Apr 302019
 


Edouard Manet The absinthe drinker 1859

 

Ros Rosenstein Resigns (ZH)
Trump Sues Capital One, Deutsche Over Complying With Subpoenas (Fox)
Russia Military Budget Continues To Decline (AFP)
One Child Dies From Yemen War And Side Effects Every 12 Minutes (MEE)
Letter to Dennis A. Muilenburg, CEO of Boeing (Ralph Nader)
Boeing Told Southwest 737 MAX Alert Feature NOT ON By Default (RT)
Boeing Boss Rejects Accusations About 737 MAX Jets That Crashed (G.)
Assange Accuses Ecuadorian Diplomatic Staff In London Of Spying (RT)
Why is Maria Butina in Prison? (Ron Paul)
Tom Petty was Right (Jim Kunstler)
The Gilets Jaunes Are Winning, What’s Next? (OffG)
Globalization is Waning (CNBC)
Climate Change Being Fuelled By Soil Damage (BBC)
Antibiotic Resistance As Big A Threat As Climate Change (G.)

 

 

I wonder what we’ll learn about Rosenstein now he’s stepped down. Offering to wear a wire to spy on Trump is still a very curious issue.

Ros Rosenstein Resigns (ZH)

While long-expected, amid two chaos-ridden years as the Justice Department’s No.2, the day has finally come when Deputy Attorney General Rod Rosenstein has reportedly sent his resignation letter to President Donald Trump, will leave post May 11. “I am grateful to you for the opportunity to serve; for the courtesy and humor you often display in our personal conversations; and for the goals you set in your inaugural address: patriotism, unity, safety, education and prosperity,” Mr. Rosenstein wrote in the letter, which was reviewed by The Wall Street Journal. In his letter, Mr. Rosenstein cited the Justice Department’s progress in executing the Trump administration’s agenda: fighting violent crime, combating the nation’s drug abuse crisis, toughening immigration enforcement and supporting local law enforcement. “Productivity rose, and crime fell,” he wrote.


“Our nation is safer, our elections are more secure and our citizens are better informed about covert foreign efforts and schemes to commit fraud, steal intellectual property, and launch cyberattacks,” he wrote. “We also pursued illegal leaks, investigated credible allegations of employee misconduct and accommodated congressional oversight without compromising law enforcement interests.” Mr. Rosenstein made no mention of the special counsel in his resignation letter, but instead, as WSJ reports, wrote of the Justice Department’s responsibility to avoid partisanship. “Political considerations may influence policy choices, but neutral principals must drive decisions about individual cases,” he wrote.

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“..allegations of potential foreign influence on the U.S. political process..”

Really? That’s what this is about?

Trump Sues Capital One, Deutsche Over Complying With Subpoenas (Fox)

President Donald Trump filed a lawsuit Monday against Deutsche Bank and Capital One in an attempt to block congressional subpoenas for his business records, claiming House Democrats are simply attempting to harass him. Politico reported that in a joint statement, Reps. Maxine Waters, D-Calif. and Adam Schiff, D-Calif., called the Trump suit “meritless.” They claimed Trump’s suit was a tactic to delay accountability. Waters is the chairwoman of the Financial Services Committee and Schiff is the chairman of the House Intelligence Committee. Schiff said at the time that the subpoenas were part of an investigation “into allegations of potential foreign influence on the U.S. political process.”

Two House committees subpoenaed Deutsche Bank and several other financial institutions earlier this month as part of investigations into Trump’s finances. The lawsuit by Trump, his sons Donald Jr. and Eric and his daughter Ivanka, was filed in Manhattan federal court. The Trump Organization and the Donald J. Trump Revocable Trust are among the other plaintiffs. The Trumps want a federal judge to declare the subpoenas unlawful and unenforceable. The lawsuit also seeks to block the financial institutions from disclosing information and complying with the subpoenas. [..] “This case involves congressional subpoenas that have no legitimate or lawful purpose,” the suit, obtained by The New York Times, said.

“The subpoenas were issued to harass President Donald J. Trump, to rummage through every aspect of his personal finances, his businesses and the private information of the president and his family, and to ferret about for any material that might be used to cause him political damage. No grounds exist to establish any purpose other than a political one.”

