Dec 212019
 
 December 21, 2019  Posted by at 10:42 am Finance Tagged with: , , , , , , , , , , ,  9 Responses »


Unknown Butler’s dredge-boat, sunk by Confederate shell, James River, VA 1864

 

Assange Testifies In Trial Of Company That Spied On Him Inside Embassy (RT)
Former Intelligence Chiefs Fit Perfectly Into Media Advocacy Culture (Hanson)
Reindeer Games (Jim Kunstler)
It’s Time for J.J. Abrams To Be Impeached From Star Wars (Reason)
Americans Are Not ‘Free To Choose’ Anymore (Mauldin)
China’s $13 Trillion Problem Is Becoming Everyone’s (Pesek)
How Murder, Kidnappings And Miscalculation Set Off Hong Kong’s Revolt (R.)
Ryanair Will Not Refund Passengers Who Refuse To Fly On Boeing 737 Max (Ind.)
Boeing 737 MAX Production Shutdown Impacts Suppliers, Workers, Customers (F.)
Colombia Orders Uber To Cease Ride-Hailing (R.)
Now Fake Facebook Accounts Are Using Fake Faces (CNN)
How Ancient Mexican Metropolis Dodged Inequality Trap (R.)

 

 

The only coverage of Julian’s court appearance yesterday that I could find is from RT. ¿Perqué?

Assange Testifies In Trial Of Company That Spied On Him Inside Embassy (RT)

WikiLeaks founder Julian Assange briefly stepped out of maximum security prison in the UK to testify via video-link in a Spanish case against a company that spied on him inside the Ecuadorian embassy, allegedly on the US’ behalf. Assange, who is being held at Belmarsh prison in southern London pending his hearing on extradition to the US, was driven over to the Westminster Magistrates’ Court on Friday, where a video-link was set up for him to speak with a judge in Madrid. The proceedings were closed to the press on the grounds of “national security.” The High Court in Madrid is hearing Assange’s case against Undercover Global Ltd, a Spanish security company that allegedly bugged him during his stay at the Ecuadorian embassy in London.


Undercover Global was contracted to provide embassy security between 2015 and 2018, and in that capacity secretly recorded Assange’s every move via hidden cameras, microphones and electronic surveillance, the lawsuit says. Assange told the court “he was absolutely unaware that the cameras recorded audio, that hidden microphones had been introduced” into the fire extinguisher mounts inside the embassy, his attorney Aitor Martinez told reporters in Madrid after the testimony. Assange was “an absolutely passive subject of an illegitimate interference that would have been eventually coordinated by the United States,” Martinez added. If the illegal surveillance targeted Assange’s legal team and violated his attorney-client privilege, that has ramifications on the proceedings against him in both the UK and the US, his lawyers have argued.

Read more …

Rand Paul: “In the advocacy culture of our new media, ex-government officials such as Brennan, Clapper and McCabe can be paid to appear on news programs to analyze (or vindicate) their own unethical behavior.”

Former Intelligence Chiefs Fit Perfectly Into Media Advocacy Culture (Hanson)

Former FBI Director James Comey and Deputy Director Andrew McCabe, former CIA Director John Brennan and former Director of National Intelligence James Clapper have lots of things in common. One, they ran the nation’s key intelligence and investigatory agencies under former President Barack Obama. They were deeply involved in the “Russian collusion” hoax. And they participated in the surveillance of the Trump campaign and transition. Comey and McCabe both signed applications for Foreign Intelligence Surveillance Court warrants requesting surveillance on Trump campaign aide Carter Page. A report by Justice Department Inspector General Michael Horowitz criticized Comey and McCabe’s FBI for falsehoods and misrepresentations during its investigation of the Donald Trump campaign.

Clapper, Brennan and the FBI helped to disseminate the fallacious Steele dossier to the press and among government agencies. Two, Comey, McCabe, Brennan and Clapper have all lied either under oath or in the public sphere. Horowitz has said that he referred Comey for criminal prosecution for leaking classified memos he wrote about his confidential conversations with the president, but the Justice Department did not pursue charges. Comey signed FISA warrant applications that the inspector general has determined were misleading at best and at worst simply flat-out wrong. In testimony before the House Judiciary and Oversight Committees, there were 245 occasions on which Comey claimed he couldn’t remember details or couldn’t answer questions. Comey did not tell the truth when he said the Steele dossier was not the prime evidence that he submitted to the FISA court.

He also lied about when he was briefed on the dossier. McCabe was given a criminal referral for lying to federal investigators. His story about conspiring to catch Trump on tape in an effort to remove him under the 25th Amendment cannot be reconciled with the version of the account told by his apparent partner in that gambit, former Deputy Attorney General Rod Rosenstein. Brennan has on two occasions lied under oath to Congress, first about collateral deaths caused by drone strikes abroad, then about CIA spying on Senate staffers’ computers. Clapper got caught lying about the surveillance of U.S. citizens and claimed he gave the “least untruthful” answer. Both have given accounts of their knowledge of the Steele dossier that are contradicted by a number of sources. Clapper falsely claimed of the dossier that “more and more of it has been corroborated.”

Three, all four of these former intelligence chiefs detest the president of the United States. Comey has compared Trump to a Mafia don and stated that he is morally unfit to be president. McCabe, who was likewise fired from the FBI, has called Trump’s behavior “disgusting.” Clapper said that Trump may be working with Putin as a Russian “asset.” Brennan called Trump a “disgraced demagogue” as well as venal, corrupt and amoral.

Read more …

“..when does this faction finally lose its appetite for self-degradation and dishonor?”

Reindeer Games (Jim Kunstler)

Mr. Trump appears eager and avid to go to trial, where his side could call witnesses to his heart’s delight while denying the opposition any witnesses, just as the Dems did in the house. His managers could call in the Bidens, Joe and Hunter, to explain their 2014 adventures in Ukraine, and the impressive payments tendered to them — for what? The defense could compel the testimony of the rogue CIA agent, Eric Ciaramella, to explain his pretensions of whistleblowing, and also his enabler, Intel IG Michael Atkinson, who left a procedural slime-trail in his handling of the “whistleblower” ruse. They could call in the fact-witness to all that, Rep. Adam Schiff, who would excite the wonder and loathing of the nation in being forced to reveal his part in that charade and to recount the myriad falsehoods he has spawned in three years of RussiaGate chicanery — which, in a truly just world, would prompt his expulsion from the house.

They could haul in Messrs Obama, Brennan, Clapper, Comey, Mueller, Weissman, Rosenstein, McCabe, Ohr, Lynch, Strzok, Ms. Page, Ms. Yates, Mrs. Lynch, Mr. Halper — though I suspect that bunch would be better left to the ministrations of John Durham, just as the Democratic primaries roll out. A trial like that would be a rich spectacle for sure after subjecting the nation to three years of malicious, perfidious sedition. But other gusts of rumor intimate that senators on the Republican side would prefer to not open any cans of Ukrainian worms in a trial, since money laundered through the Ukrainian oligarch mills may have found its way into their pockets as well. Who knows…?

The simplest explanation for this hot mess is that Mrs. Pelosi’s team wanted desperately to just distract the country’s attention from the Horowitz report — which it pretty much failed to do — and now that she’s shot her wad with that gambit, she’s left holding a bag of meritless impeachment bullshit that will disappoint and embarrass the Resistance just as much as the Mueller investigation managed to do. Which leads to the question: when does this faction finally lose its appetite for self-degradation and dishonor?

Read more …

There you go. Put Schiff in charge.

It’s Time for J.J. Abrams To Be Impeached From Star Wars (Reason)

For the last four years, we have been living a collective nightmare. Our shared values have been undermined. Our cherished culture has come under attack. At its least harmful, this nightmare has taken the form of empty nostalgia, in which the leaders who have been entrusted with ushering us into the next era have instead looked into the past, distracting us with symbolic gestures that serve no purpose except to cover up a lack of vision. At its worst, a combination of incompetence, erraticness, and sometimes sheer malice has squandered decades of progress. The ensuing conversation has been fruitless and ugly, and the experience has left many of us polarized, angry, and exhausted.


This week, it finally started to look as if that nightmare might end—but only in the weakest and most slapdash manner. This resolution, which is not really a resolution, is not only a disaster: It’s a disappointment, a pointless, abysmal letdown that is virtually certain to fully satisfy almost no one. The result is a rushed and poorly executed product of bad management, empty thinking, and shallow wish-fulfillment that will only further the public’s loss of faith in the entire enterprise. I speak, of course, of the Star Wars franchise, which in late 2015 returned to movie theaters under the managerial oversight of Lucasfilm’s Kathleen Kennedy, with a strong creative influence from Hollywood’s reigning prince of blockbuster mediocrity, J.J. Abrams.

Read more …

Close to what I recently wrote on capitalism and free markets, but from a professional investor point of view. Problem is, what does John Mauldin mean when he says “socialism”? Everyone means something different. That also makes polls on socialism suspect.

Americans Are Not ‘Free To Choose’ Anymore (Mauldin)

When you write for a wide audience, no matter what you say, or how carefully you say it, some people will misunderstand. Sometimes it’s amusing. Reading through my feedback (and I do read all of it), I get called both heartless capitalist and bleeding-heart socialist in reaction to the same article. In fact, I’m neither. I am a capitalist, and proudly so. I believe free markets are the best way to bring maximum prosperity and peace for everyone. But I’m not heartless, nor do I think markets are perfect. Even the best medicines can have serious side effects. That is doubly so when you aren’t taking the medicine correctly. I also don’t think the word capitalism means what we think it means, at least those of us of a certain age.

Take a look at the data from an interview Charles Payne did with David Bahnsen on Fox Business a few weeks ago. Asked if they favor capitalism or socialism, 49% of Millennials favored socialism. But if you ask if they favor big business or “free enterprise,” the numbers change significantly. In the future, I intend to substitute “free market” for capitalism where possible. Capitalism, at least the free market version, can’t work without competition. It motivates producers to offer the best products at the lowest prices, and lets consumers choose whatever best fits their needs. Yet instead of encouraging and protecting competition, the US government increasingly suppresses it. Last February I wrote about a then-new book, The Myth of Capitalism, by old friend Jonathan Tepper and Denise Hearn. They aren’t leftists at all. They respect classical capitalism and want it to work better than it is.

Here’s a quick snippet from the book. “Free to Choose” sounds great. Yet Americans are not free to choose. In industry after industry, they can only purchase from local monopolies or oligopolies that can tacitly collude. The US now has many industries with only three or four competitors controlling entire markets. Since the early 1980s, market concentration has increased severely. We’ve already described the airline industry. Here are other examples: • Two corporations control 90 percent of the beer Americans drink. • Five banks control about half of the nation’s banking assets. ª Many states have health insurance markets where the top two insurers have an 80 percent to 90 percent market share. For example, in Alabama one company, Blue Cross Blue Shield, has an 84% market share and in Hawaii it has 65% market share.


Getty

Read more …

Just like America’s.

China’s $13 Trillion Problem Is Becoming Everyone’s (Pesek)

China’s Xi Jinping probably tops any list of people who can’t wait to see the back of 2019. These last 12 months produced the slowest mainland growth since the early 1990s, the biggest pro-democracy protests in Hong Kong’s history and mounting criticism of Beijing’s human rights record. By taking such an authoritarian stance, Taiwan has slipped further away from Beijing’s grip, while some political wags questioned whether Communist Party members were losing faith in President Xi’s governing style. But Xi has an even bigger challenge on his hands, and not just Donald Trump’s trade war antics. Make that 13 trillion challenges.

This figure refers to the size, in U.S. dollar terms, of China’s onshore bond market. And generally, its growth and development have long been touted as a vital rite of passage for the second-biggest economic power. The trouble with debt markets, though, is they tend to expose cracks in financial systems. Herein lies Xi’s biggest problem. Keeping growth north of 6% is reasonably easy for a command economy. Even amid the trade war, Xi’s party can order up giant infrastructure projects, slash taxes and cajole local governments to ramp up fiscal stimulus. It has its own ATM—the People’s Bank of China.

Trouble is, the more you borrow, the more investors can push back and the more even the most authoritarian of governments can lose control as punters vote with their feet. That risk is increasing along with a recent jump in private-sector debt defaults to a record high. According to Fitch, 4.9% of private companies missed bond payments from January to November, up from 4.2% for all of 2018. When you combine state and private companies, China Inc.’s onshore defaults risks are growing apace—from none a few years back to at least $18 billion so far this year. There’s an obvious caveat here. We can only discuss the default risks we know about—the ones regulators in Beijing cop to, not those that are being papered over with public assistance.

Signs of stress are also emerging in the offshore debt market. So are this year, there have been at least $75 billion defaults. With well over $200 billion of debt maturing over the next 24 months, Standard and Poor’s warns of increasing missed payments episodes. This trajectory collides with U.S. President Trump’s trade war. Ignore all that excitement over Trump’s “phase one” deal with Xi. It’s a polite ceasefire than won’t hold. With Trump getting zero from Xi in terms of re-ordering U.S.-China trade dynamics and facing the risk of removal from office, the odds of him lashing out anew at Asia are growing, not waning. It means that Xi’s annus horribilis won’t end even as calendars switch to 2020. The year ahead may very well be the one in which China’s debt troubles supersede all else.

Read more …

Very long, certainly for Reuters. But useful background.

How Murder, Kidnappings And Miscalculation Set Off Hong Kong’s Revolt (R.)

Hong Kong leader Carrie Lam says the plan that ignited the revolt in her city was born of a straightforward quest for justice. While on a trip to Taiwan, a Hong Kong man strangled his Hong Kong girlfriend, then returned home and confessed. The city lacked an extradition pact with Taiwan, and Lam argued the only way to send him back for trial was new laws that also would enable sending criminal suspects to mainland China. She dismissed fears about the proposal – which would mean Hong Kong residents could face trial in China’s Communist Party-controlled courts – and pushed ahead. As protests raged this summer, even in private Lam kept to her story that she, not Beijing, was the prime mover, driven by “compassion” for the young victim’s devastated parents.

“This is not something instructed, coerced by the central government,” she told a room of Hong Kong businesspeople at a talk in August. A Reuters examination has found a far more complicated story. Officials in Beijing first began pushing for an extradition law two decades ago. This pressure to extend the arm of Chinese law into Hong Kong’s independent British-style legal system intensified in 2017, a year before the slaying and two years before Lam’s administration announced its extradition bill. The impetus came from the Central Commission for Discipline Inspection (CCDI), the Communist Party’s powerful internal anti-corruption body, which has been spearheading Chinese President Xi Jinping’s mass anti-graft campaign.

Xi’s crackdown spilled over dramatically into the streets of Hong Kong in the early hours of January 27, 2017. Among the targets of CCDI investigators at the time, two mainland Chinese officials with knowledge of the probe told Reuters, was a Chinese billionaire living in the city named Xiao Jianhua. A businessman with close ties to China’s political elite, Xiao was abducted that morning from his serviced apartment at the luxury Four Seasons Hotel. Unidentified captors whisked him out the entrance in a wheelchair with his head covered, a witness told Reuters.

The sensational kidnapping, widely reported at the time, was assumed by most people in this city of 7.5 million to have been the work of Chinese agents; Beijing has never commented publicly on the matter. Frustrated at the lack of legal means to get their hands on Xiao, the two Chinese officials told Reuters, the CCDI that same year began pressing mainland officials in charge of Hong Kong affairs about the urgent need for an extradition arrangement. The CCDI wanted a less politically damaging method than kidnapping for snaring fugitive mainlanders in Hong Kong, the officials said. The two sides failed to strike a deal, but the killing in Taiwan would provide a new opening.

Read more …

People book Ryanair 6-8 weeks before the flight, but planes are assigned less than 24 hours before.

Ryanair Will Not Refund Passengers Who Refuse To Fly On Boeing 737 Max (Ind.)

As Boeing winds down production of the 737 Max aircraft, the Ryanair boss has said passengers will “love them” when the planes are finally flying again. Michael O’Leary, chief executive of Europe’s biggest budget airline, has ordered 210 of a special version of the Max, seating eight extra passengers. None has so far been delivered, as the Boeing jet is grounded worldwide. The no-fly stipulation was declared worldwide after a second crash involving the Boeing 737 Max. [..] Boeing had initially predicted that software fixes would enable the 737 Max to be flying by the end of 2019. But as that hope faded, airlines have gradually removed it from the schedules in early 2020.


Michael O’Leary told The Independent: “As every day passes, it keeps moving backwards. “We originally hoped we’d get 30 aircraft for the summer, then it was 20, now it’s only 10. “If there really is more, another one month’s delay, it looks much more likely we will get zero aircraft in advance of the June-July-August summer peak.” But when the Boeing 737 Max is flying for Ryanair, anxious passengers who do not wish to travel on it will have no advance warning. “You won’t know, because on average you book seats on Ryanair six to eight weeks in advance of travel,” said Mr O’Leary. “We only do the aircraft allocations the night before, because we don’t know which aircraft is where. “During the first year, you’ll have a 10 per cent chance you’ll be on a Max aircraft. “Will anyone know or care? Frankly, I don’t think they will.”

Read more …

The airlines will demand compensation. But what about the crews, who work far fewer hours and lose wages?

Boeing 737 MAX Production Shutdown Impacts Suppliers, Workers, Customers (F.)

The effluence of Boeing’s long-avoided decision, announced Monday, to halt production of 737 MAX aircraft until the plane is recertified for service has begun rolling downhill, causing the biggest third-party supplier to the program to suspend production of MAX fuselages. Spirit AeroSystems, a former division of Boeing based in Wichita, Kansas, said today it will stop making MAX fuselages – effectively the body of the plane, excluding its small nose cone and large tail section – effective Jan. 1. That’s the same day Boeing will stop building MAX planes, about 400 of which currently are finished but undeliverable and parked on ramps, unused taxiways and even employees’ parking lots at Boeing facilities.

Meanwhile, United Airlines, which had to park 14 MAX planes and stop taking delivery of others nine months ago when the Federal Aviation Administration took away the MAX’s certification, said today that it has pushed back plans to bring the MAX back into its schedule all the way to June 4. Most recently it had been targeting an April restart of MAX flying. But continued delays in getting the plane recertified by the FAA (and ultimately by the aviation safety regulators of other nations) has made it very difficult for airlines to predict when they’ll be able to fly MAX planes once again. United has the smallest batch of MAX planes in its fleet of the three U.S. carriers that have bought the newest, and significantly re-designed version of the venerable 50-year-old 737 line.

Southwest had 34 copies of the MAX when the grounding took place, while American had 24. All three carriers also have large orders for more MAX planes and have been unable to add them to their fleets since March, reducing their ability to retire older planes or to grow their fleet size. That reduced growth opportunity has affected the airlines’ abilities to grow their revenue and profits as planned, and has increased their costs somewhat by forcing them to underuse the pilots, flight attendants and other employees who were expected to staff the now-grounded MAX planes.

[..] leaders of the Transport Worker Union unit that represents Southwest’s 17,00 flight attendants today released a letter they sent this week to Southwest president Gary Kelly and vice president of inflight operations Sonya Lacore. The union leaders asked for additional help in addressing the “financial toal” on flight attendants whose pay has been reduced significantly while the MAX planes have been idled. The MAX groundings have left Southwest with more flight attendants on the payroll that it need. But rather than lay off hundreds of them and incur huge costs for retraining and re-scheduling attendants who’d be displaced by the resulting wave of seniority displacements, Southwest has retained all those extra attendants. But that means many attendants now are being assigned fewer flight hours, which diminishes their earnings.

Read more …

Are Colombia’s laws that much different from other countries?

Colombia Orders Uber To Cease Ride-Hailing (R.)

Colombia on Friday ordered Uber to cease its ride-hailing operations in the Andean country, effective immediately, after a judge ruled the company violated competition rules. Following a lawsuit filed against Uber by COTECH SA, the Superintendency of Industry and Commerce (SIC) said the U.S. company had breached market rules. Uber has more than 2.3 million active users in Colombia and around 88,000 driver partners. The app, however, has existed in a regulatory no-man’s land in Colombia. The Technology Ministry deems ride-hailing apps legal while transport authorities say they are against the law.


In a statement the SIC said Uber generated “a significant advantage in the market” by rendering transport services for individuals via its application. The SIC said that following analysis, it ordered Uber’s ride-hailing services “through the use of the Uber application to cease immediately.” The order applies to Uber, Uber X and Uber VAN. Uber said in a statement that it rejects the ruling and immediately appealed it. “This decision reflects an act of censorship and infringes on the Inter American Convention on Human Rights, which has already condemned attempts to block Uber for violating the neutrality of the web, liberty of expression and freedom of internet,” Uber said in a statement.

Read more …

Interesting, but since this is CNN, they blame Russia China, not America. A deepfake group that spends $10 million on Facebook ads sounds like a professional campaign.

Now Fake Facebook Accounts Are Using Fake Faces (CNN)

Artificially-generated faces of people who don’t exist are being used to front fake Facebook (FB) accounts in an attempt to trick users and game the company’s systems, the social media network said Friday. Experts who reviewed the accounts say it is the first time they have seen fake images like this being used at scale as part of a single social media campaign. The accounts, which were removed by Facebook on Friday, were part of a network that generally posted in support of President Trump and against the Chinese government, experts who reviewed the accounts said. Many of the accounts promoted links to a Facebook page and website called “The BL.” Facebook said the accounts were tied to the US-based Epoch Media Group, which owns The Epoch Times newspaper, a paper tied to the Falun Gong movement that is similarly pro-Trump.

The publisher of the Epoch Times denied that Epoch and The BL were linked in emails to the fact-checking organization Snopes earlier this year. The dystopian revelation of the use of artificially-generated images in this way points to an increasingly complicated online information landscape as America enters a presidential election year. Silicon Valley and the US intelligence community are still struggling with the fallout from widespread online interference in the 2016 presidential election. The Facebook accounts used profile pictures that appeared to show real people smiling and looking directly into a camera. But the people do not and have never existed, according to Facebook and other researchers. The images were created using artificial intelligence technology.

The same basic methods are used to produce deepfake videos — fake videos that the US intelligence community has warned could be used as part of a foreign disinformation campaign targeting Americans. [..] In all, Facebook said Friday, it had removed a network of 610 Facebook accounts, 89 pages, 90 groups, and 72 Instagram accounts. About 55 million accounts followed one or more of the pages, and the vast majority of followers were outside the United States, Facebook said. Facebook did not say if all of all these followers were real — some of them may themselves have been fake accounts. The network of pages removed on Friday had spent almost $10 million on Facebook ads, according to Facebook.

Read more …

It’s a question of organization.

How Ancient Mexican Metropolis Dodged Inequality Trap (R.)

Fragments of pre-Aztec murals recently unearthed on the outskirts of what was once the largest city of the Americas are adding to mounting evidence that even commoners there enjoyed the finer things in life. Each year, millions of tourists visit the towering pyramids and temples of the sprawling metropolis of Teotihuacan, far from the latest discoveries on the city’s southern edge. “We’re now finding that life on the periphery was pretty good,” said Boston University archeologist David Carballo, who discovered brightly-colored paintings over fine stucco on three buildings he began excavating there in July.

Decorated with flowers and birds that appear to be singing, the murals evoking a paradise found nearly three kilometers (2 miles) from Teotihuacan’s core came as a complete surprise, he said. Carballo and his team have also found other signs of wealth nearby, including jade, a finely carved stone mask, and shells from Mexico’s Pacific and Gulf coasts. The unpublished mural discoveries point to the radically different path charted by Teotihuacan, which thrived from about 100 B.C. to 550 A.D., compared to other ancient civilizations. At a time when daily life in the biggest contemporary Mayan cities, or ancient Rome and Egypt, was marked by a tiny elite lording over impoverished or enslaved masses, most of Teotihuacan’s estimated 100,000 inhabitants fared far better.

