcoin targets, hinting that the NSA may have been using its XKeyScore searching system, where the bitcoin information and wide range of other NSA data was cataloged, to enhance its information on bitcoin users. An NSA reference document indicated that the data source provided “user data such as billing information and Internet Protocol addresses.” With this sort of information in hand, putting a name to a given bitcoin user would be easy.

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One took 519 days, the other 35 days. That’s an actual compariosn?

Bitcoin Bust Is Like Nasdaq Crash, But Faster (BBG)

Bitcoin has long been compared to the dot-com bubble. Morgan Stanley says its recent moves are similar to the tech boom and bust, but on steroids. Bitcoin’s recent moves almost mirror that of the Nasdaq Composite Index in the lead-up to and aftermath of 2000, but at 15 times the speed, Morgan Stanley said. The Nasdaq climbed 278% in 519 days in the rally leading up to its high in March 2000, while Bitcoin soared 248% in 35 days in the last leg of the rally to its $19,511 high in December, according to the report. There have been three waves of weakness since Bitcoin peaked in December, with prices falling between 45% and 50% each time, before rebounding.

The Nasdaq’s bear market from 2000 had five price declines, averaging a similar 44%. The bear market also looks similar on the way up. There have been two Bitcoin bear market rallies of 43% on average, while the Nasdaq bear market rallies averaged 40%. Bear markets are nothing new for the first decentralized digital currency. Since the coin’s creation in 2009 there have been four bear markets with price declines ranging from 28% to 92%. From the December peak to the most recent low on February, Bitcoin’s price fell by 70%, “nothing out of the ordinary,” Morgan Stanley said.

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C’mon, close them down already. This movie’s getting boring.

German Prosecutors Launch New Enquiry Into VW Over Market Manipulation (R.)

German prosecutors said on Tuesday they had searched Volkswagen’s headquarters as part of a new investigation into whether the carmaker had overstated the fuel efficiency of more vehicles than previously disclosed. The news is the latest setback in the German company’s efforts to move on from a 2015 scandal in which it admitted to cheating U.S. emissions tests on diesel engines. Prosecutors from the city of Braunschweig searched 13 offices at Volkswagen’s (VW) headquarters in nearby Wolfsburg at the start of March, seizing documents and computer files that will now be reviewed, a spokesman for the prosecutor’s office said, confirming a report by German magazine WirtschaftsWoche.

They were checking a statement issued by VW on Dec. 9, 2015—about three months after its “dieselgate” scandal broke in the United States—over suspicions its contents were incorrect In that statement, VW said its own investigations found it had understated fuel consumption, and hence carbon dioxide (CO2) emissions, on no more than 36,000 vehicles. That was much lower than its preliminary estimate of around 800,000 diesel and gasoline vehicles produced five weeks earlier, which caused VW to warn it could face a 2 billion euro ($2.5 billion) hit to profits from the disclosure. VW also said in its December 2015 statement that it had found no evidence of unlawful alterations to CO2 emissions data.

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We might as well keep thinking as long as we still can.

Capitalism And The Veil Of Ignorance (Claire Connelly)

So our taxes don’t pay for spending, so what? So the government can’t run out of money. Big deal. Does that change anything? ‘We can’t afford it’ has been the proverbial comforter of opponents of the welfare state harking back to the Clinton / Blair days. Perhaps even earlier. And while it might make you feel good to believe that, it is simply untrue. This argument has been used as an emotional crutch for people who don’t want to admit that they’re comfortable with homelessness and unemployment if it keeps export prices low. Or the currency competitive. Or their bottom line stable. Ultimately, this comes down to what government is for, and what role markets should play in our lives. People are divided on this. And that is ok. Civil disagreements are a hallmark of a civilised society.

Economies and markets are complex beasts, that perform differently in different environments, under different conditions. Arguably across the duration of time, a range of potential solutions could apply at any given scenario. And the best solution is to pick and choose from a range of different economic schools of thought, and use them in combination. Unfortunately, across the world, the economists and historians that are seeking to gain greater clarity of how to do just that, by understanding the true function of economies and markets are being pushed out of universities and barred from institutions and organisations that would allow their research to come to fruition. This is not a mark of a civilised society, but corporate fascism that is actively suppressing research that threatens the dominance of late-stage capitalism.

If you feel comfortable convincing yourself that unemployment and homelessness is acceptable, if you think the fact that wages have not only stagnated but are in many countries actually going backwards somehow doesn’t affect you, that what most people earn in a lifetime will be insufficient to cover a modestly comfortable retirement should not concern you, that addressing any one of these things would be a detriment not only to your bottom line but to the economy itself, if you can justify that position without relying on arguments over deficits and balanced budgets, well, more power to you, I guess. But we should be honest about our disagreements. And our opinions should be informed by an as accurate understanding of how wealth is created as possible.