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AFP headline was: “US military spending up for first time in 7 years”. But that’s not the story. It’s Russia. Even France spends more. And stories keep on coming about Russia threatening just about everyone.

Russia Military Budget Continues To Decline (AFP)

US military spending has risen for the first time in seven years, reflecting Trump administration policy, according to a new report released Monday by the Stockholm International Peace Research Institute. Worldwide military spending also rose by 2.6 percent to $1.8 trillion overall last year, SIPRI calculated. It was the second year running the global figure has risen, bringing military spending to its highest level since 1988. “The increase in US spending was driven by the implementation from 2017 of new arms procurement programmes under the Trump administration,” said Aude Fleurant, director of SIPRI’s Arms and Military Expenditure (AMEX) programme.


The US figure alone of $649 billion was as much as the next eight highest military budgets. But Chinese as well as US spending helped push the overall spending figures for the year higher, said the report. China’s spending has risen 83 percent since 2009, bringing it up to second place, ahead of Saudi Arabia, India — which is modernising its armed forces — and France. [..] Russia meanwhile dropped out of the top five spenders, with its military budget declining since 2016, said the report. Western countries’ economic sanctions against Russia, in place since 2014 because of its conflict with Ukraine, have hit the country’s military budget.

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“..the vast majority of the victims of Yemen’s conflict are children under five..”

One Child Dies From Yemen War And Side Effects Every 12 Minutes (MEE)

By the end of 2019, fighting in Yemen will have claimed about 102,000 lives, according to new figures from the United Nations that indicate the war has killed far more people than previously reported. A UN-commissioned report by University of Denver also revealed that more Yemenis were dying of hunger, disease and the lack of health clinics and other infrastructure than from fighting. About 131,000 Yemenis will have died from these side effects of the conflict between the beginning in 2015 and the end of 2019, according to the 68-page study, called Assessing the Impact of War on Development in Yemen. The combined death toll from fighting and disease is 233,000, or 0.8 percent of Yemen’s 30 million-strong population.


Researchers also said that those five years of conflict will have cost Yemen’s economy $89bn. “It’s worse than people expected,” Jonathan Moyer, an assistant professor and lead author on the report, told Middle East Eye. “It’s one of the highest-impact internal conflicts since the end of the Cold War. On par with Iraq, Sierra Leone, Liberia, and the Democratic Republic of Congo – conflicts with an impact on development that lasts for a generation.” According to Moyer, the vast majority of the victims of Yemen’s conflict are children under five. The report says that one child dies from the war and its side effects every 11 minutes and 54 seconds. Moyer’s team also projected forward, calculating Yemen’s losses if the war were to drag on until 2030. If fighting continues until then, the death toll would reach 1.8 million, the economy would have lost $657bn, 84 percent of Yemenis would be malnourished and 71 percent of them would live in extreme poverty, researchers said.

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Nader is Boeing’s biggest fear. He lost a niece in the Ethiopia crash.

Letter to Dennis A. Muilenburg, CEO of Boeing (Ralph Nader)

Dear Mr. Muilenburg: On April 4, 2019 you somewhat belatedly released a statement that “We at Boeing are sorry for the lives lost in the recent 737 MAX accidents. These tragedies continue to weigh heavily on our hearts and minds….” You added that a preliminary investigation made it “apparent that in both flights” the MCAS “activated in response to erroneous angle of attack information.” These and other remarks reflect years of mismanagement by Boeing executives, now tragically bearing bitter fruit. Your acknowledgement of the problems with the 737 MAX somehow escaped inclusion in your messages to shareholders, the capital markets and the Securities and Exchange Commission.

It is now stunningly clear that your overly optimistic outlook on January 20, 2019 – after the Indonesian Lion Air crash – was misleading. Whatever the public learns, day after day about the troubles of your company, it is still far less than what Boeing knows will come out day by day, and not just about the deadly design of the 737 MAX. Your narrow-body passenger aircraft – namely, the long series of 737’s that began in the nineteen sixties was past its prime. How long could Boeing avoid making the investment needed to produce a “clean-sheet” aircraft and, instead, in the words of Bloomberg Businessweek “push an aging design beyond its limits?” Answer: As long as Boeing could get away with it and keep necessary pilot training and other costs low for the airlines as a sales incentive.