[..] In the city’s La Ventilla district, another aspect of Teotihuacan’s egalitarian character comes into view: stone, multi-family apartment compounds where over 90% of Teotihuacanos lived. Off limits to tourists despite extremely rare glyphs painted on a plaza, the narrow streets of La Ventilla’s residential compounds suggest a densely-packed urban existence. The compounds boast white lime-plaster floors, built-in drainage systems, open-air courtyards and murals. Lying 48 km northeast of Mexico City, Teotihuacan has more than 2,000 such compounds, thanks to a century-long building boom that ended around 350 A.D.

Read more …

 

 

 

Please put the Automatic Earth on your Christmas charity list. Support us on Paypal and Patreon.

Top of the page, left and right sidebars. Thank you.

 

 

 

Nov 222019
 
 November 22, 2019  Posted by at 2:24 pm Finance Tagged with: , , , , , , , , , , , , ,  20 Responses »


Claude Monet O Rio 1881

 

Jeremy Corbyn’s Labour party presented a big plan yesterday which, as the Guardian ever so subtly put it, “would mean the UK having a bigger state than Germany”. My first reaction to it is that this is inevitable. My second reaction is that it is also too early.

After decades of being squeezed by both the Tories and Tony Blair’s “New” Labour, both the British themselves, and their economy, are so parched that they will vote for something like Corbyn’s plan at some point. Unavoidable. The same on all counts I think is true for Bernie Sanders’ plans.

The wealthier classes don’t appear to be smart enough to understand that they can’t take it all, that they have to leave something for everybody else. But there’s no brake on such currents, they all get carried away, it happens all the time. One side takes too much, and the other side fights back.

Still, while what leads to Corbyn and Sanders rising may be the same, the reasons they fail to attract enough votes is different. In the US, people start shouting: socialism, communism, or maoism, leninism, stalinism, and that will do. These words are fully interchangeable for 99.9% of Americans. If there are 3 of them left that know the difference, you’re lucky.

The reason Sanders is popular is to a large extent that his Democrat competitors are so godawful. For Corbyn, there are other factors in play. But first, a bit about that plan:

Jeremy Corbyn Urges Public To Vote For ‘Manifesto Of Hope’

Jeremy Corbyn has urged the public to vote for his “manifesto of hope” as he unveiled plans for the most dramatic increase in tax and spending in more than half a century if Labour wins power next month’s general election. In an upbeat launch event at Birmingham City University, the Labour leader said he welcomed the hostility of the billionaires, bad bosses and dodgy landlords who would lose out from his policies. Experts were taken aback by the scale of Labour’s spending plans, which dwarfed the substantial increase in the size of the state envisaged in the party’s 2017 manifesto.

“See this [2019] manifesto and vote for the person who’s struggling who you don’t even know,” Corbyn urged the public, adding: “How can any government claim it cares about our country when it cares so little about the people who live here?” With Labour still trailing significantly behind the Conservatives in the polls, party strategists hope the manifesto will help to tempt wavering voters. Corbyn said it was “full of popular policies that the political establishment has blocked for a generation”. The slim red volume, titled It’s Time for Real Change, included a number of fresh announcements, in addition to the policies announced earlier in the campaign. Key plans include:

• Universal free broadband, delivered by part-nationalising BT and paid for with a tax on tech companies.
• An immediate 5% pay rise for public sector workers, plus above-inflation increases for future years.
• 100,000 new council houses a year by the end of the parliament.
• 1 million new jobs as part of a “green industrial revolution”.
• Nationalisation of rail, water and mail, and new powers to allow councils to take control of bus services.

Corbyn promised an “investment blitz”, which he said would leave no part of the country untouched, and suggested the deindustrialisation that begun in the 1980s would be reversed. “Margaret Thatcher’s government wiped out huge swathes of Britain’s industry. We will rebuild it, as green industry,” he said. Torsten Bell, the director of the Resolution Foundation thinktank, said: “This spending increase would be comparable to the first Wilson government and would mean the UK having a bigger state than Germany.”

As the graph shows, the “giant state” idea is not what it’s made out to be, compared to many countries. So on the face of it, what’s not to like for the impoverished millions in Britain? The answer is easy: there has been a large campaign of people perpetuating whole-cloth out of thin air accusations about Corbyn being an anti-semite, including from his own party (Tony Blair and his ilk).

Sure enough, the Brexit campaigners have gone through an entire litany of outrageous claims and promises, but it’s the anti-semite smear that looks likely to decide not only the December 12 elections, but also the Brexit matter. Yeah, that is deplorable. But it’s the time we live in. Some memes are funny, others are seriously misleading, and many strongly influence people’s way of thinking.

In the US, it’s enough to say that Bernie is a socialist or a leninist, in Britain you need a somewhat stronger and bigger cannon. Anti-semitism in just the thing. What makes these smears and/or memes so effective is repetition. At some point people think: I’ve seen this from ten different sources now, that means it must be true. And social media are all about endless repetition, which makes them perfect for the job.

 

That is of course also how they got to Julian Assange. A rape allegation was all it took. And then they waited 9 years to declare it false, by which point he had been silenced, drawn and quartered. Same mechanism. Jeremy Corbyn is no anti-semite, anymore than Julian Assange is a rapist, but that makes no difference whatsoever.

If you manage to plant the seed of an idea, no matter how ridiculous, in enough people’s heads, and then you make sure it’s repeated every day, you can today make anyone believe anything. Perhaps it’s time to re-label “social” media. Really, social? But the term “mass media” has already been taken.

 

And though many people will not be ready to acknowledge it, what goes for Corbyn and Assange also goes for Donald Trump. Only in his case the old mass media have been much more massively involved, not just the new not-so-terribly social media. But that principle is identical: plant an idea in people’s heads and repeat it ad nauseam.

In Trump’s case, it’s been so successful that entire media organizations that were about to croak were revived by it, at least financially. At this point it’s probably good to illuminate the role intelligence agencies play in the entire meme/smear ‘politics’. They are all over it, they hardly even attempt to hide their roles.

In the cases of Assange and Corbyn, there have been no large-scale investigations. In Corbyn’s case, none at all, and in Assange’s case, probes hidden from view that would not stand any legal daylight, in Sweden, the UK and the US. These investigations always seem directed at ‘affirming the accusers’ case, not at finding if the accused are actually guilty of what they are charged with.

As for Trump, we have of course lived through years of Mueller’s probe, which ended in nothing, seamlessly transitioning into Ukrainegate, in which another stream of potential accusers saw the limelight to provide their particular version of what “hearsay” means in legalese.

I’ve remarked before that Adam Schiff’s little theater wouldn have been throw out of a court in one second flat, because there is no proof and hearsay is inadmissible. I also think Corbyn should have taken one of his many accusers to court, simply to have a judge or jury state publicly that he is not a -proven- anti-semite. Assange obviously was never allowed any such route.

And if you looked and listened closely at the Ukrainegate spectacle, it was clear that the Mueller disaster has not closed the RussiaRussia meme/smear. Russia wants to conquer Europe. The president wanting to direct his own foreign policy was anathema for the “regular channel” crowd. “We have this thing that works beautifully”. And it ain’t the Constitution.

 

What Trump has going for him is that IG Michael Horowitz and Special Counsel John Durham are set to release their respective reports on how Russiagate came about. It looks as if they will have to do without any info of Burisma or its links to the Bidens, because the “regular channel” has frustrated efforts into finding out their roles, but then that was never their probes’ concern.

We now have the first allegation against an FBI lawyer for tampering with FISA documents, through the unusual leakage stream of CNN, which happens to employ lots of ex-FBI people. There is no doubt that we’ll see a whole lot more where that came from. It’ll be an entertaining holiday season, because of course the FBI and CIA will want to (pre-emptively) strike back. And they’re all working at CNN et al.

Their problem is they’ve been working this for years now, and came up zilch. The other side is just getting started. Looks like there’ll be more fireworks than candlelight dinners going into 2020. But perhaps it would still be a good idea for Bill Barr to find himself a good meme or smear, just to be sure.

 

 

Please support the Automatic Earth on Paypal and Patreon so we can continue to publish.

Top of the page, left and right sidebars. Thank you.

 

 

 

Jun 242019
 


Pablo Picasso Sleeping girl 1935

 

Free Money Socialism (Henrich)
Iran Goes For “Maximum Counter-Pressure” (Escobar)
Facebook’s Libra Cryptocurrency ‘Poses Risks To Global Banking’ -BIS (G.)
Google’s Chrome Web Browser “Has Become Spy Software” (ZH)
Austerity, Inequality Fuelling Mental Illness – Top UN Envoy (G.)
Republicans Don’t Understand Democrats – and Vice Versa (Atl.)
400 Pilots Sue Boeing In Class Action Over 737 MAX Cover-Up (ABC.au)
How Wall Street Colonized the Caribbean (BR)
Blow To Turkey’s Erdogan As Opposition Wins Big In Istanbul (R.)
Turkey Warns EU Not To Interfere On Cyprus EEZ Issue (K.)
Greek Armed Forces On Standby For Turkish Moves In East Med, Aegean (K.)

 

 

Very close to what I’ve been saying.

Free Money Socialism (Henrich)

According to Jay Powell the Fed’s primary mission is now to “sustain the economic expansion.” I’ve never used the term “manipulation” before, but let’s just be clear what “sustain the economic expansion” really means: To prevent natural market forces from taking hold. That’s manipulation. Business cycles are natural. They serve a purpose, they lay the foundation for new growth, they weed out the excess, they permit for a reset of an aging expansion, for a renewed flourishing of innovation, new solutions, creativity, and yes growth. Of course because of all this recessions bring about temporary pain, but nobody wants pain anymore, and hence central bankers with hero magazine covers have now taken on a new role, that of preventing a recession altogether.

No more cleansing, no more resets, but only ever more excess and propagating the notion that they alone can prevent the cleansing process from taking place with their favorite and only method: Free Money. Oh yes, the free money whores are here again. Hurry back into stocks: “Now, interest rates are coming down en masse. Investors who adjusted their portfolios for a high-rate environment must readjust. That means leaning into growth stocks again, scouring Asia for opportunities, and earning income from investments that won’t succumb to the low-rate trend and will also hold up in a shaky economy”. Barron’s calls the Fed flip flop “graceful”. I call it disgraceful.

Just stop. It’s 2019, wealth inequality is higher than ever, corporate debt is higher than ever, and growth is slowing. Innovation is hampered by a system that has benefitted the few which have grown into bloated monopolies, and the entire system itself remains held afloat by massive and ever more expending debt. After all there is zero intellectual integrity to anything that is being propagated. In recent times Fed chairs have bemoaned rising wealth inequality, oh how un-American it all is, and rising corporate debt being a threat to the economy, but then they proceed to again exacerbate both by promising more easy money, their default solution in the misguided attempt to bail investors out from all pain and any bad decisions.

Read more …

“The key in the analysis is what is called notional. They are so far out of the money that they are said to mean nothing. But in a crisis the notional can become real.”

Iran Goes For “Maximum Counter-Pressure” (Escobar)

The facts are stark. Tehran simply won’t accept all-out economic war lying down – prevented to export the oil that protects its economic survival. The Strait of Hormuz question has been officially addressed. Now it’s time for the derivatives. Presenting detailed derivatives analysis plus military analysis to global media would force the media pack, mostly Western, to go to Warren Buffett to see if it is true. And it is true. Soleimani, according to this scenario, should say as much and recommend that the media go talk to Warren Buffett. The extent of a possible derivatives crisis is an uber-taboo theme for the Washington consensus institutions. According to one of my American banking sources, the most accurate figure – $1.2 quadrillion – comes from a Swiss banker, off the record.

He should know; the Bank of International Settlements (BIS) – the central bank of central banks – is in Basle. The key point is it doesn’t matter how the Strait of Hormuz is blocked. It could be a false flag. Or it could be because the Iranian government feels it’s going to be attacked and then sinks a cargo ship or two. What matters is the final result; any blocking of the energy flow will lead the price of oil to reach $200 a barrel, $500 or even, according to some Goldman Sachs projections, $1,000. Another US banking source explains; “The key in the analysis is what is called notional. They are so far out of the money that they are said to mean nothing.

But in a crisis the notional can become real. For example, if I buy a call for a million barrels of oil at $300 a barrel, my cost will not be very great as it is thought to be inconceivable that the price will go that high. That is notional. But if the Strait is closed, that can become a stupendous figure.” BIS will only commit, officially, to indicate the total notional amount outstanding for contracts in derivatives markers is an estimated $542.4 trillion. But this is just an estimate. The banking source adds, “Even here it is the notional that has meaning. Huge amounts are interest rate derivatives. Most are notional but if oil goes to a thousand dollars a barrel, then this will affect interest rates if 45% of the world’s GDP is oil. This is what is called in business a contingent liability.”

Read more …

“If even modestly successful, Libra would hand over much of the control of monetary policy from central banks to these private companies.”

Facebook’s Libra Cryptocurrency ‘Poses Risks To Global Banking’ -BIS (G.)

Facebook’s plan to operate its own digital currency poses risks to the international banking system that should trigger a speedy response from global policymakers, according to the organisation that represents the world’s central banks. Although the move of big tech firms such as Facebook, Amazon and Alibaba into financial services could speed up transactions and cut costs, especially in developing world countries, it could also undermine the stability of a banking system that has only just recovered from the crash of 2008. Echoing warnings from many tech experts, the Bank for International Settlements (BIS) said that while there were potential benefits to be made, the adoption of digital currencies outside the current financial system could reduce competition and create data privacy issues.

“The aim should be to respond to big techs’ entry into financial services so as to benefit from the gains while limiting the risks,” said Hyun Song Shin, economic adviser and head of research at BIS. “Public policy needs to build on a more comprehensive approach that draws on financial regulation, competition policy and data privacy regulation.” The warning from the BIS on Sunday comes only days after Facebook announced it would launch its own digital currency, Libra, in 2020. It will allow its billions of users to make financial transactions across the globe in a move that could potentially shake up the world’s banking system.

Chris Hughes, a co-founder of Facebook, last week added his voice to concerns being expressed over big tech’s move into finance, warning that Libra could shift power into the wrong hands. Hughes, who is co-chair of the Economic Security Project, an anti-poverty campaign group, said: “If even modestly successful, Libra would hand over much of the control of monetary policy from central banks to these private companies. If global regulators don’t act now, it could very soon be too late.”

Read more …

Very easy for a government to counter. Should make one suspicious as to why they don’t.

Google’s Chrome Web Browser “Has Become Spy Software” (ZH)

Google’s Chrome is essentially spy software according to Washington Post tech columnist Geoffrey Fowler, who spent a week analyzing the popular browser and concluded that it “looks a lot like surveillance software.” Fowler has since switched to Mozilla’s Firefox because of its default privacy settings, and says that it was easier than one might imagine.

“My tests of Chrome vs. Firefox unearthed a personal data caper of absurd proportions. In a week of Web surfing on my desktop, I discovered 11,189 requests for tracker “cookies” that Chrome would have ushered right onto my computer but were automatically blocked by Firefox. These little files are the hooks that data firms, including Google itself, use to follow what websites you visit so they can build profiles of your interests, income and personality. Chrome welcomed trackers even at websites you would think would be private. I watched Aetna and the Federal Student Aid website set cookies for Facebook and Google. They surreptitiously told the data giants every time I pulled up the insurance and loan service’s log-in pages.

And that’s not the half of it.= Look in the upper right corner of your Chrome browser. See a picture or a name in the circle? If so, you’re logged in to the browser, and Google might be tapping into your Web activity to target ads. Don’t recall signing in? I didn’t, either. Chrome recently started doing that automatically when you use Gmail. -Washington Post”

Read more …

Iceland?!

Austerity, Inequality Fuelling Mental Illness – Top UN Envoy (G.)

Austerity, inequality and job insecurity are bad for mental health and governments should counteract them if they want to face up to the rising prevalence of mental illness, the UN’s top health envoy has said. In an exclusive interview with the Guardian to coincide with a hard-hitting report to be delivered to the UN in Geneva on Monday, Dr Dainius Puras said measures to address inequality and discrimination would be far more effective in combatting mental illness than the emphasis over the past 30 years on medication and therapy. “This would be the best ‘vaccine’ against mental illness and would be much better than the excessive use of psychotropic medication which is happening,” said Puras, who as the UN’s special rapporteur on health reports back to the UN human rights council in Geneva.

He said that since the 2008 financial crisis, policies that accentuated division, inequality and social isolation have been bad for mental equilibrium. “Austerity measures did not contribute positively to good mental health,” he said. “People feel insecure, they feel anxious, they do not enjoy good emotional wellbeing because of this insecurity situation.” “The best way to invest in the mental health of individuals is to create a supportive environment in all settings, family, the workplace. Then of course [therapeutic] services are needed, but they should not be based on an excessive biomedical model.”

Puras said there had been an overemphasis on trying to cure mental illness like physical illness, through “good medicine”, without thinking about the social factors that cause or contribute to some mental disorders. The prescription of psychotropic drugs to deal with mental illness, particularly antidepressants, has soared across the developed world in the past 20 years.

Read more …

What do Americans understand these days?

Republicans Don’t Understand Democrats – and Vice Versa (Atl.)

Unfortunately, the “Perception Gap” study suggests that neither the media nor the universities are likely to remedy Americans’ inability to hear one another: It found that the best educated and most politically interested Americans are more likely to vilify their political adversaries than their less educated, less tuned-in peers. Americans who rarely or never follow the news are surprisingly good at estimating the views of people with whom they disagree. On average, they misjudge the preferences of political adversaries by less than 10 percent. Those who follow the news most of the time, by contrast, are terrible at understanding their adversaries. On average, they believe that the share of their political adversaries who endorse extreme views is about 30 percent higher than it is in reality.


Perhaps because institutions of higher learning tend to be dominated by liberals, Republicans who have gone to college are not more likely to caricature their ideological adversaries than those who dropped out of high school. But among Democrats, education seems to make the problem much worse. Democrats who have a high-school degree suffer from a greater perception gap than those who don’t. Democrats who went to college harbor greater misunderstandings than those who didn’t. And those with a postgrad degree have a way more skewed view of Republicans than anybody else. It is deeply worrying that Americans now have so little understanding of their political adversaries. It is downright disturbing that the very institutions that ought to help us become better informed may actually be deepening our mutual incomprehension.

Read more …

And that’s just in one airline.

400 Pilots Sue Boeing In Class Action Over 737 MAX Cover-Up (ABC.au)

More than 400 pilots have joined a class action against American plane manufacturer Boeing, seeking damages in the millions over what they allege was the company’s “unprecedented cover-up” of the “known design flaws” of the latest edition of its top-selling jet, the 737 MAX. Boeing’s 737 MAX series— first announced in 2011 and put to service in 2017 — is the fourth generation of its 737 aircraft, a widely popular narrow-body aircraft model that has been a mainstay of short-haul aircraft routes across the globe. By March 2019, the entire global fleet was suspended by a US presidential decree, following the second fatal crash involving a 737 MAX that killed 157 people in Ethiopia.

The first crash involving the 737 MAX jet happened off the coast of Indonesia in October 2018, killing 189 people. In the time since the two fatal crashes, some of the families of the 346 people killed have sought compensation, while aircraft carriers — such as Norwegian Air — have sought compensation from the American manufacturer for lost revenue as a result of the plane’s global ban. This latest lawsuit filed against Boeing marks the first class action lodged by pilots qualified to fly the 737 MAX series, who have alleged that Boeing’s decisions have caused them to suffer from monetary loss and mental distress since the jet’s suspension.

The originating plaintiff, known as Pilot X —who has chosen to remain anonymous for “fear of reprisal from Boeing and discrimination from Boeing customers” — lodged the statement of claim on Friday, which seeks damages for them and more than 400 colleagues who work for the same airline. In court documents seen by the ABC, the claim alleges that Boeing “engaged in an unprecedented cover-up of the known design flaws of the MAX, which predictably resulted in the crashes of two MAX aircraft and subsequent grounding of all MAX aircraft worldwide.” They argue that they “suffer and continue to suffer significant lost wages, among other economic and non-economic damages” since the fleet’s global grounding. The class action will be heard in a Chicago court, with a hearing date set for October 21, 2019.

Read more …

History lesson” “The Caribbean archipelago was ground zero for U.S. imperial banking.”

How Wall Street Colonized the Caribbean (BR)

Scrubbed from the pages of glossy coffeetable books, the history of U.S. imperialism can be found in the archives of Wall Street’s oldest, largest, and most powerful institutions. A deep dive into the vaults and ledgers of banking houses such as Citigroup, Inc., and J. P. Morgan Chase and Co. reveals a story of capitalism and empire whose narrative is not of morally pure and inspiring economic growth, technological innovation, market expansion, and shareholder accumulation, but rather of blood and labor, stolen sovereignty and pilfered resources, military occupation and monetary control. Sugar comingles with blood, chain gangs cross spur lines, and the magical abstractions of finance are found vulgarized in the base manifestations of racial capitalism.

This history of bankers and empire is also a Caribbean history. The Caribbean archipelago was ground zero for U.S. imperial banking. Wall Street’s first experiments in internationalism occurred in Cuba, Haiti, Panama, Puerto Rico, the Dominican Republic, and Nicaragua, often with disastrous results—for those countries and colonies, and often for the imperial banks themselves. Yet where there was expansion, there was also pushback. The internationalization of Wall Street was met with local resistance, refusal and revolt. And just as the history of imperialism has been excised from popular narratives, so too has this history of Caribbean anti-imperialism and autonomy. The history of imperial banking and racial capitalism begins at the end of the nineteenth century, at the historical horizon where the project of U.S. settler colonialism that spurred the financing of the West became the enterprise of U.S. territorial colonialism in the Caribbean and Asia.

Buoyed by unprecedented wealth and boosted by the expansionist jingoism following the victory over Spain in the Caribbean and the Pacific, New York City’s bankers and merchants believed that the organization of an imperial banking system—one that could compete with Europe’s long-established institutions—was critical to the global rise of the city and to the consolidation of Wall Street’s position in international finance, trade, and commerce. With these ambitions, bankers and business-people set their sights on asserting control over the trade and finance of the Americas. They sought to control local central banks, establish U.S. branch banks, take over commodity financing, reorganize monetary systems on a dollar basis, and refinance European-funded sovereign debt.

Read more …

He’s losing it. Beware. Next move will be to suggest Turkey’s under threat, call for patriotism.

Blow To Turkey’s Erdogan As Opposition Wins Big In Istanbul (R.)

Turkey’s opposition has dealt President Tayyip Erdogan a stinging blow by winning control of Istanbul in a re-run mayoral election, breaking his aura of invincibility and delivering a message from voters unhappy over his policies. Ekrem Imamoglu of the Republican People’s Party (CHP) secured 54.21% of votes, according to state-owned Anadolu news agency – a far wider victory margin than his narrow win three months ago. The previous result was annulled after protests from Erdogan’s Islamist-rooted AK Party, which said there had been widespread voting irregularities. The decision to re-run the vote was criticized by Western allies and caused uproar among domestic opponents who said Turkey’s democracy was under threat.


On Sunday, tens of thousands of Imamoglu supporters celebrated in the streets of Istanbul after the former businessman triumphed over Erdogan’s handpicked candidate by almost 800,000 votes. “In this city today, you have fixed democracy. Thank you Istanbul,” Imamoglu told supporters who made heart signs with their hands, in an expression of the inclusive election rhetoric that has been the hallmark of his campaigning. “We came to embrace everyone,” Imamoglu said. “We will build democracy in this city, we will build justice. In this beautiful city, I promise, we will build the future.”