For many people, whether or not government can afford to address unemployment and social spending isn’t the issue, the question is whether it should. The argument over budgets, debt ceilings and deficits have been used as a national pacifier that would have us believe that the health of the economy and our ability to earn a living relies on a degree of human suffering. We have been convinced that the balancing of federal budgets somehow relates to our ability to put food on the table, when in fact the opposite is true. These lies have made us paranoid and competitive, where the well-being of everyone else is a direct threat to our own. It’s a pretty genius strategy, really.

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On the 15th anniversary of the invasion of Iraq.

“Libya had the highest GDP per capita and life expectancy on the continent. Less people lived below the poverty line than in the Netherlands.”

Libya: The True Face Of ‘Humanitarian Intervention’ (RT)

Seven years ago today, NATO began its “humanitarian bombing” of Libya. While “humanitarian bombing” is an oxymoron, many believe that a country is not truly advancing human rights if it’s not bombing another back to the Stone Age. As an initial matter, it must be said that while the UN had authorized a NATO fly-zone over Libya to protect civilians – all civilians, by the way – there was never authorization for the full-scale invasion which was carried out and which quickly became aimed at regime change. Therefore, the NATO operation which actually took place was illegal.

[..] the intervention was spearheaded by Hillary Clinton, Samantha Power and Susan Rice – three self-described warriors for human and women’s rights. Instead, they became three ushers of the Apocalypse. In addition, Italy and France, which also helped lead the charge for invasion, had their own reasons for intervening in Libya. For his part, French President Nicolas Sarkozy appeared to be singularly focused on killing Libyan leader Muammar Gaddafi, who allegedly gave him €50 million for his presidential campaign – a claim which was just coming to light and to which Gaddafi was the chief witness.

[..] Gaddafi had taken Libya from being the least prosperous country in Africa to the being the most prosperous by the time of the NATO operation. Thus, as one commentator explains, before the intervention, “Libya had the highest GDP per capita and life expectancy on the continent. Less people lived below the poverty line than in the Netherlands.” Moreover, one of the main reasons, we were told, that NATO needed to intervene in 2011 was to save Benghazi from imminent harm from the government forces of Gaddafi.

However, Hillary Clinton’s own internal emails show that her team recognized that any humanitarian problems confronting Benghazi had passed by the time of the NATO bombing. For example, Clinton’s assistant, Huma Abedin, in an email dated February 21, 2011 – that is, just a mere four days after the initial anti-government protests broke out in Libya – explains that the Gaddafi forces no longer controlled Benghazi and that the mood in the city was indeed “celebratory” by that time. Then, on March 2, just over two weeks before the bombing began, Harriet Spanos of USAID sent an email describing “[s]ecurity reports” which “confirm that Benghazi has been calm over the past couple of days.”

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Rhinos, insects, birds. You are next.

Bird populations in France have fallen by 33% in just 15 years.

France’s Bird Population Collapses As Pesticides Kill Off Insects (AFP)

Bird populations across the French countryside have fallen by a third over the last decade and a half, researchers have said. Dozens of species have seen their numbers decline, in some cases by two-thirds, the scientists said in a pair of studies – one national in scope and the other covering a large agricultural region in central France. “The situation is catastrophic,” said Benoit Fontaine, a conservation biologist at France’s National Museum of Natural History and co-author of one of the studies. “Our countryside is in the process of becoming a veritable desert,” he said in a communique released by the National Centre for Scientific Research (CNRS), which also contributed to the findings.

The common white throat, the ortolan bunting, the Eurasian skylark and other once-ubiquitous species have all fallen off by at least a third, according a detailed, annual census initiated at the start of the century. A migratory song bird, the meadow pipit, has declined by nearly 70%. The museum described the pace and extent of the wipe-out as “a level approaching an ecological catastrophe”. The primary culprit, researchers speculate, is the intensive use of pesticides on vast tracts of monoculture crops, especially wheat and corn. The problem is not that birds are being poisoned, but that the insects on which they depend for food have disappeared.

“There are hardly any insects left, that’s the number one problem,” said Vincent Bretagnolle, a CNRS ecologist at the Centre for Biological Studies in Chize. Recent research, he noted, has uncovered similar trends across Europe, estimating that flying insects have declined by 80%, and bird populations has dropped by more than 400m in 30 years. Despite a government plan to cut pesticide use in half by 2020, sales in France have climbed steadily, reaching more than 75,000 tonnes of active ingredient in 2014, according to EU figures. “What is really alarming, is that all the birds in an agricultural setting are declining at the same speed, even ’generalist’ birds,” which also thrive in other settings such as wooded areas, said Bretagnolle.

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