Boeing kept on this track until the competition from its only competitor, Airbus, came along with its A320neo. The year 2011 was a crucial period for the company. Top management was into preliminary work on a new aircraft and then panicked over Airbus’s success. To compete with Airbus, Boeing equipped the 737 MAX with larger engines tilted more forward and upward on the wings than prior 737’s. Thus began the trail of criminal negligence that will implicate the company and its executives.

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Contradictory reports. Boeing seems to have a foot in its mouth.

Boeing Told Southwest 737 MAX Alert Feature NOT ON By Default (RT)

Southwest Airlines, the largest Boeing 737 MAX customer, says Boeing told them a standard flight angle alert system had to be bought separately to be activated, contradicting the manual – and only after the deadly Lion Air crash. The system in question, officially known as the angle of attack (AOA) disagree light, is basically an indicator at a plane’s control board. The light is expected to go on whenever the aircraft’s nose pitches up or down too far, warning its pilots of a potentially dangerous situation. Such a light was a standard issue on earlier models of Boeing planes, and was expected to work in the same manner on the ill-fated MAX 737 planes – except it wasn’t – instead coming as part of an additional indicator package.


When the new planes were delivered to Southwest Airlines, the “lights were depicted to us by Boeing as operable on all MAX aircraft” regardless of purchasing the add-on, the airline operator said in a statement. The manual for the aircraft showed that as well, the company said. After the first deadly crash of a 737 MAX plane in October, operated by Indonesia’s Lion Air, Boeing notified Southwest that the indicators were actually not working by default. The company then promptly installed the optional package that made the warning lights function as the Southwest pilots had expected. Boeing, in a statement to CNBC, said the disagree lights would in the future be included as a standard feature – that is if the grounded jet returns to operations.

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There are no accusations, just a statement by the WSJ that the systems were not activated. That’s either true or it is not.

Boeing Boss Rejects Accusations About 737 MAX Jets That Crashed (G.)

The boss of Boeing has denied accusations that its two 737 Max aircraft involved in fatal crashes lacked an optional safety feature, which might have alerted the pilots to technical malfunctions that partly caused the accidents. “We don’t make safety features optional,” Dennis Muilenburg, Boeing’s chairman and chief executive, said at the company’s annual meeting in Chicago on Monday. “Every one of our airplanes includes all of the safety features necessary for safe flight.” A preliminary investigation into the Ethiopian Airlines 737 Max crash last month found it was triggered by a faulty “angle of attack” sensor, which monitors the inflight position of the plane.

The erroneous readings from the sensor in turn activated the aircraft’s maneuvering characteristics augmentation system (MCAS), an auto-pilot program that encourages the plane’s nose to dip down. [..] It was revealed over the weekend that Boeing had removed warnings about pitch sensor malfunction from the standard 737 Max (MCAS) safety package. The Wall Street Journal reported that the warning system, which was present in previous 737 models, was only operative on 737 Max jets if the operator airlines had paid for a package of additional safety features. “In this case again, as in most accidents, there are a chain of events that occurred. It is not correct to attribute that to any single item,” Muilenburg said.

“We know that there are some improvements that we can make to MCAS and we will make those improvements.” He told shareholders that software updates being carried out would make the grounded 737 Max fleet “one of the safest airplanes ever to fly”, adding: “Yet, we know we can always be better. We have a responsibility to design, build and support the safest airplanes in the sky. The recent accidents have only intensified our dedication to it.” [..] It was also revealed on Monday that four Boeing employees had called the Federal Aviation Administration to raise serious concerns about the 737 Max. The calls began coming in within hours of Ethiopian investigators releasing a preliminary report on the crash.

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“Ecuadorian law provides penalties of up to five years in prison for each violation mentioned in the complaint.”