Read more …

The EU has no choice anymore.

Turkey Warns EU Not To Interfere On Cyprus EEZ Issue (K.)

Turkey has warned the European Union that any intervention on their part on the issue of Cyprus’ Exclusive Economic Zone (EEZ) would negatively affect relations between Greece and Turkey, as well as any prospects for an end to the occupation of the northern part of Cyprus. The warning was made through a non-paper sent to 27 of the EU’s 28 member-states on June 16, Cyprus’ “Fileleftheros” newspaper reports. Turkey didn’t send the note to Cyprus, whose government it does not recognize. The non-paper says the EU would be wise not to act as a judge in the dispute on sea borders and that a similar stance would further discourage efforts to solve the “Cyprus problem” and would cause Greek-Turkish relations to deteriorate.


Turkey claims that the area where one of its drillships has begun exploring for oil and natural gas, soon to be joined by a second, is within Turkey’s continental shelf and that no islands, Cyprus included, can constitute a “full” EEZ. Turkey repeats its views on “equal rights” between Greek- and Turkish-Cypriots, that-is, between the internationally-recognized Republic of Cyprus and the Turkish-occupied north of the island, which Turkey alone has recognized as the “Turkish Republic of Northern Cyprus” and says the best solution is the appointment of a mixed commission with representatives of both sides. Failing that, Turkey says, it is determined to protect the rights of the Turkish-Cypriot resources in the area. The non-paper ends with the hope that, in the decisions to be taken by the EU, “common sense” will prevail.

Read more …

Greece will not give in.

Greek Armed Forces On Standby For Turkish Moves In East Med, Aegean (K.)

As Turkey continues with its provocative behavior in the Eastern Mediterranean, despite European Union calls for it to desist from drilling for oil in Cyprus’ exclusive economic zone (EEZ), Greece’s armed forces are on standby to deal with a possible escalation of tensions in the East Med or the Aegean, Kathimerini understands. According to sources, the key question being pondered in Athens is how to react in the event that Turkey decides to conduct seismic research or drilling within Greece’s continental shelf or its EEZ. The biggest concern is about a potential Turkish intervention east of Rhodes and south of Kastellorizo.

On the political level, Athens has done what it can, underlining the potential repercussions of Turkey’s provocative behavior on stability in the broader region. The statement by the EU last week, though vague, was welcomed by Prime Minister Alexis Tsipras as “the first clear and decisive” condemnation of Turkey by the bloc “after decades of violations of international law.” On the operational level, however, it is less clear what Greece’s response should be. The country’s armed forces will be on high alert over the summer as defense officials prepare a series of plans to deal with a possible Turkish intervention. The plans are primarily based on Hellenic Navy maneuvers, as Turkey is currently using research ships and drilling vessels to entrench its presence in the region.

However, the Hellenic Air Force would likely play a supportive role in any response. Asked last week whether Greece can count on military support from the EU or the United States in the event of an incident, Defense Minister Evangelos Apostolakis told reporters that Greece will have to plan to deal with such a scenario independently. “There is no such promise, nor any such issue at the moment, but as I’ve said before, when we need to do something we expect that we will basically be alone.” Athens also holds little faith in promises by French President Emmanuel Macron to send French Navy ships to the Aegean if necessary, as such pledges have been made in the past.

Read more …

 

 

 

 

 

Apr 242019
 


Giovanni Bellini Pietà 1474

 

Bipolar Markets in the “New Mediocre” (Roubini)
Fed Key Interest Rate Keeps Climbing, That Could Become A Problem (CNBC)
Cut the Price and They Will Come: US New Home Prices At Dec. 2014 Level (WS)
Chinese Banks Are Running Out Of Dollars (ZH)
Hillary Outlines “Roadmap” To Trump Impeachment (ZH)
The Conspiracy Against Trump (Giraldi)
Theresa May Accuses Labour Of Dragging Its Heels In Brexit Talks (Ind.)
Labour Says Theresa May Unwilling To Offer Key Brexit Concessions (G.)
UK MPs Campaign To Have Donald Trump’s State Visit Cancelled (G.)
The Revelations of WikiLeaks: No. 1 (CN)

 

 

Who will be the first in the world of finance to understand what’s going on AND be honest about it? It won’t be Roubini. Nothing has anything to do with recession or trade risks anymore. It’s the Fed and the Fed only. And there are no investors as long as the Fed monopolizes what were once markets. These so-called investors are in reality a bunch of rich socialists waiting for a central bank to hand them money. They’ll also be the first to warn about the dangers of socialism.

Bipolar Markets in the “New Mediocre” (Roubini)

Financial markets tend to undergo manic-depressive cycles, and this has been especially true in recent years. During risk-ons, investors – driven by “animal spirits” – produce bull markets, frothiness, and sometimes outright bubbles; eventually, however, they overreact to some negative shock by becoming too pessimistic, shedding risk, and forcing a correction or bear market. Whereas prices of US and global equities rose sharply throughout 2017, markets began to wobble in 2018, and became fully depressed in the last quarter of the year. This risk-off reflected concerns about a global recession, Sino-American trade tensions, and the Federal Reserve’s signals that it would continue to raise interest rates and pursue quantitative tightening.

But since this past January, markets have rallied, so much so that some senior asset managers now foresee a market “melt-up” (the opposite of a meltdown), with equities continuing to rise sharply above their current elevated levels. One could argue that this latest risk-on cycle will continue for the rest of the year. For starters, growth is stabilizing in China, owing to another round of macroeconomic stimulus there, easing fears of a hard landing. And the United States and China may soon reach a deal to prevent the ongoing trade war from escalating further.

At the same time, US and global growth are expected to strengthen somewhat in the second half of the year, and the disruption of a “hard Brexit” has been averted, with the European Union extending the deadline for the United Kingdom’s departure to October 31, 2019. As for the eurozone’s prospects, much will depend on Germany, where growth could rebound as global headwinds fade. Moreover, central banks, particularly the Fed, have become super-dovish again, and this appears to have reversed the tightening of financial conditions that produced the risk-off in late 2018.

Read more …

They are well on their way towards blowing up the entire US economy. Just like their counterparts in Japan, Europe, China. Will Russia be the last one standing?

Fed Key Interest Rate Keeps Climbing, That Could Become A Problem (CNBC)

The Federal Reserve’s benchmark interest rate has inched up to its highest level in 11 years even though the central bank has sent a clear message that it is done tightening policy indefinitely. In recent days, the effective fed funds rate, which targets the overnight level that banks charge each other for loans, has moved up to 2.44%. That’s the highest since March 2008 and is just 6 basis points from the top of the target range and the closest to the top since December, when the Fed last raised rates. For now, the move is looked on as not being especially problematic given that there is still room between the current level and the top of the 2.25% to 2.5% range in which the rate is supposed to trade.


But moves toward the upper end of the band have prompted action before, and the trend likely will be a topic of discussion at next week’s Federal Open Market Committee meeting. When the Fed first began raising rates in December 2015, it succeeded in keeping the funds rate around the midpoint of the target range. But that has changed over the past year. “At 6 basis points from the top of the range, you’re still within the target. The question becomes whether they think technical pressure is driving this,” said Lou Crandall, chief economist at Wrightson ICAP and formerly of the New York Fed. “The only concern is whether you’ll have to make a technical adjustment in the future from preventing it from going higher.”

Read more …

Fed to the rescue! Actually, as long as banks write new loans, the Fed can and will hold back.

Cut the Price and They Will Come: US New Home Prices At Dec. 2014 Level (WS)

Home builders, the ultimate pros in the housing market, have figured out something after the malaise in the second half last year: Cut prices and buyers will come. The median selling price of new houses dropped 9.7% in March from March last year to $302,700, the Commerce Department reported this morning. This took the price back to about where it had first been in December 2014 ($301,500):

Homebuilders are motivated to move their speculative inventory. They’re making deals at lower prices, and they’re building homes at lower price points. And buyers responded. House sales at the lower end gained market share while houses at the higher end lost market share. Houses that were sold below $200,000 made up 16% of the mix in March, up from 11% in March 2018. Houses that were sold at prices of $400,000 or higher in March made up 29% of the mix, down from 32% in March 2018. This shift in the market, and the price cuts by homebuilders, has pushed the median new house price down 11.8% from the peak in December 2017. The year-over-year price drops starting in November last year were the sharpest such drops since Housing Bust 1:

The new-house sales data, produced jointly by the Census Bureau and the Department of Housing and Urban Development, is volatile. It is revised in the following months, often quite drastically. But after a while, the trends become clear. For the long-term view: The median price of new houses ballooned by about 55% from the range in 2011 and 2012 to the peak in December 2017 ($343,300). This peak had exceeded by 31% the crazy peak of Housing Bubble 1 in March 2007. When it comes to price, the sky is not the limit:

Read more …

Give ’em a swap line.

Chinese Banks Are Running Out Of Dollars (ZH)

Following the biggest quarterly credit injection in Chinese history, it is safe to say that China’s banks are flush with yuan loans. However, when it comes to dollar-denominated assets, it’s a different story entirely. As the WSJ points out, in the past few years, a funding problem has emerged for China’s biggest commercial banks, one which is largely outside of Beijing’s control: they’re running low on US dollars so critical to fund operations both domestically and abroad. As shown in the chart below, the combined dollar liabilities at China’s four biggest commercial banks exceeded their dollar assets at the end of 2018, a sharp reversal from just a few years ago.

Back in 2013, the four together had around $125 billion more dollar assets than liabilities, but now they owe more dollars to creditors and customers than are owed to them. The reversal is the result of just one bank: Bank of China, which for many years held more net assets in dollars than any other Chinese lender, ended 2018 owing $72 billion more in dollar liabilities than it booked in dollar assets. The other “top 3” lenders finished the year with more dollar assets than liabilities, even though their net dollar surplus has shrunk substantially in the past five years.

And yet, as everything else with China, there is more than meets the eye: as the WSJ reports looking at Bank of China’s annual report, the bank’s asset-liability imbalance is more than addressed by dollar funding that doesn’t sit on its balance sheet. Instruments like currency swaps and forwards are accounted for elsewhere. This is reminiscent of the shady operations discussed recently involving Turkey’s FX reserves, where the central bank has been borrowing dollar assets from local banks via off balance sheet swaps, which it then used to prop up and boost the lira at a time of aggressive selling of the local currency. It is safe to assume that the PBOC has been engaging in a similar operation.

Read more …

Hmmm. Hillary says: “You don’t put impeachment on the table as the only item on the table and say you’re going to get there no matter what.

But as I said yesterday, that is precisely what Nadler appears to do: “I do think, if proven – which hasn’t been proven yet – if proven, some of this would be impeachable, yes,” Nadler said..”

At best awfully close.

Hillary Outlines “Roadmap” To Trump Impeachment (ZH)

Just hours after Nancy Pelosi attempted to mend the gaping division between the realists and the extremists in her party, failed presidential candidate Hillary Clinton decided to pile into the impeachment debate with her own take on the Mueller Report. “Well, I think what Nancy means, and I agree with what she means, is that it shouldn’t be a preordained conclusion, it shouldn’t be what you do for partisan, political purposes almost outside the framework of the Constitution,” she said during an appearance at the Time 100 Summit in New York. “You don’t put impeachment on the table as the only item on the table and say you’re going to get there no matter what, which is what happened in ’99. Instead, you say we are going to proceed with the seriousness that this demands.”

Dripping with irony, Clinton – whose husband was impeached by the House of Representatives in 1998 for perjury and obstruction of justice (only to be acquitted the following year by the Senate), and allegedly used her position to gain personal wealth through pay-to-play peddling of her and her husband’s influence – discuss the roadmap to President Trump’s impeachment and said he should have been indicted. “I have a kind of weird personal history about impeachment,” Clinton said to laughter from the audience. But, “not what you’re thinking,” she added, referring to her time as a staff attorney serving on the impeachment inquiry for former President Richard Nixon two decades earlier in 1974.

“I was one of the young lawyers who actually drafted the memo about what is a high crime and misdemeanor, and it was truly meant by our founders to describe actions that undermine the integrity of our government that placed the personal or political interest in a president over the interest of the nation,” she said.

Read more …

It makes no difference where you stand on the issue(s), this is what you will have to deal with going forward. First off, the Horowitz report next month: “he intends to make criminal referrals as a result of his investigation.”

The Conspiracy Against Trump (Giraldi)

Whether the Mueller report is definitive very much depends on the people they chose to interview and the questions they chose to ask, which is something that will no doubt be discussed for the next year if not longer. Beyond declaring that the Trump team did not collude with Russia, it cast little light on the possible Deep State role in attempting to vilify Trump and his associates. The investigation of that aspect of the 2016 campaign and the possible prosecutions of former senior government officials that might be a consequence of the investigation will likely be entertaining conspiracy theorists well into 2020. Since Russiagate has already been used and discarded the new inquiry might well be dubbed Trumpgate.

The media has scarcely reported how Michael Horowitz, the Inspector General of the Department of Justice (DOJ), has been looking into the activities of the principal promoters of the Russiagate fraud. Horowitz, whose report is expected in about a month, has already revealed that he intends to make criminal referrals as a result of his investigation. While the report will only cover malfeasance in the Department of Justice, which includes the FBI, the names of intelligence officers involved will no doubt also surface. It is expected that there will be charges leading to many prosecutions and one can hope for jail time for those individuals who corruptly betrayed their oath to the United States Constitution to pursue a political vendetta.

A review of what is already known about the plot against Trump is revealing and no doubt much more will be learned if and when investigators go through emails and phone records. The first phase of the illegal investigation of the Trump associates involved initiating wiretaps without any probable cause. This eventually involved six government intelligence and law enforcement agencies that formed a de facto task force headed by the CIA’s Director John Brennan. Also reportedly involved were the FBI’s James Comey, Director of National Intelligence James Clapper, Attorney General Loretta Lynch, Department of Homeland Security Director Jeh Johnson, and Admiral Michael Rogers who headed the National Security Agency.

Brennan was the key to the operation because the Foreign Intelligence Surveillance Act (FISA) court refused to approve several requests by the FBI to initiate taps on Trump associates and Trump Tower as there was no probable cause to do so but the British and other European intelligence services were legally able to intercept communications linked to American sources. Brennan was able to use his connections with those foreign intelligence agencies, primarily the British GCHQ, to make it look like the concerns about Trump were coming from friendly and allied countries and therefore had to be responded to as part of routine intelligence sharing. As a result, Paul Manafort, Carter Page, Donald Trump Jr., Jared Kushner and Gen. Michael Flynn were all wiretapped. And likely there were others. This all happened during the primaries and after Trump became the GOP nominee.

Read more …

I don’t see any common ground here that could lead to a solution. The country’s split right down the middle.

Theresa May Accuses Labour Of Dragging Its Heels In Brexit Talks (Ind.)

Theresa May has accused Labour of dragging its heels in the bid to find a cross-party compromise to deliver Brexit, even before the talks resumed after Easter. “The discussions with Labour have been serious but had also been difficult in some areas, such as in relation to the timetable for the negotiations,” the prime minister told her cabinet. No 10 fears Jeremy Corbyn does not share Ms May’s desire to avoid next month’s European parliament elections – which would require an agreement within days. The criticism is striking because it is the first time the government has turned on Labour since approaching the opposition three weeks ago.


Until now, it has been Mr Corbyn’s party that has blamed the prime minister for the lack of progress, accusing her of refusing to shift on her red lines – in particular, membership of a customs union. The cabinet discussion took place even before the talks resumed on Tuesday afternoon – but after a failure to hold any meaningful negotiations last week. Ms May’s spokesman told journalists: “The PM said the discussions with Labour had been serious, but had also been difficult in some areas, such as in relation to the timetable for the negotiations. “The PM said that the government’s position was that progress needed to be made urgently as it was vital to deliver on the result of the referendum and for the UK to leave the European Union as soon as possible.”

Read more …

They knew that before agreeing to the talks.

Labour Says Theresa May Unwilling To Offer Key Brexit Concessions (G.)

Labour has accused Theresa May of failing to offer any substantive changes to her Brexit deal in cross-party talks, as Downing Street’s hopes of a breakthrough in time to avoid taking part in European parliamentary elections waned. Brexit talks resumed on Tuesday between a team of ministers and shadow ministers. But Labour sources said the government team again appeared unwilling to countenance changes to the political declaration, which sets out the UK’s future relationship with the EU. Instead, ministers offered alternative ways of giving reassurance about the issues Labour has raised, such as on environmental standards and workers’ rights, including through redrafting the withdrawal act implementation bill (WAB) and tweaking separate planned government bills.


Downing Street continues to insist that it hopes to secure parliamentary ratification of a Brexit deal in time to avoid the UK having to participate in next month’s European parliament elections. The government has been considering tabling the WAB as a way of breaking the Brexit deadlock, but Labour has rejected the idea. “There’s a sequence; you have got to start with a different deal,” said a source. After the talks, Jeremy Corbyn blamed the government’s refusal to compromise on central issues such as membership of a customs union for the failure to make significant progress. “We’ll continue putting our case but quite honestly there’s got to be change in the government’s approach. They cannot keep on just regurgitating what has already been emphatically rejected three times by parliament, there’s got to be a change,” Corbyn said.

Read more …

They should get Theresa May and Boris Johnson cancelled. Hypocrites.

UK MPs Campaign To Have Donald Trump’s State Visit Cancelled (G.)

Theresa May has been criticised for allowing Donald Trump to make a state visit in June for D-day commemorations, with MPs orchestrating a campaign to stop the US president addressing parliament. Labour said it “beggars belief” that the government is offering the red-carpet treatment to Trump given his attacks on British and American values. Backbenchers began gathering signatures for a petition aiming to force the cancellation of the trip. The three-day trip starting on 3 June was confirmed by Buckingham Palace and the White House on Tuesday. The initial invitation was extended soon after Trump took office but a planned state visit in 2018, with all its pomp and ceremony, was downgraded to an official visit amid security concerns.


This time, Trump is likely to dine with the Queen, attend discussions with May in Downing Street and join an event in Portsmouth to mark the D-day landings. No 10 said the D-day event would be “one of the greatest British military spectacles in recent history” and would include a flypast of 26 types of RAF aircraft and at least 11 Royal Navy ships in the Solent. May said the visit would emphasise that the UK and US “have a deep and enduring partnership that is rooted in our common history and shared interests”. “We do more together than any two nations in the world and we are both safer and more prosperous because of our cooperation,” May said. “The state visit is an opportunity to strengthen our already close relationship in areas such as trade, investment, security and defence, and to discuss how we can build on these ties in the years ahead.”

Read more …

Promises to be a good series. But who will pay attention?

The Revelations of WikiLeaks: No. 1 (CN)

WikiLeaks was founded in 2006, but it was the April 5, 2010, publication of “Collateral Murder” that made the whistleblower-publisher a world-wide phenomenon, attracting admirers and enemies. WikiLeaks wrote of the film: “The video, shot from an Apache helicopter gun-sight, clearly shows the unprovoked slaying of a wounded Reuters employee and his rescuers. Two young children involved in the rescue were also seriously wounded.” WikiLeaks noted that Reuters had unsuccessfully attempted to gain access to the video through the Freedom of Information Act in the years after the strike. The day after the release of the footage, The New York Times described WikiLeaks as a once-fringe website that had moved into the big time.

“The site has become a thorn in the side of authorities in the United States and abroad,” it said. “With the Iraq attack video, the clearinghouse for sensitive documents is edging closer toward a form of investigative journalism and to advocacy.” Before 2010 WikiLeaks received a few high-profile journalism awards. But in the years since the publication of the video, it has received a slew of honors, including The Sam Adams Award for Integrity. On April 16, WikiLeaks announced a fresh award for its founder, Julian Assange, even as he remains isolated in a London prison. “Collateral Murder” was one of the most prominent releases sourced from then-Army intelligence analyst Chelsea Manning, who served seven years in a military prison as a result.

Manning, who had access to the video, having a Top Secret clearance, first offered the video to The New York Times and The Washington Post, which both turned her down. Manning then turned to WikiLeaks. Manning described the events that led up to her decision to submit the footage to the press in leaked audio of her testimony during her 2013 court-martial. She said Reuters’ inability to get the footage via a freedom-of-information request contributed to her decision to leak it. “The most alarming aspect of the video for me, was the seemingly delight of bloodlust they [the pilots] appeared to have. They dehumanized the individuals they were engaging with, and seemed to not value human life in referring to them as ‘dead bastards,’ and congratulating each other on the ability to kill in large numbers.”

Marjorie Cohn, a legal analyst, is one of those who has described the contents of the footage as evidence of U.S. war crimes. As such she argues that Manning was legally obligated to expose such information. In a 2013 column for Truthout, she cites the Geneva Conventions, the Army Field Manual and the Uniform Code of Military Justice as all setting forth the duty of a service member to disobey unlawful orders. None of the pilots, military officials nor policy-makers have ever been charged or otherwise held responsible for the events shown in the video.

Read more …

 

 

Mar 042019
 


Robert Frank London 1951-52

 

US, China Said To Appear Close To Deal To Roll Back Tariffs (R.)
Beijing To Encourage ‘Shadow’ Lending To Boost Growth – China Economist (CNBC)
Beijing Locked Down For China’s Greatest Political Spectacle (G.)
Huawei: Meng Wanzhou Sues Canadian Government Over Arrest (AP)
May Accused Of £1.6bn Brexit ‘Bribe’ Over New Fund For Deprived Towns (Ind.)
Russia Tells US It Is Ready For Bilateral Talks On Venezuela (R.)
Roger Stone Suggests In Instagram Post Robert Mueller ‘Framed’ Him (CNBC)
Donald Trump Facing Major New Investigation Into ‘Abuse Of Power’ (Ind.)
America’s Trust In Mainstream Media Hits Rock Bottom (SCF)
Trump Blames Timing Of Cohen Testimony For Collapse Of Kim Jong-Un Summit (G.)
US Voters Overwhelmingly Reject “Socialists” And Candidates “Over 75” (ZH)
Carpocalypse Now: We’re In The Endgame For Cars (BI)
Toxic Agrochemicals And Regulators’ Collusion With Industry (OffG)
Endangered Fruit Bats ‘Being Driven To Extinction’ In Mauritius (Ind.)

 

 

Can’t wait to see the details

US, China Said To Appear Close To Deal To Roll Back Tariffs (R.)

The United States and China appear close to a deal that would roll back U.S. tariffs on at least $200 billion worth of Chinese goods, as Beijing makes pledges on structural economic changes and eliminates retaliatory tariffs on U.S. goods, a source briefed on negotiations said on Sunday. U.S. President Donald Trump and Chinese President Xi Jinping could seal a formal trade deal at a summit around March 27 given progress in talks between the two countries, the Wall Street Journal reported on Sunday. In an eight-month trade war, the United States has imposed punitive tariffs on $250 billion worth of imports from China, while Beijing has hit back with tariffs on $110 billion worth of U.S. goods, including soybeans and other commodities.

The actions have roiled financial markets, disrupted manufacturing supply chains and reduced U.S. farm exports. Trump administration officials have said they expect the two presidents to “close” a deal at a summit in coming weeks at Trump’s Mar-a-Lago estate in Florida. The source briefed on the talks said that no dates for a summit had been determined, but that Beijing had reserved a 10-day window from around March 20 for a possible summit. Many details still needed to be worked out, including the terms of an enforcement mechanism to ensure that Beijing follows through on pledges to make changes to policies to better protect U.S. intellectual property, end forced technology transfers and curb industrial subsidies.