Assange Accuses Ecuadorian Diplomatic Staff In London Of Spying (RT)

Wikileaks founder Julian Assange has filed a criminal complaint in Ecuador, accusing the diplomatic staff at the London embassy of spying on the whistleblower before leaking illegally obtained data to a third party for extortion. Lenin Moreno’s government violated Assange’s privacy by secretly recording the journalist’s daily activities starting from March 2018, said a complaint submitted Monday to the attorney general’s office in Ecuador on behalf of the whistleblower. It says the spying was conducted with the help of Promsecurity, a private contractor firm which administers electronic surveillance at the Ecuadorian embassy in London.


Naming three officials of the diplomatic mission, including Ambassador Jaime Marchán, as well as four members of Promsecurity, the complaint alleges that the government violated at least four counts of domestic law by illicitly monitoring Assange’s activity. Those involved apparently tried to extort €3 million from WikiLeaks threatening to publish audio, video and personal documents of Assange unless they get paid. Ecuadorian law provides penalties of up to five years in prison for each violation mentioned in the complaint. The matter is “very sensitive and complicated” Ecuadorian lawyer Carlos Poveda told reporters after filing the case in Quito, asking for the judiciary to investigate the case. The lawyer did not reveal to whom the Australian’s personal information had been leaked to, but noted that that the Spanish authorities are already investigating the extortion scheme.

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“Maria Butina was in the wrong place at the wrong time.”

Why is Maria Butina in Prison? (Ron Paul)

Russian gun rights activist and graduate exchange student Maria Butina was sentenced to 18 months in prison last week for “conspiracy to act as a foreign agent without registering.” Her “crime” was to work to make connections among American gun rights activists in hopes of building up her organization, the Right to Bear Arms, when she returned to Russia. She was not employed by the Russian government nor was she a lobbyist on Putin’s behalf. In fact the Putin Administration is hostile to Russian gun rights groups. Nevertheless the US mainstream media and Trump’s Justice Department are treating her as public enemy number one in a case that will no doubt set the dangerous precedent of criminalizing person-to-person diplomacy in the United States.

The Foreign Agent Registration Act (FARA) was passed in 1938 under pressure from the FDR Administration partly to silence opposition to the US entry into World War II. While a handful of cases were prosecuted during the war, between 1966 and 2015 the Justice Department only brought seven FARA cases for prosecution. Though very few cases have been brought on FARA violations, one of them was against Samir Vincent, who was paid millions of dollars by Saddam Hussein to lobby for sanctions relief without registering. He got off with a fine and “community service.” Millions of dollars in unregistered payments from Saddam Hussein gets no jail time, while Butina gets 18 months in prison for privately promoting a cause most Americans support! How is this justice?

The US Justice Department is not even as tough on illegals who commit capital crimes in the US! Unfortunately Maria Butina was in the wrong place at the wrong time. With the rise of the “Russiagate” hysteria, Butina’s case was seen as a useful tool by Democrats to push the idea that President Trump was put into office by the Russians. Plus, many of them are also hostile to our Second Amendment and to the National Rifle Association. So it was a perfect storm for Butina.

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Waiting is the hardest part.

Tom Petty was Right (Jim Kunstler)

The sense of gathering crisis persists. It is systemic and existential. It calls into question our ability to carry on “normal” life much farther into this century, and all the anxiety that attends it is so hard for the public to process that a dismaying number of citizens opt for suicide. There is no coherent consensus about what is happening and no coherent proposals to do anything about it. Bad ideas flourish in this nutrient medium of unresolved crisis. Lately, they dominate the scene on every side. A species of wishful thinking that resembles a primitive cargo cult grips the technocratic class, awaiting magical rescue remedies to extend the regime of Happy Motoring, consumerism, and suburbia that make up the crumbling armature of “normal” life in the USA.


The political Right seeks to Make America Great Again, as though we might return to a 1962 heyday of industrial mass production by wishing hard enough. The Left seeks the equivalent of an extended childhood for all, lived out in a universal safe space, where all goods and services come magically free from a kindly parent-like government, and the sunny days are spent training unicorns to find rainbows. The decade-long “recovery” from the Great Financial Crisis of 2008 amounted to ten years of fake-it-til-you-make-it — with the prospect nil of actually making it to something like economic and cultural soundness. Are we too far gone now? Some kind of shock therapy is surely in the offing, and probably in the form of a violent financial readjustment that will alter the terms of getting and spending so drastically as to topple the matrix of rackets that masquerades as the nation’s business.