Another source familiar with the talks said that Washington and Beijing were close to agreement on non-enforcement issues, including China’s pledges to increase purchases of farm, energy and manufactured products, as well as six agreements on structural policy changes.

Read more …

Xiang Songzuo is the same economist who is December said Chinese GDP growth was just 1.67%. But openly saying that Xi is selling his soul to the shadows is quite the statement again. How’s that linked to the tariffs deal?

Beijing To Encourage ‘Shadow’ Lending To Boost Growth – China Economist (CNBC)

After tamping down on shadow banking in the last few years, China will now likely encourage such lending to boost economic growth, a Chinese economist told CNBC on Monday ahead of the country’s annual parliamentary session. “The top agenda of (the) NPC this year is to design policies to prevent further decline (of growth rate),” said Xiang Songzuo, professor at Renmin University in Beijing, referring to the National People’s Congress, which kicks off on Tuesday. “I think this year, regulators will encourage more shadow banking financing, particularly to the private sector,” said Xiang, who was previously a deputy director at the People’s Bank of China and chief economist at the Agricultural Bank of China.

Shadow banking refers to activities performed by financial firms outside the formal banking sector, and therefore subject to lower levels of regulatory oversight and higher risks. According to Xiang, Chinese officials have moved from talking about cutting debt to stabilizing the economy. China’s GDP target last year was around 6.5%. Sources have told Reuters that Beijing will likely set a growth target of between 6.0 to 6.5% in 2019. Shadow banking is “coming back,” Xiang said. In addition to spending more on infrastructure, Beijing will also need to stimulate the economy through lending, particularly to the private sector, he added. [..] Beijing will need to tread a tightrope as it faces the dilemma of what increased shadow lending could bring, said Xiang. “On the one hand, they need shadow banking to finance investment; but on the other hand, they (need to) try to control the potential risks,” he added.

Read more …

Orwell lives!

Beijing Locked Down For China’s Greatest Political Spectacle (G.)

China’s largest political event of the year, a meeting of legislative delegates and political advisers known as the “two sessions”, gets under way this week and comes at a time when Chinese leader Xi Jinping faces one of the most challenging periods since coming to power. Thousands of delegates will descend on the Great Hall of the People in Beijing while authorities go into overdrive to prevent any semblance of dissent during the two weeks of meetings of the 3,000-strong National People’s Congress (NPC) , and the Chinese People’s Political Consultative Conference (CPPCC), an advisory body. Xi faces public scrutiny against the backdrop of a slowing Chinese economy, a bruising trade war with the US, heightened international concern over Chinese tech firm Huawei, and growing global criticism over Chinese policies in Xinjiang.

[..] Debate among delegates, scholars, and political observers will be even more constrained this year. Notices ahead of the meeting instruct party members on the “right way to build the party” banning over-the-top praise of the party as well as criticism. “People can’t talk normally, and now even this kind of expression is forbidden. It shows this is a very sensitive period,” said Zhang Lifan, a historian based in Beijing who follows elite Chinese politics. “I’m afraid party committees have taken many preventive measures, to prevent any sensitive speech that can lead to a chaos during the meeting.” He believes discussion of economic issues and the trade war are inevitable. “I think there will still be some ways of talking about the political system, not in direct ways, but using the economy,” he said.

Read more …

This will hurt Canada much more than the US.

Huawei: Meng Wanzhou Sues Canadian Government Over Arrest (AP)

Meng Wanzhou, the chief financial officer of Chinese technology company Huawei, is suing the Canadian government, its border agency and the national police force over her high-profile detention. Meng claims they detained, searched and interrogated her before telling her she was under arrest. Lawyers for Meng said on Sunday they had filed a notice of civil claim in the British Columbia supreme court. Canada arrested Meng, the daughter of Huawei’s founder, at the request of the US on 1 December at Vancouver airport. US prosecutors will accuse her of misleading banks about the company’s business dealings in Iran. Meng’s lawsuit alleges that instead of immediately arresting her, authorities interrogated her “under the guise of a routine customs” examination and used the opportunity to “compel her to provide evidence and information”.

The suit also claims Canada Border Service Agency agents seized her electronic devices, obtained passwords and unlawfully viewed the contents and intentionally failed to adviser her of the true reasons for her detention. The suit said only after three hours was she told she was under arrest and had right to counsel. “This case concerns a deliberate and pre-meditated effort on the part of the defendant officers to obtain evidence and information from the plaintiff in a manner which they knew constituted serious violations of the plaintiff’s rights,” the claim says. Meng has been released on bail and is living in Vancouver awaiting extradition proceedings.

Read more …

25 days. Desperation creeps in. May is bribing Labour MPs.

May Accused Of £1.6bn Brexit ‘Bribe’ Over New Fund For Deprived Towns (Ind.)

The government has been accused of “bribing” MPs to back Theresa May‘s Brexit deal after announcing a new £1.6bn fund to help deprived towns. The “Stronger Towns Fund“ will offer investment to places that have not benefited from economic growth as much as other parts of the country, ministers said. The government said the money would be used to create jobs, train local people and boost investment, but critics said it was an attempt to convince Labour MPs in Leave-voting areas to back Ms May’s withdrawal agreement, and was not enough to offset the impact of Brexit. £1bn of the funding will be allocated to areas across the country, with more than half going to towns in the north of England. The other £600m will be available for local authorities to bid for.

Of the money being directly allocated by the government, the north west will receive the most, with £281m, followed by the west Midlands (£212m) and Yorkshire and the Humber (£197m). Announcing the fund, Ms May said: ”For too long in our country prosperity has been unfairly spread. Our economy has worked well for some places but we want it to work for all communities. “Communities across the country voted for Brexit as an expression of their desire to see change – that must be a change for the better, with more opportunity and greater control. “These towns have a glorious heritage, huge potential and, with the right help, a bright future ahead of them.”

Read more …

Doubt that Bolton is interested.

Russia Tells US It Is Ready For Bilateral Talks On Venezuela (R.)

Russia is ready to take part in bilateral talks with the United States over the issue of Venezuela, Russia’s foreign minister told his U.S. counterpart late on Saturday. The situation in Venezuela was the main topic in a phone call between Foreign Minister Sergei Lavrov and U.S. Secretary of State Mike Pompeo that took place on March 2, Russia’s foreign ministry said on its website. “In connection with Washington’s proposal to hold bilateral consultations on the Venezuelan topic, it was stated that Russia is ready to participate in this,” the ministry said in a statement.

It was “vital to be strictly guided by the principles of the UN Charter since only the Venezuelan people have the right to determine their future,” the statement said. Russia and the United States have been at loggerheads over a U.S.-led campaign for international recognition of Juan Guaido, the Venezuelan opposition leader who declared himself the interim head of state, over President Nicholas Maduro. In the phone call, initiated by the United States, Lavrov condemned the threats that Washington made towards “the country’s lawful leadership,” the ministry said, referring to Maduro.

Read more …

You can’t put Stone under quasi house arrest and expect him to be quiet. He’ll end up doing crazy stuff.

Roger Stone Suggests In Instagram Post Robert Mueller ‘Framed’ Him (CNBC)

Roger Stone on Sunday suggested he has been “framed” by special counsel Robert Mueller in an Instagram post that appeared to run afoul of a judge’s barely week-old gag order barring President Donald Trump’s longtime friend from criticizing the prosecutors in the criminal case against him. Stone deleted the only image in that multi-image post that included “Who framed Roger Stone” language shortly after CNBC emailed his lawyer to ask about it. Stone’s post was put online less than 48 hours after the judge, Amy Berman Jackson, ordered lawyers for the admitted Republican “dirty trickster” to explain why they did not tell her earlier about the planned publication of a book by Stone that could violate her gag order on him.

Stone announced on Instagram in January that he was coming out with the book, “The Myth of Russian Collusion: The Inside Story of How Trump Really Won.” In her gag order in U.S District Court in Washington, D.C., Jackson barred Stone from “making statements to the media or in public settings about the Special Counsel’s investigation or this case or any of the participants in the investigation or the case.” The gag extends to “posts on Facebook, Twitter, Instagram or any other form of social media.” If Stone violates the order, Jackson could order him jailed without bail until his trial.

Stone’s new post is comprised of a rotating series of images that ask for money to support Stone’s defense to charges that he lied to Congress and tampered with a witness. One says, “I am committed to proving my innocence. But I need your help.” Another photo, which shows a young Stone standing behind Trump years ago, says, “I’ve always had Trump’s back. Will you have mine?” Two other images tout a “Roger Stone Did Nothing Wrong” t-shirt and “Stone Cold Truth” sweatshirt.

Read more …

Nadler, Schiff, Mark Warner, they’re on a publicity tour to keep collusion alive just as it’s dying.

Donald Trump Facing Major New Investigation Into ‘Abuse Of Power’ (Ind.)

The US House Judiciary Committee will launch a probe into possible obstruction of justice and abuse of power by Donald Trump. Jerry Nadler, who chairs the committee, told ABC that the panel wanted to obtain documents from more than 60 people and entities as part of the investigation. Documents from Donald Trump Jr, the president’s son and Allen Weisselberg, the Trump Organization’s chief financial officer, are among those wanted by the panel. “We are going to initiate investigations into abuses of power, into corruption … and into obstruction of justice,” Mr Nadler said. “It’s our job to protect the rule of law.” “It’s very clear that the president obstructed justice,” he said. But the congressman added that it was too soon to consider the possibility of impeachment.

“Before you impeach somebody, you have to persuade the American public that it ought to happen,” he said. The politician said the committee would release the full list of people and organisations it would be seeking information from on Monday. He said that the president’s firing of James Comey, who at the time was leading an investigation into Russia’s alleged interference in the 2016 US election, was evidence of Mr Trump’s obstruction. The congressman also cited what he described as Mr Trump’s attempts to intimidate witnesses involved in the probe. “I am an innocent man being persecuted by some very bad, conflicted & corrupt people in a Witch Hunt that is illegal & should never have been allowed to start,” Donald Trump said on Twitter, in response to the announcement. “Despite this, great success!”

Read more …

Gee, how can it be?

America’s Trust In Mainstream Media Hits Rock Bottom (SCF)

Things are going from bad to worse for the US legacy media as its trust credentials have reached an all-time new low, as if that were possible. It has even achieved a lower trust rating than lawyers and members of Congress. The introduction to the CJR poll provided the following ominous opening: “For decades, we’ve known that Americans don’t trust the press. What we haven’t known is how people view the makings of journalism, from the use of fact checkers and anonymous sources to the question of whether money skews journalistic decision-making. This new national poll for CJR answers those questions, and points to how big the trust gap remains.” Indeed, the cynicism on the street should have every mainstream media purveyor in a state of absolute panic.

In one particular finding, it was revealed that many news consumers believe that reporters, seemingly in an effort to push forward with a political agenda, are too quick to run with a story before knowing all of the facts. This has never been more true before than in the Trump era where anything goes, so long as it trashes conservatives. We have just witnessed ample proof of that media tendency in several high-profile cases. This week, attorneys for Nick Sandmann, a student from Covington Catholic High School, filed a lawsuit against the Washington Post, seeking $250 million in damages for negligence. Sandmann and his fellow students became the target of false accusations of racism during a trip to Washington, D.C.

The mainstream media, as well as many politicians and celebrities, pushed the story that the young student, a Trump supporter, had taunted an elderly Native American Indian near the Lincoln Memorial. The story quickly fell apart, however, after video of the encounter and eyewitness accounts destroyed the media version of events. Attorneys for the boy claim that the Bezos-owned newspaper “wrongfully targeted and bullied Nicholas because he was the white, Catholic student wearing a red ‘Make America Great Again’ souvenir cap on a school field trip to the January 18 March for Life in Washington, D.C.” Todd McMurtry, one of the attorneys for the Catholic student, called the Washington Post “a weaponized news outlet that used its power and strength to destroy Nick Sandmann’s reputation.”

[..] When asked how much confidence they had in the media, almost 70 percent of Republican respondents answered “hardly any confidence at all,” while just 25 percent of Democrats held a similar opinion.

Read more …

Well, not entirely; he merely named it as a factor.

Trump Blames Timing Of Cohen Testimony For Collapse Of Kim Jong-Un Summit (G.)

US president Donald Trump has blamed that the Democrats’ decision to interview his longtime fixer, lawyer Michael Cohen, on the same day as a meeting with Kim Jong-un for the fact that the North Korea summit ended with no deal. “For the Democrats to interview in open hearings a convicted liar & fraudster, at the same time as the very important Nuclear Summit with North Korea, is perhaps a new low in American politics and may have contributed to the ‘walk.’” Trump said on Twitter, referring to his decision to walk away from what he previously said was a bad deal with Kim. “Never done when a president is overseas. Shame!” Last week in Hanoi, Trump and Kim met for the second time to try to negotiate a deal that would surrender some of North Korea’s nuclear weapons arsenal in return for sanctions relief. After talks fell apart over the issue of sanctions, Trump told a media conference “sometimes you have to walk”.

At the same time in Washington, Trump’s former aide Cohen was testifying before the US House of Representatives’ oversight committee, accusing Trump of ordering his personal attorney to make threats for him about 500 times over the past 10 years. He also called the president a liar, racist and conman. When asked about Cohen’s testimony at a press conference on Thursday in Hanoi after Trump had abruptly decided to end the summit with Kim early, the president called the allegations “incorrect” and criticised the decision to have the hearing while he was away. “I tried to watch as much as I could,” Trump said. “I wasn’t able to watch too much because I’ve been a little bit busy, but I think having a fake hearing like that and having it in the middle of this very important summit is really a terrible thing.”

Read more …

It doesn’t get more obvious.

US Voters Overwhelmingly Reject “Socialists” And Candidates “Over 75” (ZH)

[..] in the latest indication that the odds in the general election would be heavily stacked against Bernie, an NBC/Wall Street Journal poll revealed that only 25% of respondents ranked “socialist” as a desirable trait for a candidate. And only 37% said “someone over 75” would be a desirable candidate, according to Bloomberg. Meanwhile, more voters said they would accept a candidate who was gay or a lesbian, or an Independent under the age of 40. Critically, the survey showed that 41% of voters would definitely or likely vote for Trump in 2020, while 48% said they would probably vote for the Democratic candidate. But, in a possible silver lining for Sanders and his “political revolution”, 55% of voters said they would support a candidate who would implement major changes (as Trump did), vs. 42% who said they wouldn’t.

“We’re getting early signals from Democratic primary voters that they are looking for bigger change and someone who agrees with them on policy,” said Bill McInturff, a Republican pollster who worked on the survey. Republicans in the White House, Congress and in the media have made “socialism” a significant point of attack as the election draws closer, ripping proposals for expanded access to Medicare, the so-called Green New Deal, and other Democratic priorities. And though only 41% of respondents said they would support Trump in 2020, a majority said they had a favorable view of the Trump economy, and few expect a recession in the coming year. “As long as these economic numbers look like this, that always keeps an incumbent president in the race,” McInturff said.

[..] only 38% of respondents said they would support a third-party candidate in 2020. Meanwhile, Trump’s approval rating ticked higher in January from 43% to 46%. [..] Trump’s approval rating ticked up to 46 percent from 43 percent in January. He had the support of 88 percent of Republicans. Thirty-seven percent of GOP primary voters said they’d like to see another Republican challenge Trump in 2020, while 59 percent said they were opposed to that.

Read more …

I’m all for ending teh scourge that cars have become. But why do we need a bunch of US investors for that? And do these people realize that we won’t pay for the upkeep of the roads once we ditch our cars? It’s going to be public transport, not Lyft cars.

Carpocalypse Now: We’re In The Endgame For Cars (BI)

The founders of the ride-sharing app Lyft filed their IPO papers last week, and their vision for the company is dramatic. Lyft (which works a bit like Uber) is not just about getting you from A to B, they say. Rather, founders Logan Green and John Zimmer believe that car ownership is in permanent decline and they want to help it die, they write in their S-1 filing. “We believe that the world is at the beginning of a shift away from car ownership to Transportation-as-a-Service, or TaaS. Lyft is at the forefront of this massive societal change,” they told investors.

“Car ownership has … economically burdened consumers. US households spend more on transportation than on any expenditure other than housing. … On a per household basis, the average annual spend on transportation is over $9,500, with the substantial majority spent on car ownership and operation.” Cars create “inequality,” they argue. “The average cost of a new vehicle in the United States has increased to over $33,000, which most American households cannot afford,” the IPO says. “We estimate over 300,000 Lyft riders have given up their personal cars because of Lyft.”

• Car sales in Britain declined 18.2% in January. It was the eighth successive month of decline. • Sales in Turkey declined 60%. •Europe-wide, sales are down around 6%. • In the US, total car registrations have declined by about 10% • Tire sales – a proxy for vehicle production – are down in China, too.

Read more …

The power of Bayer and Monsanto will make us commit collective suicide.

Toxic Agrochemicals And Regulators’ Collusion With Industry (OffG)

Dr Mason had been writing to the European Chemicals Agency (ECHA), the European Food Safety Authority (EFSA) and the EU Commission for an 18-month period, challenging them about ECHA’s positive assessment of glyphosate. Many people around the world had struggled to understand how and why the US EPA and the EFSA concluded that glyphosate is not genotoxic (damaging to DNA) or carcinogenic, whereas the World Health Organisation’s cancer agency, the IARC, came to the opposite conclusion. The IARC stated that the evidence for glyphosate’s genotoxic potential is “strong” and that glyphosate is a probable human carcinogen. While IARC referenced only peer-reviewed studies and reports available in the public literature, the EPA relied heavily on unpublished regulatory studies commissioned by pesticide manufacturers.

In fact, 95 of the 151 genotoxicity assays cited in the EPA’s evaluation were from industry studies (63%), while IARC cited 100% public literature sources. Another important difference is that the EPA focused its analysis on glyphosate in its pure chemical form, or ‘glyphosate technical’. The problem with that is that almost no one is exposed to glyphosate alone. Applicators and the public are exposed to complete herbicide formulations consisting of glyphosate plus added ingredients (adjuvants). The formulations have repeatedly been shown to be more toxic than glyphosate in isolation. The European Ombudsman has now rejected Rosemary Mason’s complaint who has in turn written a 25-page response documenting the wide-ranging impacts of glyphosate-based Roundup and other agrochemicals on human health and the environment.

She also outlines the various levels of duplicity that have allowed many of these chemicals to remain on the commercial market. Mason is led to conclude that, due to the rejection of her complaint (as with others lodged by her to the Ombudsman), the European Ombudsman Office is also part of the problem and is essentially colluding with European pesticide regulatory authorities. Mason has addressed this concern directly to Emily O’Reilly, who currently holds the post of European Ombudsman: “In your rejection of all my complaints over the last few years, it is clear that The Ombudsman’s Office is protecting the European pesticides regulatory authorities, who are in turn being controlled by the European Glyphosate Task Force…. You have turned a blind eye to the authorisation of many of the toxic pesticides that are on the market today because industry is being allowed to self-regulate.”

Read more …

The things that must be turned around. We’ve gone much too far.

“The bats – also known as flying foxes – are resorting to eating in orchards to survive because only 5 per cent of Mauritius’s native forests remain..”

Endangered Fruit Bats ‘Being Driven To Extinction’ In Mauritius (Ind.)

Scientists are suing the Mauritian government for “driving endangered fruit bats towards extinction”, after mass culls killed at least half their population. More than 50,000 of the animals are thought to have been killed in three culls since 2015, in an attempt to protect fruit in orchards. The bats – also known as flying foxes – are resorting to eating in orchards to survive because only 5 per cent of Mauritius’s native forests remain, animal experts warned. Fruit bats are vital for biodiversity as they pollinate flowers and scatter seeds, enabling trees and plants to grow and spread, according to conservationists. But populations of the flying foxes have fallen by more than 50 per cent in four years, said Vincent Florens, an ecologist at the University of Mauritius. Some believe fewer than 30,000 now remain.

Tigga Kingston, a biologist and bat specialist for the International Union for Conservation of Nature, said the fewer animals remain, the more vulnerable they will be to natural disasters, disease and habitat loss, leading to extinction. Britain’s Bat Conservation Trust has pleaded for the culls to end, citing research that found they accounted for only 10 per cent of fruit plant damage. The first cull, in 2015, killed 30,000, and in a second cull, the following year, 7,380 were targeted. The IUCN then raised the bats’ status from vulnerable to endangered. But the latest cull involved 13,000. Prof Florens said he believed the number killed is much higher than the 50,300 government figure. “The culls took place late in the year, when many mothers were pregnant or had babies,” he told National Geographic. “You shoot one bat and basically kill two.” Others were likely to have been injured and died later, he said.


At least 50,000 fruit bats have been culled in Mauritius since they have been forced to survive on orchard fruits because of deforestation (iStock )

Read more …

Mar 012019
 


Salvador Dali Eggs on the plate (without the plate) 1932

 

Tax Cuts A Year Later – Did They Deliver? (Roberts)
The Death Of Cash Has Been Greatly Exaggerated – Look At The $100 Bill (MW)
China Trade Talks Made ‘Fantastic’ Progress Last Week -Kudlow (CNBC)
China’s Shadow Debt Burden Much Larger Than Believed (ZH)
Growing China Downdraft Chills Asia Factory Activity (R.)
CPAC On Socialism, Bernie Sanders And 2020: ‘Trump Will Win, 100%’ (G.)
Claim Trump Had Prior Knowledge Of WikiLeaks Fails Hilariously (Dore)
Trump Says Cohen Lied ‘95% Instead Of 100%’ In Testimony To Congress (G.)
The Case That Could Bring Down Canada’s Justin Trudeau (G.)
Anti-Maduro Allies Regroup After The Fight For Humanitarian Aid (CNBC)
Disclosing Subpoena for Testimony, Chelsea Manning Vows to Fight (NYT)
The Grey Wall Of China: Inside The World’s Concrete Superpower (G.)

 

 

Well, they delivered something. But that’s a much bigger topic than just tax cuts, that’s Fed policy.

Lance is trying to utterly confuse us with an absolute overkill of graphs all in one place. But the gist is clear.

Tax Cuts A Year Later – Did They Deliver? (Roberts)

I received a lot of push back on my views when the “mainstream” analysis was the tax cuts would jump start economic growth. Of course, with 2017’s Q1 economic growth coming in at a meager 0.7% annualized, it would certainly seem to be needed. But as I questioned then: “Do tax reductions lead to higher economic growth, employment and incomes over the long-term as promised?” Speaking to NBC’s Meet the Press, VP Mike Pence argued at the time he was confident that eventually, the deficit would decline as it would be overcome by surging economic “growth” thanks to the tax cuts it will fund. [..] As shown in the chart below, changes to tax rates have a very limited impact on economic growth over the longer term.

Reagan’s tax cuts were effective because they were “timely” due to the economic, fiscal, and valuation backdrop which is diametrically opposed to the situation today. “Importantly, as has been stated, the proposed tax cut by President-elect Trump will be the largest since Ronald Reagan. However, in order to make valid assumptions on the potential impact of the tax cut on the economy, earnings and the markets, we need to review the differences between the Reagan and Trump eras. My colleague, Michael Lebowitz, recently penned the following on this exact issue.

‘Many investors are suddenly comparing Trump’s economic policy proposals to those of Ronald Reagan. For those that deem that bullish, we remind you that the economic environment and potential growth of 1982 was vastly different than it is today.” [..] The differences with today’s economic and market environment could not be starker. The tailwinds provided by initial deregulation, consumer leveraging, declining interest rates, and inflation provided huge tailwinds for corporate profitability growth. The chart below shows the ramp up in government debt since Reagan versus subsequent economic growth and tax rates.

While wages did rise marginally over the last, due more to tightness in the labor market rather than tax cuts, corporations failed to share the wealth. In fact, the ratio of profits to workers wages have materially worsened since the enactment of tax cuts.

Read more …

Going to the mattresses. To be honest, it’s always been clear that trying turn the US into a cashless society is the stuff for revolution.

The Death Of Cash Has Been Greatly Exaggerated – Look At The $100 Bill (MW)

The stock market is coming off its best January in years, the economy appears to be holding up well, interest rates are still low, cryptos and mobile payments continue to gain traction — it’s not exactly a cash-friendly climate at the moment. Then what’s going on with the $100 bill? A decade ago, $20 and $1 bills were both far more prevalent than the Benjamins. As you can see by this chart from Deutsche Bank’s Torsten Slok, the currency hierarchy has shifted dramatically since then.

In 2017, the $100 bill took the crown as the most popular U.S. bill, doubling since 2007, which has helped drive the sharp rise in currency and other liquid assets as a share of GDP:

But why? Deutsche Bank’s Slok mulled a few possibilities. “It could be driven by a global fear of negative interest rates in Europe and Japan,” he said. “Or it could be a savings vehicle for U.S. households worried about another financial crisis, or it could be driven by more demand from the global underground economy.” Of course, we know it’s not because more people are using the $100 bill as pocket money. Smaller bills are still far more popular in that regard. Just look at the average lifespan of each bill:

So what’s that telling us? Mattresses everywhere are getting increasingly stuffed with $100 bills instead of being put to work in the stock market or elsewhere. That speaks to the frame of mind of the Average Joe as much as anything else.

Read more …

“Lighthizer said after the testimony [..] that formal steps would be taken to abandon plans of raising tariffs on Chinese goods.”

China Trade Talks Made ‘Fantastic’ Progress Last Week -Kudlow (CNBC)

National Economic Council Director Larry Kudlow said Thursday that trade talks between the U.S. and China are going great, noting the two countries are making “fantastic” progress in meetings last week. “Last week was fantastic,” Kudlow told CNBC’s “Squawk on the Street.” “We’re making great headway on nontariff barriers and tariffs regarding various commodities such as soybeans and energy and beef. We have mechanisms with regard to enforcement, which is -I think- unparalleled.” “The progress has been terrific,” Kudlow added. But “we have to hear from the Chinese side. We have to hear from President Xi Jinping, of course. I think we’re headed for a remarkable, historic deal.” U.S. equities briefly pared some of their losses following Kudlow’s remarks.

Kudlow also said China has expressed willingness to make key structural changes to prevent intellectual property theft, a highly contested issue in these negotiations. Kudlow’s comments follow testimony from Robert Lighthizer, the U.S. trade representative. Lighthizer told members of the House Ways and Means Committee that China needed to do more than just buy more U.S. goods for the two countries to strike a permanent trade deal. But Lighthizer said after the testimony, according to The Wall Street Journal, that formal steps would be taken to abandon plans of raising tariffs on Chinese goods. This is a clear signal that a trade deal could come in the near future. “Lighthizer has worked miracles on this Chinese deal,” Kudlow said. “We’ve never come this far on China trade.”

Read more …

News item by news item my long held ideas of the importance of the shadow banks for China’s official growth numbers are being confirmed.

China’s Shadow Debt Burden Much Larger Than Believed (ZH)

[..] a team of S&P credit analysts warned in an October report that China’s debt burden might be much larger than previously believed. Against a backdrop of soaring corporate defaults, the team from S&P warned that investors could safely tack on another ~40% of debt/GDP to China’s total (with even more likely hidden from view) after a careful analysis of a new source of shadow debt being tapped by local governments to further their development plans. These Local Government Financing Vehicles, or LGFVs, represented “an iceberg with titanic credit risks” as local officials had increasingly turned to these sources of shadow financing to finance development projects while bureaucrats in Beijing struggled to turn off the credit taps.

Now that Beijing has reckoned with the idea that now is not the time to try and contain the country’s massive debt load, even as the percentage of bad debt balloons, it increasingly appears that these measures might be too little, too late for investors who financed these LGFVs, as the Wall Street Journal revealed in a report about how a local government in China’s impoverished South had caused a stir by stiffing its creditors after racking up a debt pile – largely through these LGFVs – equivalent to roughly three times the government’s annual revenue.

While putting a number on the amount of shadow debt in the system is difficult due to the opacity of the Chinese financial system, one economist at a domestic think tank estimated that off-balance-sheet borrowings by local governments could be as much as 23.6 trillion yuan, as of the end of 2017, meaning that total is likely higher today, as governments have been forced to tap these vehicles during Beijing’s deleveraging campaign. The proliferation of private funds and other money-raising channels for local governments makes it difficult for economists and for Beijing to track the total amount of borrowings. Official figures pegged the sum of local and central government debt at 29.95 trillion yuan ($4.457 trillion) in 2017, roughly 36% of the economy.

Read more …

South Korea “exports contracted 11.1 percent in February from a year earlier, their biggest drop in nearly three years, with shipments to major buyer China slumping 17.4 percent.”

Growing China Downdraft Chills Asia Factory Activity (R.)

Weak demand in China and growing global fallout from the Sino-U.S. trade war took a heavier toll on factories across much of Asia in February, business surveys showed on Friday. Activity in China’s vast manufacturing sector contracted for the third straight month, pointing to more strains on its major trading partners and raising questions over whether Beijing needs to do more to stabilize the slowing economy. In many cases, business conditions were the worst Asian companies have faced since 2016, with demand weakening not only in China but globally. Japan’s factory gauge fell at the sharpest pace in 2-1/2 years as slumping orders prompted plants to cut production, while separate data from South Korea showed its exports plummeted.

“The weakening trend in Chinese import demand weighed heavily on exports across the rest of the region,” said Sian Fenner, lead Asia economist at Oxford Economics. [..] China watchers are looking to Premier Li Keqiang’s work report to the annual meeting of parliament next week for clues on further stimulus plans. Li will set out the government’s economic targets for the year on Tuesday. Sources have told Reuters Beijing will set a 2019 growth target of 6.0-6.5 percent, down from around 6.5 percent in 2018. China reported economic growth cooled to 6.6 percent last year, its weakest pace since 1990, but some analysts believe actual activity is much weaker.

[..] In Japan, the Markit/Nikkei Manufacturing Purchasing Managers Index (PMI) fell into contraction territory as both domestic and foreign orders slumped. “We need to be mindful that uncertainty over the global economic outlook is heightening,” Bank of Japan board member Hitoshi Suzuki said on Thursday, after data showed the biggest drop in industrial output in a year in January. Readings from South Korea — the first economy in Asia to report trade data each month – were equally grim. Its exports contracted 11.1 percent in February from a year earlier, their biggest drop in nearly three years, with shipments to major buyer China slumping 17.4 percent.

Read more …

“Once deeply resistant to Trump, CPAC is now like a religious gathering full of Trump idolatry. “Make America Great Again” (Maga) hats and sweaters are much in evidence..”

CPAC On Socialism, Bernie Sanders And 2020: ‘Trump Will Win, 100%’ (G.)

“The favourite in the Democratic race is Bernie Sanders because the way he makes socialism sound,” said Brandon Morris, 32, wearing a Maga cap. “Most citizens don’t know how the system works; once I tell them, they see it will fall apart.” Morris, a nurse from Gainesville, Florida, who is African American, added: “I’m against socialism because I see it as a form of slavery. The rich will get richer and the poor will get poorer. Cory Booker and Kamala Harris talk about Medicare for All and that will kill doctors’ incentives to work hard. Look at Cuba.” Like Trump, Sanders ran in 2016 warning of a rigged system and the downsides of global trade and, like Trump, he thrived in midwestern states against Hillary Clinton. Less than a week after declaring his 2020 candidacy, Sanders had already raised $10m, well ahead of any of his rivals.

Wearing a Maga cap and stars and stripes jacket, Sam Lee, the communications director of conservative group Grand Opportunity USA, said: “I think Sanders has the ability to generate a base. He’s genuine. It’s the same thing as Trump: they’re very upfront about who they are. But Trump will win, 100%.” Lee rejected candidates such as Harris and Elizabeth Warren as “background noise”, adding: “Every election has people who aren’t going to make it and I don’t think they could.” Fran Wendelboe, the treasurer of the conservative organisation the 603 Alliance in New Hampshire, the first state to hold a primary, said: “Among the young voters, Bernie Sanders still seems popular. I think he still has great traction. Elizabeth Warren doesn’t seem to be getting much – she should get out of the race. But they’re all trampling themselves to get as far to the left as they can. Nobody’s going to beat Trump.”

Mike Wertz, a self-employed property appraiser, said: “It’s hard to run against Santa Claus: Bernie Sanders is Santa Claus because he says he would give everything away free. But Trump is still popular.” Wertz, 52, from Stevensville, Maryland, dismissed the prospects of Joe Biden, the former vice-president who is yet to declare whether he will mount a third bid for the White House. “Biden would get exposed. He stumbles around and says silly things. Trump would bring that out of him; he wouldn’t let Biden get away with it. If Biden said something stupid, Trump would tweet it in about 30 seconds.”

Read more …

Just to show you my views are not alone. Jimmy Dore and Aaron Maté.

Someone mailed me yesterday talking about the conservatism of my columns. Never saw that before. And I don’t agree. Raging against the empty narratives of the anti-Trump machine does not make me a Trump supporter. People should read more carefully. The world is not divided into two camps.

Claim Trump Had Prior Knowledge Of WikiLeaks Fails Hilariously (Dore)

Read more …

Cohen and the Democrats lost it all when he said at the start he never wanted a White House job.

Trump Says Cohen Lied ‘95% Instead Of 100%’ In Testimony To Congress (G.)

Donald Trump claimed on Thursday that Michael Cohen lied about almost everything during his explosive congressional testimony the day before – but told the truth by saying he had no evidence that Trump colluded with Russia. Speaking in Vietnam after meeting the North Korean leader, Kim Jong un, Trump said Cohen, his former legal fixer, lied “95% instead of 100%” of the time during a hearing of the House oversight committee on Wednesday. “I was impressed,” said Trump. Trump falsely claimed several times that Cohen had testified that there had been “no collusion”. In fact, Cohen said he did not know any “direct evidence” of collusion. “But I have my suspicions,” he told members of Congress.

Trump said of Cohen: “He lied a lot, but it was very interesting, because he didn’t lie about one thing. He said no collusion with the Russian hoax. And I said, ‘I wonder why he didn’t just lie about that too, like he lied about everything else.’” Cohen delivered a scathing account of his 10 years as Trump’s enforcer, calling the president a racist conman, implicating him in a series of felonies and estimating that Cohen had threatened 500 people on Trump’s behalf. He said Trump’s eldest son, Donald Jr, had been involved in a criminal conspiracy to pay hush money to a pornographic actor, Stormy Daniels, who alleged she had an affair with the elder Trump. Federal prosecutors in New York continue to investigate.

Cohen confirmed that Trump was under federal investigation for undisclosed crimes and warned that Trump may try to cling to power even if his re-election campaign fails next year. He also alleged that Trump knew in advance of plans by WikiLeaks to publish Democratic party emails, which US authorities say were stolen by Russian intelligence operatives, and that Donald Jr was to meet with Russians at Trump Tower. But, Cohen said, he knew of no direct evidence that Trump or his campaign colluded with Russia’s interference in the 2016 election campaign. US intelligence agencies concluded that the Russian operation was aimed at boosting Trump’s chances.

Read more …

Trudeau’s riding has lots of SNC-Lavalin jobs. But he may have gone too far.

The Case That Could Bring Down Canada’s Justin Trudeau (G.)

What is going on in Canada? Canada’s prime minister, Justin Trudeau, is facing the biggest political scandal of his administration. The affair centres around allegations that his former attorney general, Jody-Wilson Raybould, was improperly pressured by some of his closest advisers to prevent the prosecution of a large Canadian engineering firm over accusations of fraud and bribery. Thus far, the scandal has been politically costly; Gerald Butts, a longtime friend of Trudeau’s, and his closest adviser, resigned two weeks ago. Wilson-Raybould has resigned, too. A handful of polls are showing the scandal is politically unpopular for the governing Liberals – which is worrying for them, given there is a federal election in October.

What is the company accused of? SNC-Lavalin, based in Montreal, is accused of paying C$48m worth of bribes in Libya to Muammar Gaddafi’s family, in order to secure lucrative contracts. The bribery is alleged to have occurred between 2001 and 2011. If found guilty, the company would be barred from bidding on federal projects for a decade. SNC-Lavalin employs nearly 50,000 people worldwide, with 3,400 in Quebec. Company executives have been lobbying fora “deferred prosecution agreement”, which in effect allows them to pay a fine in lieu of a criminal prosecution, with no ban on bidding for contracts. But federal prosectors have decided to pursue a trial.

This is where the scandal is centred: the prime minister and his aides, along with the finance minister, have been accused of pressing Wilson-Raybould to intervene and asking prosecutors to accept a deferred prosecution agreement. Wilson-Raybould declined to override the judgment of her top legal team.

Read more …

Nobody is willing to say yes to intervention.

Anti-Maduro Allies Regroup After The Fight For Humanitarian Aid (CNBC)

Venezuela’s opposition has formally urged the international community to keep all options on the table, after deadly clashes broke out in border towns over the weekend. On Saturday, at least three people were killed and hundreds more were left injured, Reuters reported, as opposition activists tried to defy a government ban to bring food supplies, hygiene kits and nutritional supplements into the country. It comes at a time when the South American nation is in the midst of the Western Hemisphere’s worst humanitarian crisis in recent memory. President Donald Trump has consistently refused to rule out the prospect of military intervention in Venezuela and the country’s opposition leader, Juan Guaido, has called on the international community to “keep all options open.”

U.S. Secretary of State Mike Pompeo tweeted over the weekend that Washington would “take action against those who oppose the peaceful restoration of democracy in Venezuela.” To be sure, the prospect of U.S.-led military intervention is clearly being signaled as a form of “action.” “I think large-scale U.S. military intervention remains unlikely, though the chances are increasing — that’s worrying,” Tom Long, assistant professor in the department of politics and international studies at the University of Warwick, told CNBC via email. “More than the deadly clashes, what I worry could push towards military action is the lack of options remaining for the opposition and its international allies to increase pressure,” he added.

Read more …

We can only guess as to why Chelsea picks the NYT to divulge details about this. We don’t have to guess as to why the NYT picks it up; it wants to repeat this one again:

” In recent years, Mr. Assange and WikiLeaks have become notorious for their role in disseminating Democratic emails stolen by Russian hackers as part of the Russian government’s covert efforts to damage the 2016 Democratic presidential nominee, Hillary Clinton, and help Donald J. Trump win.”

And Chelsea now helps them do it.

Disclosing Subpoena for Testimony, Chelsea Manning Vows to Fight (NYT)

Chelsea Manning, the former Army intelligence analyst convicted in 2013 of leaking archives of secret military and diplomatic documents to WikiLeaks, revealed in an interview on Thursday that she had been subpoenaed to testify before a grand jury — and vowed to fight it. The subpoena does not say what prosecutors intend to ask her about. But it was issued in the Eastern District of Virginia and comes after prosecutors inadvertently disclosed in November that Julian Assange, the founder of WikiLeaks, has been charged under seal in that district. Ms. Manning, who provided a copy of the subpoena to The New York Times, said that her legal team would file a motion on Friday morning to quash it, arguing that it would violate her constitutional rights to force her to appear.

She declined to say whether she would cooperate if that failed. “Given what is going on, I am opposing this,” she said. “I want to be very forthright I have been subpoenaed. I don’t know the parameters of the subpoena apart from that I am expected to appear. I don’t know what I’m going to be asked.” [..] Ms. Manning said that her lawyers have been talking about the subpoena with an assistant United States attorney in the Eastern District, Gordon D. Kromberg. After an inadvertent court filing revealed that Mr. Assange has been charged under seal, it was Mr. Kromberg who successfully argued before a judge that any such charges remain a secret and should not be unsealed. Moreover, she said, Mr. Kromberg told her lawyers in vague terms that prosecutors wanted to talk to her about her past statements.

During her court-martial, Ms. Manning delivered a lengthy statement about how she came to copy archives of secret documents and send them to WikiLeaks, including her online interactions with someone who was likely Mr. Assange. “It’s disappointing but not surprising that the government is continuing to pursue criminal charges against Julian Assange, apparently for his role in uncovering and providing the public truthful information about matters of great public interest,” said Barry Pollack, a lawyer for Mr. Assange. [..] In recent years, Mr. Assange and WikiLeaks have become notorious for their role in disseminating Democratic emails stolen by Russian hackers as part of the Russian government’s covert efforts to damage the 2016 Democratic presidential nominee, Hillary Clinton, and help Donald J. Trump win.

Read more …

“Since 2003, China has poured more cement every two years than the US managed in the entire 20th century.”

The Grey Wall Of China: Inside The World’s Concrete Superpower (G.)

In the suburbs south of Beijing, what could one day be the world’s busiest airport is rapidly taking shape. Nicknamed “the starfish” due to the striking design by Zaha Hadid Architects, the Beijing Daxing international airport is set to open in October, and could eventually handle more than 100 million passengers a year. While the 52,000-tonne steel exoskeleton covering the airport’s six concourses immediately catches the eye, what lies beneath is familiar to many Chinese mega-projects: concrete – 1.6m cubic metres of it. Located 67km south of the capital, the airport sprawls across 780,000 sq metres – about a third of the size of Edinburgh. It aims to process 72 million passengers a year, and will have four runways by 2025, but there is a longer-term vision for additional runways and talk of 200 million passengers. Beijing’s existing international airport in the north-east, which will stay open, already handles around 96 million passengers a year.


Photograph: Sipa Asia/Rex/Shutterstock

The new airport is just the latest chapter in the story of how China became the concrete superpower of the 21st century. Since 2003, China has poured more cement every two years than the US managed in the entire 20th century. Even after a dip in recent years, China uses almost half the world’s concrete. The construction sector – roads, bridges, railways, urban development and other concrete-and-steel projects – accounted for one-third of the expansion of the Chinese economy in 2017. China is already home to the largest concrete structure in the world – the Three Gorges Dam across the Yangtze River. Sometimes touted as China’s “new Great Wall”, the dam includes 27.2m cubic metres of concrete and its hydroelectric power station is the world’s largest power station in terms of capacity.

Like all of China’s concrete achievements, the Three Gorges Dam has been mired in controversy. Around 1.4 million people were displaced by the project, and there were complaints that the rehousing settlements were inadequate or that compensation money disappeared into local government coffers. More than 100 workers died in the construction process, and archaeological and cultural sites were flooded. None of this prevented Li Yongan, general manager of the Three Gorges Corporation, from declaring in 2006 that the dam was “the grandest project the Chinese people have undertaken in thousands of years”.

Li only had to wait seven more years to be outdone by yet another Chinese feat of concrete. In 2013, the eastern route of the South-to-North Water Diversion Project opened, connecting the Grand Canal in China’s east with the capital in the north. The project is a multi-decade plan to divert the water from China’s lush south to its arid north, where water scarcity is an acute problem. The waterway has already cost around $80bn (£61bn), making it the most expensive infrastructure project in the world. In the first phase alone, it has used more than double the amount of concrete in the Three Gorges Dam: 65m cubic metres. The project ultimately aims to transport fresh water a distance of more than 4,300km.

Read more …

Feb 082019
 


Salvador Dali They were there 1931

 

AOC, The Little Socialist That Could (Strassel)
Green New Deal Takes Its First Congressional Baby Step (IC)
Are Billionaires The American Dream? (NYMag)
China Is Unlikely To Become The World’s Largest Economy Anytime Soon (Colombo)
European Economy Raises Fresh Global Growth Fears (MW)
US Consumer Credit Hits $4 Trillion; Student, Auto Loans Hit All Time High (ZH)
Corbyn Sparks Labour Civil War Over Referendum (Ind.)
Brexit Deal May Not Be Put To MPs Until Late March (G.)
France Recalls Rome Envoy Over Worst Verbal Onslaught ‘Since The War’ (G.)
Rome’s War Of Words With Macron May Prove Self-Defeating (G.)
Fiat Chrysler Shares Plummet 12% On Weak Outlook (CNBC)
‘Globish’: Why France Has A Love-Hate Relationship With Global English (G.)
Trump’s Absurd Claim that Americans Are Free from Government Coercion (Bovard)
Albert Edwards: Negative Rates, 15% Budget Deficits And Helicopter Money (ZH)
Fed’s Powell On The Biggest Challenge Over The Next Decade (CNBC)

 

 

AOC is a step too far for Kimberley Strassel- and many others. She tweets: “The Republican Party has a secret weapon for 2020. It’s especially effective because it’s stealthy: The Democrats seem oblivious to its power. And the GOP needn’t lift a finger for it to work. All Republicans have to do is sit back and watch 29-year-old Rep. Alexandria Ocasio-Cortez . . . exist.”

That reminds me a lot of what many people said about Trump a few years ago, and that is no coincidence. AOC shakes up things like the Donald did, things in desperate need of shaking up.

She unveiled her Green New Deal, and got tons of ridicule. But 9 senators and 64 congressmen already sponsor her resolution. Perhaps her biggest danger is that they, the old guard, line up with her, and she becomes one of them. Or no, her biggest risk is in criticizing Trump and falling into the old guard that way. While her biggest danger is calling herself a socialist, which is a death sentence in the US.

And there’s her limited knowledge of energy issues, which apparently leads her to think present systems can be replaced 1-on-1 by renewable ones, while the no. 1 energy plan should be to use much less.

But she got something to say, this piece is pretty solid, and it will appeal to many disgruntelds:

AOC, The Little Socialist That Could (Strassel)

AOC, as she’s better known, today exists largely in front of the cameras. In a few months she’s gone from an unknown New York bartender to the democratic socialist darling of the left and its media hordes. Her megaphone is so loud that she rivals Speaker Nancy Pelosi as the face of the Democratic Party. Republicans don’t know whether to applaud or laugh. Most do both. For them, what’s not to love? She’s set off a fratricidal war on the left, with her chief of staff, Saikat Chakrabarti, this week slamming the “radical conservatives” among the Democrats holding the party “hostage.” She’s made friends with Jeremy Corbyn, leader of Britain’s Labour Party, who has been accused of anti-Semitism.

She’s called the American system of wealth creation “immoral” and believes government has a duty to provide “economic security” to people who are “unwilling to work.” As a representative of New York, she’s making California look sensible. On Thursday Ms. Ocasio-Cortez unveiled her vaunted Green New Deal, complete with the details of how Democrats plan to reach climate nirvana in a mere 10 years. It came in the form of a resolution, sponsored in the Senate by Massachusetts’ Edward Markey, on which AOC is determined to force a full House vote. That means every Democrat in Washington will get to go on the record in favor of abolishing air travel, outlawing steaks, forcing all American homeowners to retrofit their houses, putting every miner, oil rigger, livestock rancher and gas-station attendant out of a job, and spending trillions and trillions more tax money.

Oh, also for government-run health care, which is somehow a prerequisite for a clean economy. It’s a GOP dream, especially because the media presented her plan with a straight face – as a legitimate proposal from a legitimate leader in the Democratic Party. Republicans are thrilled to treat it that way in the march to 2020, as their set-piece example of what Democrats would do to the economy and average Americans if given control. The Green New Deal encapsulates everything Americans fear from government, all in one bonkers resolution.