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“..typical of Macron, revealing only how his personal authority is slipping away, and strangely enough, how irrelevant he is becoming to the entire debate.”

The Gilets Jaunes Are Winning, What’s Next? (OffG)

In the sharp light of spring it is clear that Macron’s winter strategy: the Great National Debate, has achieved nothing for the government and more tellingly perhaps, has further revealed Macron’s own incapacity to either change himself or shift course. As one anonymous French state official reportedly said: ‘Mitterrand gave them an extra week’s holiday, but Macron can’t manage anything’. He simply seems unable in any form to communicate with either the Gilets or the people of France. His constant speeches, with their casual insults and lack of empathy, remain one of the best recruitment tools the Gilets possess. His recent pronouncements continue this trend.

His promise to rebuild the cathedral in five years was met with scorn – ‘this is not a railway line’, said one commentator, while his invitation to the world (a typical empty gesture) angered and aroused traditionalists. Indeed, as has been widely reported, his endorsement of cash donations from billionaires, simply provided the Gilets with yet more free sticks to beat him and the state. Even his big showpiece speech was cancelled when the Cathedral burst into flames. And what was his big announcement? A freeze on hospital and school closures, the index-linking of pensions to inflation and the closing of the École Nationale d’Administration (ENA), the university that produces the country’s political and civil elite, all of which, particularly the last, were seen as too late and totally irrelevant.

After all it doesn’t put food on the table or help the people get to the end of the month with any money. As I noted in previous articles, this is typical of Macron, revealing only how his personal authority is slipping away, and strangely enough, how irrelevant he is becoming to the entire debate.

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Lost of people will deny this.

Globalization is Waning (CNBC)

Globalization is waning, and a U.S.-China trade deal would do nothing to reverse that phenomenon, according to a global investment strategist. Peak globalization has actually already come and gone, according to David Roche, president and global strategist at London-based Independent Strategy. “The actual reversal of globalization started over seven years ago,” well before the rise of U.S. President Donald Trump, as countries worldwide instituted more protectionist policies, Roche told CNBC’s “Squawk Box” last week. In fact, even China — whose leaders are now some of the loudest proponents of global systems — will see most of its future growth come from domestic pursuits, he projected.


“Globalization is on a back foot, it’s not the trade deal with China, a trade deal agreement which would flip the switch and turn on the motor again — the damage has been done,” he added. “There is no way going forward that China is able to grow by using international trade. It is going to grow more domestically.” In fact, China is not the only country looking inward. For many years, Roche noted, countries like Italy have had populist governments adopting nationalist policies, prioritizing the short-term benefit of their citizens instead of embracing globalization and the interconnectivity it entails.

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Dig at your own peril.

Climate Change Being Fuelled By Soil Damage (BBC)

Climate change can’t be halted if we carry on degrading the soil, a report will say. There’s three times more carbon in the soil than in the atmosphere – but that carbon’s being released by deforestation and poor farming. This is fuelling climate change – and compromising our attempts to feed a growing world population, the authors will say. Problems include soils being eroded, compacted by machinery, built over, or harmed by over-watering. Hurting the soil affects the climate in two ways: it compromises the growth of plants taking in carbon from the atmosphere, and it releases soil carbon previously stored by worms taking leaf matter underground.


The warning will come from the awkwardly-named IPBES – the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services – a panel studying the benefits of nature to humans. The body, which is meeting this week, aims to get all the world’s governments singing from the same sheet about the need to protect natural systems. IPBES will formally release its report on Monday 6 May. About 3.2 billion people worldwide are suffering from degraded soils, said IPBES chairman Prof Sir Bob Watson. “That’s almost half of the world population. There’s no question we are degrading soils all over the world. We are losing from the soil the organic carbon and this undermines agricultural productivity and contributes to climate change. We absolutely have to restore the degraded soil we’ve got.”

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Antibiotics in fish farming. We sure are beyond repair.

Antibiotic Resistance As Big A Threat As Climate Change (G.)