Read more …

AOC already has 9 senators and 64 congressmen sponsoring her resolution. Look for them distancing themselves as soon as it hurts them in the polls.

Green New Deal Takes Its First Congressional Baby Step (IC)

Over the last few months, support for the Green New Deal has become a litmus test for 2020 Democratic hopefuls, and the resolution serves dual purposes: to unite lawmakers around the idea of a Green New Deal, and to offer a basic definition of what that means. For 2020 contenders who have conceptually supported the Green New Deal, the resolution makes clear that the phrase isn’t just a talking point, but connected to a specific set of policy priorities. Confirmed and rumored presidential hopefuls Elizabeth Warren, Kamala Harris, Kirsten Gillibrand, Cory Booker, and Bernie Sanders will be among the nine senators co-sponsoring the resolution. Sixty-four House Democrats will also be co-sponsoring the legislation, including Reps. Ro Khanna, D-Calif., Pramila Jayapal, D-Wash., and Joe Neguse, D-Colo.

“We’re going to be pressuring all of the 2020 contenders to back this resolution,” said Stephen O’Hanlon, a spokesperson for the Sunrise Movement, which helped launched the Green New Deal into the national spotlight with its sit-in at Pelosi’s office last November. “That’ll make it clear who’s using the Green New Deal as a buzzword and who’s actually serious about what it entails. For our generation, the difference between the Green New Deal as a buzzword and substantive policy is life and death.” [..] On Tuesday, the Sunrise Movement hosted some 500 watch parties around the country for a livestream laying out its next steps to support the resolution. As of Wednesday, the group was in the process of organizing visits to 600 congressional offices nationwide, for constituents to demand that their representatives co-sponsor Ocasio-Cortez and Markey’s measure. Supported by Justice Democrats — the group that backed Ocasio-Cortez’s primary run — Sunrise will also be launching a 15-city campaign tour through early primary states.

Read more …

2 weeks old but relevant.

Are Billionaires The American Dream? (NYMag)

In 1835, Alexis de Tocqueville produced one of the earliest accounts of the American dream. In his famous study of the Jacksonian U.S., the Frenchman wrote that Americans possessed “the charm of anticipated success” — a ubiquitous optimism that he attributed to our country’s democratic character, and to the “general equality of condition” that prevailed among its “people.” On Wednesday night, Sean Hannity took de Tocqueville to task. In the Fox News’ host’s telling, general economic equality is not a precondition for the American dream, but rather, an insurmountable obstacle to it — because the American dream is (apparently) to earn more than $10 million year without having to pay a top marginal tax rate higher than 37 percent.

Of course, Hannity did not actually frame his argument as a rebuke of de Tocqueville. His true target was Alexandria Ocasio-Cortez. After popularizing the idea of a 70 percent top marginal tax rate earlier this month, the freshman congresswoman recently suggested that the mere existence of billionaires was both immoral, and a threat to American democracy. “I do think that a system that allows billionaires to exist when there are parts of Alabama where people are still getting ringworm because they don’t have access to public health is wrong,” Ocasio-Cortez told the writer Ta-Nehisi Coates, during an interview on Martin Luther King Day.

One day later, the congresswoman approvingly quoted an op-ed by the economists Gabriel Zucman and Emmanuel Saez, which argued that the purpose of high taxes on the wealthy wasn’t merely to generate revenue, but rather, to safeguard “democracy against oligarchy.” Hannity’s not buying it. The Fox News host informed his audience Wednesday that Ocasio-Cortez had “called the American dream immoral,” and that she wants to “empower the government to confiscate” said dream. “Better hide your nice things,” Hannity advised his audience (whom he ostensibly believes to be composed primarily of billionaires), “because here come the excess police.”

[..] “Power and property may be seperated for a time, by force or fraud — but divorced never, ” Benjamin Leigh, a conservative legislator in Virginia’s House of Delegates, argued at that state’s Constitutional Convention in 1830. “For, so soon as the pang of separation is felt … property will purchase power, or power will take property.”

Read more …

Good to see my longtime friend Jesse Colombo slowly moves to my position on markets, now spelling them “markets”. And we see China largely the same too.

China Is Unlikely To Become The World’s Largest Economy Anytime Soon (Colombo)

As I have been warning for several years, China is experiencing a credit and asset bubble like Japan was in the 1980s. China’s powerful credit expansion in the past decade (as the chart below shows) is one of the main reasons why the global economy recovered from the Great Recession. China’s credit bubble of the past decade will prove to be a one-shot deal – in the next global economic downturn, there won’t be another large economy like China to binge on debt and create a temporary growth party that bails everyone else out.

An economic stagnation or slowdown in China is the least of our worries, I’m afraid. I am worried about a full-blown popping of their credit and asset bubble (like Japan in the early-1990s), which would reverberate around the world. In that scenario, Western exports to China would plunge, commodity-exporting economies from Australia to emerging markets would suffer, and the global economy would experience another severe recession if not an outright depression. The world has played with fire over the past decade and it’s just a matter of time before we all pay the price.

Read more …

Caught on Twitter: “Asked at a presser if he wakes up each morning regretting that he’s the @bankofengland governor in the age of Brexit, @markcarney1 replies: “I don’t wake up in the morning any more … I wake up in the middle of the night.”

European Economy Raises Fresh Global Growth Fears (MW)

The Bank of England and the European Commission both offered downbeat outlooks on Thursday, reaffirming growing fears about the health of Europe’s economy. Although, the BOE left interest rates unchanged, as expected, it cut its forecast for 2019 GDP to 1.2% versus its previous estimate of 1.7%, with its current level representing the weakest growth since 2009 when a crisis sparked by complex mortgage bonds cast a pall over the global financial system. “Naturally, the uncertainty over Brexit means considerable uncertainty over the U.K. macro outlook, and therefore monetary policy,” said Bill Diviney, senior economist at ABN Amro.

Both the BOE and Diviney still see a soft Brexit — where Britain leaves the European Union with a trade agreement in place — as the most likely scenario, but the U.K. economy seems destined to slow, notwithstanding any expectations of a trade resolution. [..] And it doesn’t look rosy on either side of the English Channel. On Thursday, the European Commission cut its forecast for 2019 eurozone growth to 1.3% in 2019, compared with the 1.9% expected in November. Underlining its forecast was weaker-than-expected industrial and manufacturing data for the eurozone’s biggest economy Germany. “We think there are a number of important take-aways,” said Diviney. “First of all, despite the large downgrade in economic growth forecasts, they probably do not go far enough, and further revisions are likely.”

Read more …

From revolving into non-revolving credit. Progess in America 2019.

US Consumer Credit Hits $4 Trillion; Student, Auto Loans Hit All Time High (ZH)

After a few months of wild swings, in December US consumer credit normalized rising by $16.6 billion, just below the $17 billion expected, after November’s whopping $22.5 billion. The surge in borrowing in November brought the total to just above $4 trillion for the first time ever on the back of a America’s ongoing love affair with auto and student loans. Revolving credit increased by $1.7 billion to $1.045 trillion, a modest slowdown since November’s $4.8 billion.

[..] while the slowdown in December credit card use may prompt fresh questions about the strength of the US consumer during the all-important holiday spending season, the recent dramatic upward revision to personal savings notwithstanding, one place where there were no surprises, was in the total amount of student and auto loans: here as expected, both numbers hit fresh all time highs, with a record $1.593 trillion in student loans outstanding, an impressive increase of $10.3 billion in the quarter, while auto debt also hit a new all time high of $1.155 trillion, an increase of $9.5 billion in the quarter. In short, whether they want to or not, Americans continue to drown even deeper in debt, and enjoying every minute of it.

Read more …

Is it too late for Corbyn to take control of the conversation? is he even capable?

Corbyn Sparks Labour Civil War Over Referendum (Ind.)

Jeremy Corbyn is battling to calm a growing Labour civil war over his refusal to support a fresh Brexit referendum, as some of his MPs threatened to quit the party in protest. The Labour leader was forced to justify his intentions after his new offer to help Theresa May deliver Brexit triggered accusations that he had torpedoed his party’s policy of keeping a public vote on the table. Amid growing tensions, Mr Corbyn wrote to party members to insist that party backing for a Final Say referendum remained an option – hours after furious Labour MPs accused their leader of helping enable Brexit.

The backlash was triggered when Mr Corbyn wrote to Ms May on Wednesday evening offering continued discussions in “constructive manner” with the aim of “securing a sensible agreement that can win the support of parliament and bring the country together”. Labour would support an exit deal if five conditions were met, he said, including a customs union with the EU and guarantees on workers’ rights. The move infuriated anti-Brexit MPs pushing for Labour to back giving the public the final say on Brexit, with two suggesting they were considering quitting the party over the issue. Owen Smith, who stood against Mr Corbyn for the party leadership in 2016, said Labour should be opposing the “disaster” that is Brexit.

Asked if Mr Corbyn’s letter paved the way for Labour MPs to support a Brexit deal put forward by Ms May, he told BBC 5Live: “I think that’s probably right. My fear is that this is the leadership rolling the pitch for accepting a version of Theresa May’s deal, and I think that will be at odds with our values and damaging to our country and damaging to the politics that we’ve traditionally believed it. “Brexit is a right-wing ideological project and we should be opposing it on those terms.”

Read more …

And by then, why bother?

Brexit Deal May Not Be Put To MPs Until Late March (G.)

The Brexit negotiations are being pushed to the brink by Theresa May and the EU, with any last-minute offer by Brussels on the Irish backstop expected to be put to MPs just days before the UK is due to leave. In strained talks on Thursday, during which Donald Tusk suggested that Jeremy Corbyn’s plan could help resolve the Brexit crisis, Theresa May and the European commission president, Jean-Claude Juncker, agreed to hold the next face-to-face talks by the end of February. That move cuts deep into the remaining time, piling pressure on the British parliament to then accept what emerges or face a no-deal scenario.

It is understood that EU officials are looking at offering May a detailed plan of what a potential technological solution to the Irish border might look like, which could be included in the legally non-binding political declaration on the future trade deal. The blueprint would pinpoint the problem areas and commit to breaching the technical gaps where possible to offer an alternative to the customs union envisaged in the withdrawal agreement’s Irish backstop. But officials believe it is increasingly likely that any renegotiated deal will only be put to the Commons at the end of March, necessitating even then an extension of the article 50 negotiating period to get legislation through parliament.

On Thursday the German finance commissioner, Günther Hermann Oettinger, suggested the chance of a no-deal Brexit was now as high as 60%. “If the British side asks for an extension of two or three months and there are reasons for that, I think there’s a good chance that the member states would accept that unanimously,” he said. “But in the eight or 12 weeks there needs to be the possibility of achieving progress and that there must be a withdrawal agreement at the end of that.”

Read more …

Old paradigms are dying everywhere. Given the state we find ourselves in, how bad can that be?

France Recalls Rome Envoy Over Worst Verbal Onslaught ‘Since The War’ (G.)

Paris has taken the extraordinary step of recalling its ambassador from Rome, in the worst crisis between the two neighbouring countries since the second world war. France blamed what it called baseless verbal attacks from Italy’s political leaders, which it said were “without precedent since world war two”. Italy’s two deputy prime ministers, the far-right Matteo Salvini and Luigi Di Maio of the populist, anti-establishment Five Star Movement, have in recent months criticised the French president, Emmanuel Macron, on a host of inflammatory issues, from immigration to the gilets jaunes (yellow vest) anti-government demonstrations.

Di Maio this week met leaders of the gilets jaunes seeking to run in May’s European parliament elections as he declared the “wind of change has crossed the Alps” and a “new Europe is being born of the yellow vests”. France said the comments were an unacceptable “provocation”. Announcing the immediate return to Paris of its ambassador for talks, the French foreign office said in a statement: “For several months, France has been the target of repeated, baseless attacks and outrageous statements. Having disagreements is one thing but manipulating the relationship for electoral aims is another. “All of these actions are creating a serious situation which is raising questions about the Italian government’s intentions towards France.”

Salvini responded by saying the Italian government did not want to fall out with France and suggested a meeting with Macron to fix the relationship. “I don’t want to row with anyone, I’m prepared to go to Paris, even by foot, to discuss the many issues we have,” he said. But, in a further dig at Macron, he said France must first address three issues: French police must stop pushing migrants back into Italy, end lengthy border checks blocking traffic and hand over around 15 Italian leftist militants who have taken refuge in France in recent decades.

Read more …

Macron with his sub-30% approval rating is not a threat.

Rome’s War Of Words With Macron May Prove Self-Defeating (G.)

Diplomatic etiquette would normally classify the recall of an ambassador for “consultations” as a middle-order symbol of displeasure. During the cold war, the summoning, or withdrawal, of an ambassador was mundane. More recently, Hungary pulled its ambassador from the Netherlands in 2017, in response to criticism by the outgoing Dutch ambassador in Hungary. But for France to withdraw its ambassador to Rome for the first time since the second world war represents a genuine diplomatic shock. For two European powers to fall out to this extent shows how far European populists are prepared to break the rules. Only a fortnight ago, faced by persistent insults from Rome, the Elysée chose to take the high road, saying it would not enter a stupidity contest.

President Emmanuel Macron had also promised not answer back, saying that is what the Italian populists wanted. But faced by Italian deputy prime minister Luigi Di Maio’s repeated courting of leaders of the gilet jaunes (yellow vests) protests that have repeatedly sparked violence in Paris, French patience snapped. It marks an extraordinary collapse in Franco-Italian relations since the recent high water mark of January 2018 when Macron signed a bilateral treaty of friendship alongside Italy’s previous prime minister, Paolo Gentiloni. That was only two months before the Italian elections in May. Macron had signed the treaty partly to reassure the Italians that Paris would not only face toward Berlin after Brexit.

But perhaps the seeds of the collapse were sown the day the treaty was signed. In Rome, Macron could not resist saying he hoped the Italians in their elections would make a pro-European choice – advice that Italians, fixated by migration from Libya, totally ignored by bringing a populist coalition government to power. [..] Italy, in recession and heading for only 0.2% growth this year, will need some allies in Europe and in Brussels. Its banking system remains undercapitalised. The Five Star Movement is determined to show it is on the side of the people, and not the bankers, but translating that emotion into practical budgetary policy is proving difficult. Insults by contrast come easier, and cheaper.

Read more …

Oh, well, it’s just cars.

Fiat Chrysler Shares Plummet 12% On Weak Outlook (CNBC)

Fiat Chrysler shares crashed by nearly 12 percent Thursday after the Italian-American automaker forecast a weak outlook for 2019. The automaker said it expects results in the first half of the year to be down over last year, in part because the company will not be selling two generations of the Jeep Wrangler side-by-side, as it did in 2018. It is also planning some Wrangler production downtime to retool factories for launch of the plug-in hybrid version of the iconic off-road machine in early 2020. The company also said continued actions to manage dealer inventories will hit its finances in the first half of the year. It is also facing higher-than-expected capital expenditures, shelling out roughly €500 million in connection with U.S. diesel emissions cases. It’s also paying an effective tax rate that’s about 25% higher than it was in 2018, mostly due to changes in the US.

Read more …

Best English must be Jamaican. Shows that languages are alive.

‘Globish’: Why France Has A Love-Hate Relationship With Global English (G.)

French writers were up in arms this week after the Salon du Livre book fair in Paris announced a celebration of young adult books that would feature a “Bookroom”, a “Photobooth”, and even a “Bookquizz”, a prospect so exciting it needs two zs. Such anglicisms, critics wrote, were an “unconscionable act of cultural vandalism”, employing the “sub-English known as Globish”. It is a lamentable irony, then, that Globish has been so energetically popularised by a Frenchman. In 2004, the former IBM executive Jean-Paul Nerrière began selling his system of simplified English (only 1,500 words) to students around the world. (Globish is a portmanteau of “globe” and “English”.)

The earliest attested use of the term, however, described in 1997 a more natural linguistic hybridisation of various “non-western forms of English” that had become just as “creative and lively” as the standard tongue. “Globish” is therefore both a trademark for one man’s singular vision of international communication, and a way of describing the branching of English into multiple exotic planetary species. But the literary Parisians see it simply as yet more Anglo-Saxon cultural imperialism. Well, as the French do sometimes say, c’est la life.

Read more …

A widespread idea, singling out Trump is not very useful.

Trump’s Absurd Claim that Americans Are Free from Government Coercion (Bovard)

In his State of the Union address Tuesday night, President Trump received rapturous applause from Republicans for his declaration: “America was founded on liberty and independence — not government coercion, domination, and control. We are born free, and we will stay free.” But this uplifting sentiment cannot survive even a brief glance at the federal statute book or the heavy-handed enforcement tactics by federal, state, and local bureaucracies across the nation. In reality, the threat of government punishment permeates Americans’ daily lives more than ever before: The number of federal crimes has increased from 3 in 1789 to more than 4000 today.

Congress has criminalized “transporting alligator grass across a state line; unauthorized use of the slogan ‘Give a hoot, don’t pollute’; and pretending to be a 4-H club member with intent to defraud,” as the Buffalo Criminal Law Review noted. Law enforcement agencies arrested over 10 million people in 2017— roughly three percent of the population. Trump momentarily noticed the existence of government coercion last month when he complained about the FBI using “29 people” and “armored vehicles” for the arrest of Roger Stone. But SWAT teams conduct up to 80,000 raids a year, according to the ACLU, mostly for drug arrests or search warrants. Many innocent people have been killed in such raids.

Trump on Tuesday highlighted the case of Alice Johnson, unjustly sentenced to life in prison for a nonviolent drug offense. Trump’s commutation of her sentence is no consolation to the targets of 1.6 million drug arrests in 2017 – and it is not like those individuals showed up voluntarily at police stations asking to be “cuffed-and-stuffed.” More people are arrested for marijuana offenses than for all violent crimes combined, according to FBI statistics. No coercion? Tell that to the scores of thousands of victims of asset forfeiture laws, which entitle law enforcement to confiscate people’s cash, cars, and other property based on the flimsiest accusation.

Federal law-enforcement agencies seized more property via asset forfeiture provisions in 2014 year than all the burglars stole from homeowners and businesses nationwide. Since 1970, the number of people confined in American prisons has increased by over 500 percent. Almost 10 percent of all American males will end up in prison at some point in their lives, according to an a 1997 Justice Department report. More than 10 percent of black males aged 20 to 34 were behind bars as of 2006, according to the Journal of American History.

Read more …

Jay Powell flew over the cuckoo’s nest.

Albert Edwards: Negative Rates, 15% Budget Deficits And Helicopter Money (ZH)

Earlier this week, when the San Fran Fed published a paper that suggested that the recovery would have been stronger if only the Fed had cut rates to negative, we proposed that this is nothing more than a trial balloon for the next recession/depression, one in which the Federal Reserve will seek affirmative “empirical evidence” that greenlights this unprecedented NIRPy step (in addition to QE of course). Today, in his latest note to clients after returning from a 2 week vacation in Jamaica, SocGen’s Albert Edwards picks up on this point and cranks it up to 11 writing that “as central banks thrash around for new tools, I have long thought the next recession would trigger the adoption of helicopter money and deeply negative Fed Funds. Clients have been sceptical of the latter because of the negative impact on bank margins, but now I am more convinced than ever that we will see negative Fed Funds.”

Predictably, Edwards takes aim at the SF Fed “analysis”, writing that “just because the San Fran Fed has published this paper doesn’t mean the Washington Fed will adopt the policy in the next recession, but with this economic cycle clearly now in its final act, one can sense that a number of trial balloons are being floated on what the Fed might do in the next recession. This is just one of them.” More to the point, Edwards also focuses on the recent resurgence of interest in Modern-Money Theory, i.e., MMT, or government-mandated helicopter money, which is predictably a “theory” espoused by socialists everywhere most notably Bernie Sanders and his economic advisors…

… and writes that “many of the more radical Democrats in the US seem to be adopting the idea and since I expect the US budget deficit to soar to 15% of GDP in the next recession, the ideas of MMT will surely become even more popular.” Edwards is convinced that “the Fed and other central banks will be desperate enough to adopt outright monetisation (aka helicopter money, that is to say the direct central bank financing of public sector deficits) in the next recession. And as that will coincide with public sector deficits in the mid teens, we will be conducting a live MMT experiment. Welcome to a brave new world!”

Read more …

If there’s anything that typifies how today’s institutions view the world, it must be that they see themselves in the frontline fighting against the problems they first caused.

Fed’s Powell On The Biggest Challenge Over The Next Decade (CNBC)

Sluggish productivity and widening wealth gap are the biggest challenges facing the U.S. over the next decade, Federal Reserve Chairman Jerome Powell said Wednesday. Speaking at a town hall in Washington D.C. to a group of educators, the central bank leader said his greatest economic fears lie outside the Fed’s purview. Specifically, he called for more aggressive policies to address income inequality. Wages at the middle and lower levels have “grown much more slowly” than those at the higher end, he said. “We want prosperity to be widely shared. We need policies to make that happen,” Powell added.

For the chairman, the forum was a chance to take some lighter questions — he revealed that to relax he plays guitar and rides his bicycle — but he also turned serious when addressing the issues of the future. Powell stressed the importance of increasing labor force participation and improving mobility between income classes, which is an area where he said the U.S. has lagged in recent years. “That’s not our self-image as a country, nor is it where we want to be,” he said. “There are policies that we need to do that everyone should be able to agree on that will change mobility, improve people’s chances and enable people to better take part in the workforce of the future,” Powell added.

Read more …

Jan 242019
 


René Magritte The black flag 1937

 

One thing I am not is an expert on Venezuela. What I know is the country has the world’s largest oil reserves, mainly in the Orinoco Belt, but they come in a form of tar sands that while they are not as hard to exploit as Canada’s (viscosity), they’re far from easy, and buried deep. And I know Venezuela had Hugo Chávez as its president, who, for a socialist, was quite successful at what he did (depending who you ask).

And I know of course that the US yesterday recognized an opposition leader, Juan Guaido, as the ‘real’ president of Venezuela, instead of the elected Nicolas Maduro, whom Chávez picked as his successor. Soon as I read that, I thought: CIA. If Chávez, and Maduro, are hated in one place in the world, look no further than Langley, Virginia.

So I looked up a few articles I though would be interesting to read. The first comes from a site called Venezuela Analysis, an entity recommended for Venezuela news. They had the article below, but also this enlightening picture:

Note: in 2002, coincident with the attempted coup against Chávez, half the employees at state oil company PDVSA went on strike. They must have felt like clowns, too, 48 hours later.

The article explains what happened in terms you can find everywhere (but are perhaps good to note), except for the last bit:

 

Venezuelan Opposition Leader Guaido Declares Himself President, Recognized by US and Allies

Opposition leader Juan Guaido swore himself in as “interim president” of Venezuela on Wednesday, a move which was immediately recognized by the United States and regional allies. “As president of the National Assembly, before God and Venezuela, I swear to formally assume the competencies of the national executive as interim president of Venezuela,” he declared before an opposition rally in eastern Caracas.

Guaido had already proclaimed on several occasions that he was “ready” to assume the responsibilities of the executive branch, as the US was reportedly considering recognizing him as “interim president.” US authorities reacted swiftly, with President Donald Trump, Secretary of State Mike Pompeo and Senator Marco Rubio immediately voicing their recognition of Guaido as Venezuela’s interim president.

“I will continue to use the full weight of United States economic and diplomatic power to press for the restoration of Venezuelan democracy,” Trump said in a statement. Washington’s regional allies, including Canada, Brazil, Argentina, Colombia and other members of the so-called Lima Group, were quick to follow suit, giving their backing to the 35-year-old opposition politician.