Protests against climate change should be extended to the other greatest threat facing humanity, according to England’s chief medical officer, who says an Extinction Rebellion-style campaign is needed to save people from antibiotics becoming ineffective in the face of overuse and a lack of regulation. The threat of antibiotic resistance is as great as that from climate change, said Dame Sally Davies, and should be given as much attention from politicians and the public. “It would be nice if activists recognised the importance of this,” she said. “This is happening slowly and people adjust to where we are, but this is the equivalent [danger] to extreme weather.”

Davies said efforts to combat the problem of common illnesses becoming untreatable by antibiotic medicines should be coordinated at a worldwide level in a similar way as the Intergovernmental Panel on Climate Change, the body of scientists set up in 1988 to tackle global warming. The IPCC warned last year that climate change would lead to disaster within 12 years if urgent action was not taken to reverse the growth in greenhouse gas emissions. Davies said the consequences of antibiotic resistance posed at least as great a threat to humanity’s future, and in the same timescale, but few efforts had been made to deal with the issue. “There is not the appetite [among pharmaceutical companies] to develop new medicines,” she said. “There is a systemic failure. We need something similar to the IPCC.”

She listed a series of problems that the world has allowed to build up, from overuse of antibiotics and a lack of restraints on prescribing strong medications, to the rampant use of the drugs on animals, including by farmers for “growth promotion”, as the drugs can make animals put on weight faster. Such use has been banned in Europe and the US, but is common elsewhere, and even in the EU and US, the use of strong antibiotics critical to human health is still allowed on animals despite scientific advice to the contrary.

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Mar 262015
 
 March 26, 2015  Posted by at 8:25 am Finance Tagged with: , , , , , , , , , , ,  


Jack Delano Residents of rooming house for rail workers, Clinton, Iowa 1943

US Economy Heads Toward Zero Growth in Q1 (WolfStreet)
US Home Prices Are Surging 13 Times Faster Than Wages (Bloomberg)
UK Household Debt Soars By 9% To Hit A Record £239bn (Independent)
ECB Bond Buying To Continue Till Inflation Reaches 2%: Draghi (WSJ)
Europe Blocks Desperate Greek Attempt To Stay Afloat (Telegraph)
Eurozone Said to Give Greece Five Days to Deliver Plan (Bloomberg)
Greek Central Bank Governor Stournaras Says Grexit Isn’t An Option (WSJ)
A Murky, Sloppy Muddle: How Greece’s Exit From Euro Could Happen (Bloomberg)
Athens Raids Public Health Coffers In Hunt For Cash (FT)
Greek Government Takes Desperate Measures In Battle To Stay Afloat (Guardian)
How Low Can Interest Rates Go? (BBC)
US Risks Epic Blunder By Treating China As An Economic Enemy (AEP)
China’s European Shopping Spree Shows No Signs Of Slowing (Ind.)
US Couldn’t Corral AIIB Due To Soaring Chinese Investments In Europe (Atimes)
Putin Security Council Slams Obama Attempts At “New World Order” (Zero Hedge)
The Central Banker Who Saved the Russian Economy From the Abyss (Bloomberg)
Banking Enclave of Andorra Shaken by US Accusations (Bloomberg)
Meet The Kagans: A Family Business Of Perpetual War (Robert Parry)
After a Twelve Year Mistake in Iraq, We Must Just March Home (Ron Paul)
We’re Treating Soil Like Dirt. It’s A Fatal Mistake (Monbiot)
No One Must Go Thirsty: Water In Public Hands Is A Right (Beppe Grillo)

Want to bet the ‘real’ number will be way above zero?

US Economy Heads Toward Zero Growth in Q1 (WolfStreet)

The consistency with which nearly every report on the US economy has deteriorated over the last few months is astonishing. Only the jobs report has been spared that sharp downdraft. So we blame the weather, which in parts of the US was truly atrocious, while in other parts, particularly in California, it was gorgeous. Too gorgeous. This is supposed to be our rainy season, but every day the sun is out as we’re heading into our fourth year of drought. Yet the drought isn’t what keeps people from shopping or companies from ordering equipment. So out here, we’re baffled when the weather gets blamed. Today’s durable goods report for February was another shot at this wobbly edifice of the US economy.

New orders for manufactured durable goods dropped by 1.4%, the Census Bureau reported. It was the third decrease in four months. Transportation equipment fell 3.5%, also the third decrease in four months. Excluding transportation, new orders – “core” durable goods – fell 0.4%, down for the fifth month in a row. And Core Capital Goods New Orders, considered an important gauge of business spending, fell 1.4%, down for the sixth month in a row. The weather is really hard to blame for this, so folks blamed the strong dollar and slack demand in the US and globally. The data was bad enough to push the Atlanta Fed’s GDPNow model of the US economy down another step toward zero growth in the first quarter.

The Atlanta Fed started the model in 2011 to offer a more immediate picture where the economy is headed. It takes into account economic data as released and adjusts its GDP forecast for the quarter as it goes. The model is volatile. It reacts to incoming monthly data that are themselves volatile and subject to sharp revisions. So a few strong releases for March could turn this thing around on a dime. But we’re still dealing with the reality of January and February; the data has been crummy, and the Atlanta Fed’s “nowcast” is increasingly depicting an economy that is losing its struggle with growth.

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SO what exactly did the Fed purchase $1 trillion in mortgage-backed securities for? Riddle me that.

US Home Prices Are Surging 13 Times Faster Than Wages (Bloomberg)

For most people, buying a home is no cheap venture. That’s especially the case when the growth in U.S. home prices is beating wage increases 13 to 1. Wages climbed by 1.3% from the second quarter of 2012 to the second quarter of 2014, compared to a 17% increase in home prices around that time, according to a new report from RealtyTrac. The real-estate data provider used the Labor Department’s weekly earnings data to measure wage growth, while home prices were derived from sales-deed data in December 2014 and compared to December 2012 on the hypothesis that a change in average wages would take at least six months to affect home prices.

Using localized earnings data, RealtyTrac also found that 76% of housing markets posted increases in home prices that exceeded the wage growth there during that time frame. How could this happen? Enter the investor. In many markets, the housing recovery has “largely been driven over the last two years by buyers who are not as constrained by incomes – namely the institutional investors coming in and buying up properties as rentals, and international buyers coming in and buying, often with cash,” Daren Blomquist, vice president at RealtyTrac and author of the report, said in an interview.

For demand from traditional buyers to improve, “either wages are going to need to go up or prices are going to need to at least flatten out and wait for wages to catch up,” he said. “You might say the third alternative is interest rates go down so you give people more buying power with their wages, but interest rates are about as low as they can go.” The trend illustrates the limited impact of the Federal Reserve’s decision to include mortgage-backed securities in its unprecedented asset-buying program. The Fed bought more than $1 trillion of those securities to prop up the housing market after it collapsed and helped trigger the worst recession in the post-World War II era.

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How Britain fell back in love with debt.

UK Household Debt Soars By 9% To Hit A Record £239bn (Independent)

The average UK household is set to hold close to £10,000 in unsecured debt by the end of 2016, according to a leading accountancy firm. The forecast, by PricewaterhouseCoopers, was made after 2014 saw a sharp rise in unsecured debt, which bounced back to an all-time high of £239bn. The 9% rise in borrowing last year brings the average to close to £9,000, but PwC reckons that will grow. That would mean households will be closing in on the £10,000 figure if trends continue. The household debt to income ratio is projected to reach 172% by 2020, exceeding its previous peak set before the financial crisis. It includes mortgages and other debt secured on property.

Most banks all but ceased lending during the 2007/2008 shock. While mortgage lending is more strictly controlled than it was, the tap has gradually loosened when it comes to unsecured debt. PwC’s Precious Plastic: How Britons fell back in love with borrowing, published today, finds that most consumers are confident that they can manage their debt, with fewer worried about job security and pay rises as the economy improves. But the report says that despite consumers’ confidence, affordability will increasingly be called into question as the debt to income ratio steadily increases over coming years.

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To get inflation to 2%, people would need to massively raise spending. They won’t.