The Lima Group had set the tone in early January with a statement refusing to recognize Maduro’s second term. Meanwhile, Cuba and Bolivia expressed their support for Maduro, while Uruguay and the new Lopez Obrador government in Mexico refused to recognize Guaido as president and called for dialogue to “avoid an escalation of violence.” Russia and Turkey likewise indicated that their relations with Maduro administration were unchanged.

This last paragraph may be the most important and revealing bit of news we see today:

[..] Torino Capital Chief Economist Francisco Rodriguez, who advised defeated opposition presidential candidate Henri Falcon last year, wrote on Twitter that the recognition from the Trump administration makes it possible for Guaido, or a presumed transition government, to take charge of Venezuelan assets on US soil, such as state oil company PDVSA’s largest subsidiary, CITGO. It could also prevent the Venezuelan government from invoicing payments for oil shipments.

Without CITGO life becomes hard for Maduro, very hard. The company has extensive refining and chemicals capacity in the Houston area, but the US hasn’t been able to touch it until now. If they get enough allies to recognize their CIA puppet as president, they can close it down, sell it off to Exxon, anything they want. But we’re not there yet.

Russia has been very outspoken in its opinions about what’s going on. Its Rosneft oil company has large assets in Venezuela. Just like China has huge loans outstanding in the country. And though it’s hard to gauge how strong the people’s support is for Maduro (don’t believe everything you read), there’s no doubt where the army stands. The whole top brass was on TV today pledging loyalty to the government.

Turkey also came out strong in favor of Maduro. A Turkish site named Yeni Safak talks about social media as an intelligence tool:

 

CIA Launches Media Campaign To Ignite Protests Against Venezuela’s Maduro

The CIA is backing Washington’s decision to recognize Venezuela’s opposition leader Juan Guaido as president by manipulating the public opinion against democratically-elected President Nicolas Maduro and the legitimate government over social media platforms. [..] Millions of posts designed to instigate Venezuelans against the country’s legitimate president, Nicolas Maduro, were shared in a very short time to kindle a social unrest against Maduro.

Assoc. Prof. Dr Levent Eraslan unveiled the striking details of the U.S’s perception and deception strategies [..] Stressing the U.S. national intelligence’s strategy report in 2019 that consists Pentagon’s intervention in Venezuelan politics, Eraslan said, “The role of ‘machine learning’ and providing data to decision makers by determining political instabilities through social media were emphasized in the report.”

Noting that thousands of tweets that have been shared from different accounts in the last two days, “People are being called to take streets to overthrow the elected president. The efforts to trigger rebellion and push this process into a bloody situation through social media networks such as Twitter, YouTube, and Facebook can be observed,” he concluded.

This is from Volkan at DutchTurks; nothing is new (except Facebook as a regime change instrument):

 

 

Hugo Chávez was president of Venezuela from 1999 to his death of cancer in 2013. Whatever you may think of the man, and you don’t have to think hard to know what the CIA thought of him, have you ever wondered why the rampant runaway inflation the country has suffered lately, and which has been blamed by many on ‘socialism’, was not happening while socialist Chávez was alive? This from a site named War Is Boring provides at least some ideas as to why.

 

To Understand Venezuela’s Crisis, Look to the Past … and the CIA

Chavez died of cancer in 2013, and now five years later it seems that his socialist dream, like Allende’s, has failed. Under his successor Pres. Nicolas Maduro, Venezuela has descended into economic and political chaos. Hyperinflation has beset the country, with prices rising at an annualized rate of 1,000,000 percent.

Shortages of basic necessities such as toilet paper and bread have caused mass unrest, culminating in violent protests. Now there is open talk about the need to overthrow Maduro or remove him from power, perhaps through U.S. military intervention.

[..] In Venezuela the figure of Chavez precluded an overthrow of the government there. We know this for a fact because a coup against him in 2002 lasted a matter of hours before mass uprisings and a lack of support from the military forced the plotters to surrender. Chavez was a controversial figure, hated by significant elements of Venezuelan society, but beloved by a majority of the largely poor country and respected by the military.

Chavez announced the return of his cancer in the fall of 2012 and died in March 2013. The current economic crisis kicked into high gear in the late summer of 2012, with inflation — typically high, but manageable — suddenly growing at an exponential rate. The cause typically cited by Western media — a precipitous fall in oil prices — occurred a full two years after the crisis began.

 

[..] Since 2012 Venezuela has faced a twin plague of shortages and rampant inflation. Venezuelan economist Pasqualina Curcio makes the case in her 2016 book The Visible Hand of the Market: Economic Warfare in Venezuela that both phenomena cannot be explained through normal economics, but rather by political causes.

Shortages have been a feature of Venezuelan life since Chavez came to power in 1999, with their magnitude growing over time. Yet over the course of years when Venezuela saw steadily and then sharply increasing shortages both imports and domestic production were also rising. If more products are being brought into the country, and more are being produced, but consumers are experiencing shortages, it begs the question of where the stuff went.

[..] As for inflation, the factors typically involved with currency devaluation–a shortage of foreign reserves or increased liquidity–have not coincided with inflation spikes. Nor has the state hoarded foreign currency as many claim. Curcio shows that 94 percent of foreign reserves were distributed to the private sector, and these distributions have grown over time.

It appears that manipulation of currency black markets — a phenomenon that happened in Chile under Allende as well — and then adoption of this inflated exchange rate by importers to spike the costs of necessary goods, services, and industrial inputs neatly produces the sort of induced inflation plaguing Venezuela today.

Russian foreign minister Lavrov put it nice and succinctly:

The US, which is paranoid about somebody interfering in their elections, even though they have no proof of that, themselves are trying to rule the fates of other peoples. What they actually do is interfere in their internal affairs. There is no need for [US special counsel Robert] Mueller to determine that.

American regime change in other countries is something that perhaps the rest of the world is getting tired of. America instigating chaos in its own southern backyard, like it has for years in the Middle East and North Africa, is getting old in the eyes of many. And the CIA can get Trump to support their puppet, but Trump knows nothing about Venezuela, other than that there’s lots of oil there, and that makes him a CIA puppet too.

Not a good idea.

A lot of what has led up to the present coup has been the US flexing its financial muscle. But the American economy isn’t doing all that great, so it’s not just flexing that muscle, it’s also stretching it. And yeah, there’s an old set of Venezuelan domestic interests that has been faithful, just like there was one in Cuba, but that’s all in the past. That was way back when the US could get away with bullying the whole neighborhood.

And it shouldn’t want to do that anymore. Neither the bullying nor the living in the past.

Not good ideas either.

 

 

Nov 112018
 
 November 11, 2018  Posted by at 10:39 am Finance Tagged with: , , , , , , , , , , ,  2 Responses »


Paul Gauguin Christ in the garden of olives 1889

 

China Can Never Allow Its Housing Bubble To Burst (ZH)
One Thing Unites Britain (O.)
Four UK Ministers On Verge Of Quitting, EU Rejects Latest Plan (R.)
Top Tory Says Theresa May Is ‘Handing Power To EU’ In Brexit Deal (G.)
Khashoggi Murder Fails To Stop Britain Selling Arms To The Saudis (O.)
Saudi Arabia Wants To Cut OPEC Allies Oil Output By Up To 1 Million Bpd (R.)
Court Clears Rome’s Mayor Of Cronyism And Abuse Of Power (G.)
2 Koreas Complete The Disarming Of 22 Guard Posts (AP)
Moorside’s Atomic Dream Was An Illusion. Renewables Are The Future (G.)
Next Generation ‘May Never See The Glory Of Coral Reefs’ (G.)
Why Women Have Better Sex Under Socialism (G.)

 

 

50 million empty apartments. ‘Real’ estate holds 75% of Chinese private ‘assets’. There can hardly be a more dangerous concept for the global economy.

China Can Never Allow Its Housing Bubble To Burst (ZH)

Back in 2017, we explained why the “fate of the world economy is in the hands of China’s housing bubble.” The answer was simple: for the Chinese population, and growing middle class, to keep spending vibrant and borrowing elevated, it had to feel comfortable and confident that its wealth would keep rising. However, unlike the US where the stock market is the ultimate barometer of the confidence boosting “wealth effect”, in China it has always been about housing as three quarters of Chinese household assets are parked in real estate, compared to only 28% in the US, with the remainder invested financial assets. Beijing knows this, of course, which is why China periodically and consistently reflates its housing bubble, hoping that the popping of the bubble, which happened in late 2011 and again in 2014, will be a controlled, “smooth landing” process.

For now, Beijing has been successful in maintaining price stability at least according to official data, allowing the air out of the “Tier 1” home price bubble which peaked in early 2016, while preserving modest home price appreciation in secondary markets. How long China will be able to avoid a sharp price decline remains to be seen, but in the meantime another problem faces China’s housing market: in addition to being the primary source of household net worth – and therefore stable and growing consumption – it has also been a key driver behind China’s economic growth, with infrastructure spending and capital investment long among the biggest components of the country’s goalseeked GDP.

One result has been China’s infamous ghost cities, built only for the sake of Keynesian spending to hit a predetermined GDP number that would make Beijing happy. Meanwhile, in the process of reflating the latest housing bubble, another dire byproduct of this artificial housing “market” has emerged: tens of millions of apartments and houses standing empty across the country. According to Bloomberg, soon-to-be-published research will show that roughly 22% of China’s urban housing stock is unoccupied, according to Professor Gan Li, who runs the main nationwide study. That amounts to more than 50 million empty homes.

Read more …

Britain is shrinking away from not just Europe, but the world, unable to focus on anything other than its domestic squabbles.

One Thing Unites Britain (O.)

[..] Theresa May has always hung on in the belief that, when it came to the crunch moment, when a deal was on offer that would take the UK out of the EU on 29 March next year, her party and the country would unite sufficiently behind her to allow a withdrawal agreement to pass through parliament. The country would rally behind her vision of Brexit. But instead, as people become more aware of what leaving the EU entails, many MPs believe the reverse may be happening. [..] With more Tory Remainers and Leavers now opposing her, May’s task is daunting. Downing Street’s immediate task is to get her deeply split cabinet to unite around the final unresolved element of a potential deal with the EU: the legally complex issue of how to avoid a hard border between Northern Ireland and the Republic after Brexit.

Downing Street knows it is in a race against time. May is desperate to put a motion before the House of Commons before Christmas, in the hope that, somehow, it will pass. No 10 has pencilled in a cabinet meeting for early this week, probably on Tuesday. But disagreements remain among her most senior ministers over how the UK would exit from the so-called “backstop” agreement, under which the whole of the UK would remain in the EU customs union until a final UK-EU trade deal is struck. Several cabinet ministers are unhappy with what they fear will be fudged wording in the withdrawal agreement that fails to chart a clear path to exit the backstop. They want to see the full legal advice and want guarantees that the EU will not be able to prevent the UK breaking free from its system once and for all, so that it can strike its own trade deals.

Read more …

It’s still the Irish hard border. And they’re still no closer to a solution.

Four UK Ministers On Verge Of Quitting, EU Rejects Latest Plan (R.)

Four British ministers who back remaining in the European Union are on the verge of quitting Theresa May’s government over Brexit, the Sunday Times reported, as pressures built on the prime minister from all sides. The newspaper also said that the European Union had rejected May’s plan for an independent mechanism to oversee Britain’s departure from any temporary customs arrangement it agrees. The newspaper sourced the development to British sources, and not sources in the EU team. May is trying to hammer out the final details of the British divorce deal but the talks have become stuck over how the two sides can prevent a hard border from being required in Ireland.

Britain has proposed a UK-wide temporary customs arrangement with the EU to resolve the issue but Brexiteers in her party want London to have the final say on when that arrangement would end, to prevent it from being tied indefinitely to the bloc. A senior cabinet minister was quoted in the paper as saying: “This is the moment she has to face down Brussels and make it clear to them that they need to compromise, or we will leave without a deal.” An EU diplomat told Reuters earlier on Saturday that they were cautiously hopeful that an EU summit could happen in November to endorse the deal but that the volatile situation in Britain made it very difficult to predict.

Read more …

Well, May herself doesn’t appear to know what to do with that power.

Top Tory Says Theresa May Is ‘Handing Power To EU’ In Brexit Deal (G.)

Theresa May was accused last night by a former cabinet colleague of planning the “biggest giveaway of sovereignty in modern times”, as she faced a potentially devastating pincer movement from Tory remainers and leavers condemning her Brexit plans. The day after Jo Johnson, the pro-remain brother of former foreign secretary Boris Johnson, resigned from the government and called for a second referendum on Brexit, former education secretary Justine Greening launched an attack on the prime minister, saying her plans would leave the country in the “worst of all worlds”. Piling yet more pressure on May, Greening – who resigned from the cabinet in January – backed the former transport minister’s call for another public vote and said MPs should reject the prime minister’s deal.

Greening told the Observer: “The parliamentary deadlock has been clear for some time. It’s crucial now for parliament to vote down this plan, because it is the biggest giveaway of sovereignty in modern times. “Instead, the government and parliament must recognise we should give people a final say on Brexit. Only they can break the deadlock and choose from the practical options for Britain’s future now on the table.” Greening added: “Like many of us, Jo Johnson is a pragmatist on Britain’s relationship with the EU. But Conservative MPs can increasingly see that this sovereignty giveaway from No 10 leaves our country with less say over rules that govern our lives … That is not in the national interest, it’s the worst of all worlds and it resolves nothing.”

Read more …

Even as the UK has also received the audio from Turkey.

Khashoggi Murder Fails To Stop Britain Selling Arms To The Saudis (O.)

Britain has pursued its assiduous courtship of Saudi Arabia despite the murder of the journalist Jamal Khashoggi, with diplomats and Ministry of Defence officials meeting their counterparts in the kingdom to discuss closer economic, military and political ties. The discussions have taken place as Britain enters the final phase of negotiations to sell more Typhoon jets to Riyadh. They are similar to those used in the Saudi-led bombing of Yemen in a war that has caused a humanitarian disaster.

Britain sells billions of pounds of weapons to the countries bombing Yemen and is keen to strengthen its ties after Brexit. In July last year, the government confirmed it had created a dedicated Gulf region working group to promote “high-level dialogue with key trading partners to progress our trade and investment relationships”. Since then, civil servants have regularly visited the region for confidential talks to prepare for future deals once Britain leaves the European Union. A delegation from the Department for International Trade visited the Eastern Province chamber of commerce in Dammam in Saudi Arabia on 2 October – the day Khashoggi was murdered.

Alastair Long, the UK’s deputy trade commissioner for the Middle East and director of trade for Saudi Arabia, stressed that Britain was keen to create alternative markets and that Saudi Arabia “is at the head of these markets”. On 31 October, another UK government delegation visited Riyadh for a meeting with the Gulf Cooperation Council secretariat. A press release from the council said the meeting discussed expanding “the horizons of political, security, military and commercial cooperation”

Read more …

Much discussed before: smaller producers have only one reaction to falling prices: produce more (if they can).

Saudi Arabia Wants To Cut OPEC Allies Oil Output By Up To 1 Million Bpd (R.)

Saudi Arabia is discussing a proposal to cut oil output by up to 1 million barrels per day by OPEC and its allies, two sources close to the discussions told Reuters on Sunday. The sources said the discussions were not finalized as much depended on the reduction in Iranian exports. “There is a general discussion about this. But the question is how much is needed to reduce by the market,” one of the sources said, speaking in Abu Dhabi where a market monitoring committee is due to be held on Sunday, attended by top exporters Saudi Arabia and Russia.

Asked by reporters in Abu Dhabi if the market is in balance, Saudi Energy Minister Khalid Al-Falih said: “We will find out. We have our meeting later.” Al-Falih last month said there could be a need for intervention to reduce oil stockpiles after increases in recent months. The United States this month imposed sanctions curtailing Iran’s oil exports as part of efforts to curb Tehran’s nuclear and missile programs as well as its support for proxy forces in Yemen, Syria, Lebanon and other parts of the Middle East.

Read more …

Smearing M5S has become less easy.

Court Clears Rome’s Mayor Of Cronyism And Abuse Of Power (G.)

The Rome mayor, Virginia Raggi, has been cleared of cronyism and abuse of power after a judge ruled that the alleged offence did not constitute a crime. Prosecutors had called for a 10-month jail term over allegations that Raggi, from the anti-establishment Five Star Movement, lied to investigators over the appointment of Renato Marra, the brother of one of her close aides, as Rome’s tourism chief. His brother Raffaele, the former head of staff at Rome city hall, faces separate corruption allegations. The accusations emerged not long after Raggi was elected as Rome’s first female mayor in June 2016. Had she been convicted she would have been forced to resign as mayor, in line with the Five Star Movement’s code of ethics.

She wept upon hearing the ruling, saying afterwards: “This sentence wipes out two years of mud-slinging. We’ll go forward with our heads held high for Rome, my beloved city, and for all citizens.” Luigi Di Maio, the Five Star Movement leader and Italy’s deputy prime minister, celebrated the court ruling while using the opportunity to criticise journalists whom he accused of “attacking Italy’s most massacred mayor” for two years and generating “fake news” to bring her down. “Go Virginia! I am happy for always having defended you and believed in you,” he wrote on Facebook.

Read more …

There are people who genuinely want peace. Get out of their way.

2 Koreas Complete The Disarming Of 22 Guard Posts (AP)

The North and South Korean militaries completed withdrawing troops and firearms from 22 front-line guard posts on Saturday as they continue to implement a wide-ranging agreement reached in September to reduce tensions across the world’s most fortified border, a South Korean Defense Ministry official said. South Korea says the military agreement is an important trust-building step that would help stabilize peace and advance reconciliation between the rivals. But critics say the South risks conceding some of its conventional military strength before North Korea takes any meaningful steps on denuclearization — an anxiety that’s growing as the larger nuclear negotiations between Washington and Pyongyang seemingly drift into a stalemate.

South Korea reportedly has about 60 guard posts — bunker-like concrete structures surrounded with layers of barbed-wire fences and manned by soldiers equipped with machine guns — stretched across the ironically named Demilitarized Zone. The 248-kilometer (155-mile) border buffer peppered with millions of land mines has been the site of occasional skirmishes between the two forces since the 1950-53 Korean War. The North is believed to have about 160 guard posts within the DMZ.


In this Nov. 4, 2018, photo provided by South Korea Defense Ministry, a yellow flag is raised at a guard post of South Korea in the demilitarized zone, South Korea. A South Korean Defense Ministry official said on Saturday, Nov. 10, 2018, the North and South Korean militaries have completed withdrawing troops and firearms from 22 front-line guard posts as they continue to implement a wide-ranging agreement reached in September to reduce tensions. The flag marks the post that is to be dismantled so that each side can observe the work in progress.

Read more …

Sorry, but no. Using much less energy of any kind is the future. Voluntarily or forced. That’s what we should prepare our societies for.

Moorside’s Atomic Dream Was An Illusion. Renewables Are The Future (G.)

Toshiba’s decision to pull out of building a nuclear power station in Cumbria last week will cause shockwaves far beyond the north-west of England. The outcome is a disaster for the surrounding area, which is heavily reliant on the nuclear industry for jobs and prosperity. Local politicians admit it is a blow and a disappointment for Cumbrians hoping for roles at the proposed Moorside plant. They say they genuinely believe a new buyer for the site will come forward. But that looks like wishful thinking. To an extent, the demise of Moorside can be attributed to problems with it as a specific project. It has looked doomed since Toshiba’s US nuclear unit, Westinghouse, declared bankruptcy in 2017 and the company ruled out new nuclear investments outside of Japan.

Efforts to woo the South Korean energy company Kepco as a buyer then floundered. The executive leading the sale for Toshiba blamed the failure to find a buyer on being “caught between a series of unplanned and uncontrollable events”. But the end of Moorside is also emblematic of the wider challenges that new nuclear faces. It took a decade from Tony Blair signalling the UK’s renewed interest in nuclear power in 2006 for France’s EDF Energy and the British government to sign a generous subsidy deal and green-light Hinkley Point C, the UK’s first new nuclear plant in a generation. In all likelihood, it will not be generating electricity until 2027. Ministers insist new nuclear power stations are still an essential way of hitting the country’s greenhouse gas emission targets and providing energy security as old plants are switched off in the 2020s.

Losing Moorside means there are just five other new nuclear projects planned, including Hinkley Point C. Eyes will now turn to Hitachi’s proposed Wylfa Newydd plant on Anglesey. The project is the furthest along the line after Hinkley, but it’s far from a done deal. The new nuclear drive was meant to be solely funded by the private sector, but the government has already made a striking exception in the case of Wylfa. Ministers have promised Hitachi they will use public money to take a £5bn stake in the scheme. Such a dramatic U-turn on policy is explained by the fact that Wylfa is about more than the UK’s desire for new nuclear: it is also about cooperation with Tokyo and bringing forth other investment from Japanese firms, such as carmakers, after Brexit.

Read more …

We get the drift, but we also know only a small part of 1 or 2 generations of mankind have ever ‘seen’ coral reefs. And most people only do ‘see’ them in pics and movies. You might want to think about that. it’s definitely not about you ‘seeing’ coral reefs or rhino’s or orangutans. It’s about something else.

Next Generation ‘May Never See The Glory Of Coral Reefs’ (G.)

Children born today may be the last generation to see coral reefs in all their glory, according to a marine biologist who is coordinating efforts to monitor the decline of the world’s most colourful ecosystem. Global heating and ocean acidification have already severely bleached 16 to 33% of all warm-water reefs, but the remainder are vulnerable to even a fraction of a degree more warming, said David Obura, chair of the Coral Specialist Group in the International Union for the Conservation of Nature. “It will be like lots of lights blinking off,” he told the Observer. “It won’t happen immediately but it will be death by 1,000 blows. Between now and 2 degrees Celsius, we will see more reefs dropping off the map.”

Obura added: “Children born today may be the last generation to see coral reefs in all their glory. Today’s reefs have a history going back 25 million to 50 million years and have survived tectonic collisions, such as that of Africa into Europe, and India into Asia. Yet in five decades we have undermined the global climate so fundamentally that in the next generation we will lose the globally connected reef system that has survived tens of millions of years.”

Read more …

Headline obviously for effect. But interesting theme. Still, is it capitalism that is to blame for suppressing women, or patriarchy?

Why Women Have Better Sex Under Socialism (G.)

This book has a simple premise: “Unregulated capitalism is bad for women,” Kristen Ghodsee argues, “and if we adopt some ideas from socialism, women will have better lives.” Ghodsee is an ethnographer who has researched the transition from communism to capitalism in eastern Europe, with a particular focus on gender-specific consequences. “The collapse of state socialism in 1989 created a perfect laboratory to investigate the effects of capitalism on women’s lives,” she writes. Less regulated economies, she finds, place a disproportionate burden on women. Women subsidise lower taxes through their unpaid labour at home. Cuts to the social safety net mean more women have to care for children, the elderly and the sick, forcing them into economic dependence.

Ghodsee contends that without state intervention, the private sector job market punishes those who bear and raise children and discriminates against those who might one day do so. The government is better at ensuring wage parity across different groups than the private sector, and economies with more public sector jobs tend to have more gender equality, too. Women bear the brunt of capitalism’s cyclical instability, and are often the last to be hired and the first to be fired in economic downturns. They are paid less, they have less representation in government and, she writes, all of this affects their sexuality. The less economic independence women have, the more sexuality and sexual relationships conform to the marketplace, with those who are disadvantaged in the free market pursuing sex not for love or pleasure but for a roof over their heads, health insurance, or access to the wealth or status that capitalism denies them.

Read more …

Sep 042017
 
 September 4, 2017  Posted by at 7:38 am Finance Tagged with: , , , , , , , , , , ,  4 Responses »


Edouard Manet Jeanne Duval, Baudelaire’s Mistress, Reclining (Lady with a Fan) 1862

 

How To Make The Financial System Radically Safer (AM)
Funding Battle Looms As Texas Sees Harvey Damage At Up To $180 Billion (R.)
Canadians Are Borrowing Against Real Estate At The Fastest Pace Ever (BD)
China Battles “Impossible Trinity” (Rickards)
Socialism For The Best Of Us, Capitalism For The Rest Of Us (CC)
Britain’s Addicted To Debt And Headed For A Crash (G.)
Global Negative Yielding Debt Hits One Year High Of $7.4 Trillion (ZH)
Greece Property Auctions Certain To Drive Market Prices Even Lower (K.)
Italy FinMin Says The Euro Zone Still Faces Problems – Even In Germany (CNBC)
Italy’s 5-Star Says Euro Referendum Is ‘Last Resort’ (R.)
Turkey Will Never Become EU Member, Says Angela Merkel (Ind.)
How Our Immune Systems Could Stop Humans Reaching Mars (Tel.)

 

 

Take away the political power of central banks.

How To Make The Financial System Radically Safer (AM)

At the same time, the new financial reforms haven’t minimized risk. Moreover, they’ve set taxpayers – that’s you – up for a future fleecing. Congressman Robert Pittenger elaborated this fact in a Forbes article last year: “Even Dodd-Frank’s biggest selling point, that it would end “too big to fail,” has proven false. Dodd-Frank actually created a new bailout fund for big banks–the Orderly Liquidation Authority–and the Systemically Important Financial Institution designation enshrines “too big to fail” by giving certain major financial institutions priority for future taxpayer-funded bailouts.” What gives? Regulations, in short, attempt to control something by edict. However, just because a law has been enacted doesn’t mean the world automatically bends to its will. In practice, regulations generally do a poor job at attaining their objectives. Yet, they often do a great job at making a mess of everything else.

Dictating how banks should allocate their loans, as Dodd-Frank does, results in preferential treatment of favored institutions and corporations. This, in itself, equates to stratified price controls on borrowers. And as elucidated by Senator Wallace Bennett over a half century ago, price controls are the equivalent of using adhesive tape to control diarrhea. The dangerous conceit of the clueless… the house of cards they have built is anything but “safe” and they most certainly can not “fix anything”. Listening to their speeches that seems to be what they genuinely believe. A rude awakening is an apodictic certainty, but we wonder what or who will be blamed this time. Not enough regulations? The largely absent free market? As they say, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” (this quote is often erroneously attributed to Mark Twain: we think it doesn’t matter whether he created it, it is often quite apposite and this is a situation that certainly qualifies).

The point is that planning for future taxpayer-funded bailouts as part of compliance with destructive regulations is asinine. In this respect, we offer an approach that goes counter to Fed Chair Janet Yellen and the modus operandi of all central planner control freaks. It’s really simple, and really effective. The best way to regulate banks, lending institutions, corporate finance and the like, is to turn over regulatory control to the very exacting, and unsympathetic, order of the market. That is to have little to no regulations and one very specific and uncompromising provision: There will be absolutely, unconditionally, categorically, no government funded bailouts. Without question, the financial system will be radically safer.

Read more …

Want to bet it’ll be a lot more?

Funding Battle Looms As Texas Sees Harvey Damage At Up To $180 Billion (R.)

U.S. Treasury Secretary Steven Mnuchin on Sunday challenged Congress to raise the government’s debt limit in order to free up relief spending for Hurricane Harvey, a disaster that the governor of Texas said had caused up to $180 billion in damage. Harvey, which came ashore on Aug. 25 as the most powerful hurricane to hit Texas in more than 50 years, has killed an estimated 50 people, displaced more than 1 million and damaged some 200,000 homes in a path of destruction stretching for more than 300 miles (480 km). As the city of Houston and the region’s critical energy infrastructure began to recover nine days after the storm hit, the debate over how to pay for the disaster played out in Washington. Texas Governor Greg Abbott estimated damage at $150 billion to $180 billion, calling it more costly than Hurricanes Katrina or Sandy, which devastated New Orleans in 2005 and New York in 2012.

The administration of President Donald Trump has asked Congress for an initial $7.85 billion for recovery efforts, a fraction of what will eventually be needed. Even that amount could be delayed unless Congress quickly increases the government’s debt ceiling, Mnuchin said, as the United States is on track to hit its mandated borrowing limit by the end of the month unless Congress increases it. “Without raising the debt limit, I am not comfortable that we will get money to Texas this month to rebuild,” Mnuchin told Fox News. Republican lawmakers, who control both houses of Congress, have traditionally resisted raising the debt ceiling, but linking the issue to Harvey aid could force their hand with people suffering and large areas of the fourth-largest U.S. city under water. Beyond the immediate funding, any massive aid package faces budget pressures at a time when Trump is advocating for tax reform or tax cuts, leading some on Capitol Hill to suggest aid may be released in a series of appropriations.

Katrina set the record by costing U.S. taxpayers more than $110 billion. In advocating for funds to help rebuild his state, Abbott said damage from Harvey would exceed that. Houston Mayor Sylvester Turner said the city expected most public services and businesses to be restored by Tuesday, the first day after Monday’s Labor Day holiday. “Over 95% of the city is now dry. And I‘m encouraging people to get up and let’s get going,” Turner told NBC News. Even so, Houston mandated the evacuation of thousands of people on the western side of town on Sunday to accommodate the release of water from two reservoirs that otherwise might sustain damage. The storm stalled over Houston, dumping more than 50 inches (1.3 m) on the region. Houston cut off power to homes on Sunday to encourage evacuations. The area was closed off on Sunday and military vehicles were stationed on the periphery to take people out.

Read more …

What Canada learned from history.

Canadians Are Borrowing Against Real Estate At The Fastest Pace Ever (BD)

Canadian real estate prices have soared, and so did borrowing against that value. Our analysis of domestic bank filings from the Office of the Superintendent of Financial Institutions (OSFI) shows that loans secured against property has reached an all-time high. More surprising is the unprecedented rate of growth experienced this year.

Loans secured against residential real estate shattered a few records in June. Over $313.66 billion in real estate was used to secure loans, up 3.43% from the month before. The rise puts annual gains 11.16% higher than the same month last year, an increase of $31.51 billion. The monthly increase is the largest increase since March 2012. The annual gain is unprecedented according to an aggregate of domestic bank filings. Not all borrowing against residential property is all bad, sometimes it’s a calculated risk. For example, someone may need to secure a business loan, and use the loan for operating risks. It doesn’t mean the property is safe, but it’s a risk that could potentially boost the economy.

This is opposed to non-business loans, which is used as short-term financing. This type of financing is often used for things like renovations, and putting a fancy car in the driveway. Experts have observed that more homeowners are using these to prevent bankruptcy. Bottom line, it’s not typically healthy looking debt. So let’s remove loans obtained for business reasons, and take a peek at higher risk debt. The majority of these loans are non-business related according to bank filings. The current total is over $266 billion as of June 2017, a 1.01% increase from the month before. This is a 4.9% increase from the same month last year, which works out to $12.49 billion more. Fun fact, that’s around $23,763 per minute. The number is astronomical.

Read more …

“..no country can have an open capital account, a fixed exchange rate and an independent monetary policy at the same time..”

China Battles “Impossible Trinity” (Rickards)

The Impossible Trinity theory was advanced in the early 1960s by Nobel Prize-winning economist Robert Mundell. It says that no country can have an open capital account, a fixed exchange rate and an independent monetary policy at the same time. You can have one or two out of three, but not all three. If you try, you will fail — markets will make sure of that. Those failures (which do happen) represent some of the best profit-making opportunities of all. Understanding the Impossible Trinity is how George Soros broke the Bank of England on Sept. 16, 1992 (still referred to as “Black Wednesday” in British banking circles. Soros also made over $1 billion that day). The reason is that if more attractive total returns are available abroad, money will flee a home country at a fixed exchange rate to seek the higher return.

This will cause a foreign exchange crisis and a policy response that abandons one of the three policies. But just because the trinity is impossible in the long run does not mean it cannot be pursued in the short run. China is trying to peg the yuan to the U.S. dollar while maintaining a partially open capital account and semi-independent monetary policy. It’s a nice finesse, but isn’t sustainable. China cannot keep the capital account even partly closed for long without drying up direct foreign investment. Similarly, China cannot raise interest rates much higher without bankrupting state-owned enterprises. China is buying time until the Communist Party Congress in October. It’s important to realize that for Beijing, the Chinese economy is more than about jobs, goods and services. It’s a means of ensuring its legitimacy.

The Chinese regime is deeply concerned that a faltering economy and mass unemployment could threaten its hold on power. Chinese markets are wildly distorted by the actions of its central bank. Given the problems inherent in trying to manage an economy without proper price signals, the challenge facing Beijing gets harder by the day. China has a long history of violent political fracturing, and the government is deeply worried about regime survival if it stumbles. Many in the West fail to appreciate Beijing’s fears and overestimate the support it has among the disparate Chinese people. What does China do next? Under the unforgiving logic of the Impossible Trinity, China will have to either devalue the yuan or see its reserves evaporate. In the end, China will have to break the yuan’s peg to the dollar in order to stop capital outflows without killing the economy with high rates. The Impossible Trinity really is impossible in the long run. China will find this out the hard way.

Read more …

How do we make government independent?

Socialism For The Best Of Us, Capitalism For The Rest Of Us (CC)

To the elected darlings of the free market: I hate to burst your bubble but – you have been living a lie. Your lifetime government pensions: socialism. Overly generous retirement packages, Superannuation and 401ks: socialism. Travel budgets, expense accounts, access to private drivers and town cars, government reimbursement for travel and living arrangements: socialism, socialism, socialism, socialism, socialism. Central banking: socialism. Not to mention fossil-fuel & mining subsidies and tax concessions: socialism, socialism, socialism. The bank bail-outs of 2008: One of the greatest acts of socialism of all time. Where were our free-market representatives then? When the financial system went into melt-down, the banks were not told to suck it up and stand on their own two feet. More than a trillion dollars were poured into the banks, most of which went towards profit margins and CEO bonuses.

These so-called champions of capitalism have the nerve to claim that it is social welfare recipients that are a drain on the system while government representatives take home all kinds of state-provided benefits the rest of us could only dream of: the best health insurance the country has to offer, lifetime pensions and generous retirement packages which drain many more billions from the economy than social welfare ever will. Moreover, corporate welfare pales in comparison to either. The private sector has its own dole system paid for by Federal Governments. Yet many Congressmen, Representatives and MPs still have the nerve to stand before the people who elected them and rail against social spending, claiming people ought to pull themselves up by their bootstraps when no such obligation has ever existed for the corporate sector. Most of the world’s most successful corporations don’t get out of bed without a subsidy.

Read more …

If it makes you feel better: Britain’s not alone.

Britain’s Addicted To Debt And Headed For A Crash (G.)

[..] if the debtors at the bottom aren’t at crisis point yet, the signs of a surfeit of debt are everywhere. Alex Brazier, executive director of financial stability at the Bank of England, warned last month that consumer loans had gone up by 10% in the past year, with average household debt having already eclipsed 2008 levels. He warned against the economy having to sit through “endless repeats of the ‘Debt Strikes Back’ movie”. There is something obscurely insulting about being warned about household debt by the Bank of England. It never warns employers about stagnant wages, or the government about the benefit freeze. It only ever mentions these in terms of the impact of inflation, as if any consideration of the human decisions behind them are too political for comment. But personal debt, miraculously, isn’t political at all.

But that doesn’t make Brazier wrong. Edward Smythe of the campaign group Positive Money, breaks it down: “If you look at total outstanding consumer loans, in July, they’re at £200bn, an £18.5bn net increase every year.” Households spent more than their income by £17.5bn in the first quarter of this year. Economists are interested in where that money comes from – whether it’s access to credit, selling assets or spending savings. The government is presumably, in some dusty corner, interested in why that money is needed, whether it is a result of pauperised wages– real wage growth is negative and looks set to decrease – benefit changes, or some rush of blood to the head where we all suddenly need Sky Sports and cigarettes but aren’t prepared to work for them.

The sources of all this debt are changing: about half the net increase was in personal contract purchase car loans. Four in five new cars are now bought by PCP – an inherently unstable system that leaves both consumers and car manufacturers exposed. It’s a bit like a mortgage system for cars, except you don’t own it at the end, ideally you wouldn’t be living in it, and while a housing crash has been seen before, nobody yet knows what a car crash would look like. Student loan debt is counted separately from consumer loans, and stands at £13bn a year. However much you think you’ve accommodated student fees into your picture of Britons’ finances, it is always astounding to consider how life-changing that decision has been for the younger generation.

Read more …

“What global recovery?!”

Global Negative Yielding Debt Hits One Year High Of $7.4 Trillion (ZH)

Two weeks ago, we were surprised to find that despite the recent “growth promise” of what has been called a coordinated global recovery, the market value of bonds yielding less than 0% had quietly jumped by a quarter in just one month to the highest since October 2016. Since then, the paradoxical divergence between the reported “strong” state of the “reflating” global economy and the amount of negative yielding debt, has only grown, and as JPM reports as of Friday, Sept. 1, the global market value of government bonds trading with negative yield within the JPM GBI Broad index rose to $7.4 trillion, up 60% from its low of $4.6 trillion at the beginning of the year. Some more details from JPM:

We calculate the market value by multiplying the dirty price with the amount outstanding for each bond within JPM GBI Broad Index and then convert it to US dollars at today’s exchange rate. The market value of bonds trading with negative yield,including central banks’ purchases, stands at 30% of the total JPM GBI Broad index. What makes the latest rise in negative yielding debt especially bizarre is that it was mainly driven by Japan, where 10-year government bond yields have fallen significantly over the past month and have turned negative this week for first time since the US presidential election, even as the Bank of Japan has twice in the past month reduced the amount of JGB debt it purchases in the open market in the 5-to-10 year bucket, following on Friday, by a 30BN yen reduction of buying in the 3-to-5 year debt range.

As a result, the total universe of Japanese bonds trading with negative yield within the JPM global government bond index (GBI Broad) now stands at $4.6tr, or 62% of the outstanding amount. The remaining government bonds trading with negative yields worth $2.8 trillion are from Europe, of which more than half are from France and Germany.

Read more …

Capital destruction 101 (thanks, Schaeuble!):

“..the stock of unsold properties of all types comes to 270,000-280,000, in a market with no more than 15,000 transactions per year..”

BTW, the only buyers left are those who want to profit from Airbnb. Mostly foreigners.

Greece Property Auctions Certain To Drive Market Prices Even Lower (K.)

Professionals in the property sector are warning that the auctioning of tens of thousands of buildings in the next few years could evolve into an unknown – probably negative – factor regarding the course of prices in the market. It is estimated that a wave of auctions expected to begin soon will see market rates drop at least 10%. Clearing firms are currently involved in an extensive program of property valuations to establish starting prices for the auctions. Ilias Ziogas, head of property consultancy company NAI Hellas and one of the founding members of the Chartered Surveyors Association, said that the property market is certain to suffer further as a result of the auctions: “The impact on prices will be clearly negative, not because the price of a property will be far lower at the auction than a nearby property, but because it will diminish demand for the neighboring property.”

He added that a market with already reduced demand that receives more supply at more attractive rates through auctions will definitely see buyers turn to the latter. He also said that they will only look at other buildings if they are not satisfied with what the auctions have to offer. This view is also shared by Giorgos Litsas, head of the GLP Values chartered surveyor company, which cooperates with PQH. He told Kathimerini that the only way is down for market rates. “I believe that unless there is an unlikely coordination among the parties involved – i.e. the state (tax authorities, social security funds etc.), the banks and the clearing firms – in order to prevent too many properties coming onto the market at the same time, rates will go down by at least 10%.”

He noted that “we estimate the stock of unsold properties of all types comes to 270,000-280,000, in a market with no more than 15,000 transactions per year. Therefore the rise in supply will send prices tumbling.” Yiannis Xylas, founder of Geoaxis surveyors, added, “I fear the auctions will create an oversupply of properties without the corresponding demand, which translates into an immediate drop in rates that may be rapid if one adds the portfolios of bad loans secured on properties that will be sold to foreign funds at a fraction of their price.”

Read more …

He sounds confused.

Italy FinMin Says The Euro Zone Still Faces Problems – Even In Germany (CNBC)

Italy’s finance minister delivered an upbeat tone on his country’s banking sector but highlighted that major hurdles still remain in the euro zone, including in Germany. Germany might be known as the powerhouse of the euro zone economy but it has its own banking problems to deal with, Pier Carlo Padoan told CNBC on the sidelines of the Ambrosetti Forum on Sunday. “I think that there are some German banking problems and I’m confident the German authorities will deal with them,” Padoan said when asked about remarks made by former Prime Minister Matteo Renzi last year. “Germany has been the country that has by far poured much more public money into the banking sector in terms of the hundreds of billions of euros in the past when the rules where different of course.

This is a sign that maybe we all have to recognize that we have problems and we all have to recognize that we need to cooperate much more effectively to provide European solutions to those problems,” he said. Though Italy keeps making headlines due to its financial sector, analysts have also warned on banking problems in Germany. These include the reliance on the shipping industry, which used to be a stable investment before the euro zone debt crisis. Other issues include the sheer number of banks in Germany with very little consolidation. There are approximately 2,400 separate banks with more than 45,000 branches throughout the country and over 700,000 employees, according to Commercial Banks Guide, an industry website.

As such, Padoan told CNBC that it is crucial to conclude the banking union – a project created in 2012 in response to the sovereign debt crisis that aims to have one single set of rules for all banks across the European Union. He told CNBC that so far the banking union hasn’t been fully implemented, not because of resistance from certain countries, but because of different national perspectives. “We are however making progress in one thing: That we are building trust among ourselves and we are also recognizing that we have to reconcile historically-driven different traditions in banking sectors and they have to merge into a new European banking culture,” Padoan said.

Read more …

He sounds like Varoufakis.

Italy’s 5-Star Says Euro Referendum Is ‘Last Resort’ (R.)

A referendum on Italy’s membership of the euro currency would be held only as a “last resort” if Rome does not win any fiscal concessions from the European Union, a senior lawmaker from the anti-establishment Five-Star Movement said on Sunday. Luigi Di Maio’s comments reflect a striking change of tone by some senior officials in the party in recent months as they have retreated from 5-Star’s original pledge. Seeking to reassure an audience of bankers and business leaders, Di Maio – widely tipped to be 5-Star’s candidate for prime minister at a general election due by next year – played down the referendum proposal, calling it a negotiating tool with the EU. “Austerity policies have not worked, on monetary policy we deserve the credit for triggering a debate… this is why we raised the issue of a referendum on the euro, as a bargaining tool, as a last resort and a way out in case Mediterranean countries are not listened to,” he said.

Two years ago the party gathered the signatures from the public needed to pave the way for a referendum that it said was vital to restore Italy’s fiscal and monetary sovereignty. But now, running neck-and-neck with the ruling Democratic Party (PD) in opinion polls and with the election in sight – scheduled to be held by May 2018 – it is hitting the brakes on the idea. This underlines the crucial challenge facing the party as it seeks to please some core supporters, while trying to shed its populist image and convince foreign capitals and financial markets that it can be trusted in office. [..] The party wants several changes to the euro zone’s economic rules to help its more sluggish economies, like Italy. These include stripping public investment from budget deficits under the EU’s Stability Pact and creating a European “bad bank” to deal with euro zone lenders’ bad loans.

“We are not against the European Union, we want to remain in the EU and discuss some of the rules that are suffocating and damaging our economy,” said Di Maio, who serves as deputy speaker of the Chamber of Deputies. An opinion poll in La Stampa daily on Sunday had 24% of respondents saying Di Maio most deserved to run the country in the next five years, against 17% for former PD Prime Minister Matteo Renzi and 12% for center-right leader Silvio Berlusconi.

Read more …

Schulz and Merkel are the same person.

Turkey Will Never Become EU Member, Says Angela Merkel (Ind.)

Germany’s Chancellor, Angela Merkel, has said Turkey should categorically not become a member of the European Union in comments that are expected to further inflame tensions between the Nato allies. Speaking at a televised election debate with her rival, Martin Schulz, she said she would seek a joint EU position with other leaders to ensure Turkey never became a member. “The fact is clear that Turkey should not become a member of the EU,” she said after Mr Schulz said he would stop Turkey’s bid to join the EU if he was elected chancellor. “Apart from this, I’ll speak to my colleagues to see if we can reach a joint position on this so that we can end these accession talks,” she added.

[..] Her comments are likely to worsen already strained ties between the countries after Ms Merkel said Berlin should react decisively to Turkey’s detention of two more German citizens on political charges. It comes just weeks after German Foreign Minister Sigmar Gabriel told Turkey it will never become a member of the EU as long as it is governed by the current president, Recep Tayyip Erdogan. “It is clear that in this state, Turkey will never become a member of the EU,” Mr Gabriel said. Mr Erdogan has urged German Turks to boycott Germany’s main parties in next month’s general election.

Read more …

Good to know. Still, if people really want to go, maybe we should just let them.

How Our Immune Systems Could Stop Humans Reaching Mars (Tel.)

The astrophysicist Neil DeGrasse Tyson commented that ‘dinosaurs are extinct today because they lacked the opposable thumbs and brainpower to build a space programme’ Yet although we now have the technological ability to leave Earth, scientists have found another stumbling block to colonising new worlds – our own immune system. Although it is said we are all made of ‘star stuff’ when it comes to travelling away from our home planet humans are far more vulnerable to the rigours of space than our interstellar origins might suggest. Billions of years of evolution has effectively backed mankind into a corner of the Solar System that it may be now be tricky to leave. A team of scientists from Russia and Canada analysed the effect of microgravity on the protein make-up in blood samples of 18 Russian cosmonauts who lived on the International Space Station for six months.

They found alarming changes to the immune system, suggesting that they would struggle to shake off even a minor virus, like the common cold. “The results showed that in weightlessness, the immune system acts like it does when the body is infected because the human body doesn’t know what to do and tries to turn on all possible defense systems,” said Professor Evgeny Nikolaev, of Moscow Institute of Physics and Technology and theSkolkovo Institute of Science and Technology. The effects of spaceflight on the human body have been studied actively since the mid-20th century and it is widely known that microgravity influences metabolism, heat regulation, heart rhythm, muscle tone, bone density, the respiration system. Last year research from the US also found that astronauts who travelled into deep space on lunar missions were five times more likely to have died from cardiovascular disease than those who went into low orbit, or never left Earth.

Astronauts are fitter than the general population and have access to the best medical care, meaning that their health is usually better than the general population. Those of comparable age but who never flew, or only achieved low Earth orbit, had less than a one in 10 chance of death from cardiovascular disease. [..] To gain a deeper understanding of the changes in human physiology during space travel, the research team quantified concentrations of 125 proteins in the blood plasma of cosmonauts. Proteins change as the immune system alters and so can be used as a measure of how it is functioning. Blood was taken from the cosmonauts 30 days before they travelled to the ISS and then on their immediate return to Earth. They were also tested seven days after touchdown. Individual proteins were then counted using a mass spectrometer.

”When we examined the cosmonauts after their being in space for half a year, their immune system was weakened,” said Dr Irina Larina, the first author of the paper, a member of Laboratory of Ion and Molecular Physics of Moscow Institute of Physics and Technology. “They were not protected from the simplest viruses. We need new measures of disorder prevention during a long flight.

Read more …