ECB Bond Buying To Continue Till Inflation Reaches 2%: Draghi (WSJ)

The European Central Bank will purchase large amounts of public and private debt for at least 18 months and until it is convinced that inflation will stabilise near annual rates of 2%, the bank s president Mario Draghi has said, underscoring the ECB’s willingness to flood the eurozone with freshly minted money far into the future. In testimony to European parliament, Mr Draghi also urged Greece to commit to fully honouring its debt obligations. Its government also must be specific about areas of economic and fiscal reforms where it is in agreement with its international creditors and, where there is disagreement, how (the reforms) are going to be replaced has to be specified , he said.

Referring to the ECB s bond purchase program, now entering its third week, Mr Draghi said: We intend to carry out our purchases at least until end-September 2016, and in any case until we see a sustained adjustment in the path of inflation which is consistent with our aim of achieving inflation rates below, but close to, 2% over the medium term. Mr Draghi’s testimony comes two weeks after the ECB launched a program to purchase more than €1 trillion in bonds mostly government debt by September 2016. The purpose of the program, known as quantitative easing, or QE, is to raise inflation rates closer to the ECB’s target of near 2%.

The ECB has said it would buy bonds at a monthly clip of €60 billion and that the purchases could even extend beyond September of next year. The Governing Council will take a holistic perspective when assessing the path of inflation. It will evaluate the likelihood for inflation not only to converge to levels that are closer to 2%, but also to stabilise around those levels with sufficient confidence thereafter, Mr Draghi said. Consumer prices were down 0.3% from year-ago levels in February, the third-straight decline on an annual basis.

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Say uncle first!

Europe Blocks Desperate Greek Attempt To Stay Afloat (Telegraph)

The Greek government will not receive €1.2bn in European rescue funds after officials ruled the Leftist government had no legal claims on the cash. Athens requested a return of the funds it said were erroneously handed to creditors from Greece’s own bank recapitalisation fund, the Hellenic Financial Stability Facility (HFSF). The transfer was originally arranged by the previous Greek administration. But eurozone officials have blocked the claim, saying it is “legally impossible” transfer the money back to the debt-stricken country. “There was agreement that, legally, there was no over payment from the HFSF to the EFSF,” said a fund spokesman. Germany’s finance ministry was also reluctant to allow the release, claiming there was “no reason” to make the transfer.

The decision is a further blow to the Greek government’s attempts to stay afloat over the next few weeks. Athens has been scrambling to make repayments to its creditors and continue to pay wages and pensions. The government now faces another €2.4bn cash squeeze in April, including a €450m loan repayment to the IMF on April 9. As part of its efforts to stay solvent, the Leftist government has also requested a €1.9bn transfer of profits held by the European Central Bank, from the holdings of Greek government bonds. So far, the ECB has rebuffed all Greek pleas to alleviate their cash squeeze. The central bank has moved to officially ban the country’s banks from increasing their holdings of short-term government debt.

Greek banks are being kept alive through the provision of an expensive form of emergency liquidity (ELA) which is rapidly being used up as capital flees the country. The ECB decided to incrementally raise the limit on ELA to €71bn – a bigger hike than in previous weeks.
Speaking in London on Wednesday, the ECB’s chief economist Peter Praet declined to comment on the Bank’s actions, saying it was important to exercise “verbal restraint” in moments of crisis. Worsening deposit flight has placed the squeeze on Greek lenders, who are only eligible for ELA as long as they are deemed to be solvent. Mr Praet said the country’s banks remained counterparties in their operations with the ECB, suggesting they remained healthy enough to continue receiving ELA.

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One plan after another.

Eurozone Said to Give Greece Five Days to Deliver Plan (Bloomberg)

Greece has until Monday to show how it will follow through on reform commitments after the euro area ruled out speedy access to aid funds, three officials said following a conference call of finance ministry deputies. The euro zone’s other 18 members were adamant on Wednesday’s call that Greece needs to deliver specific plans to see any more bailout cash, the officials said. Prime Minister Alexis Tsipras needs to show that Greece can rebuild trust in its promises, they said. Finance deputies left the door open to €1.2 billion that has been allocated to aid the banking system, as the deputies concluded that Greece can’t tap those funds on a technicality.

As a result, Greece will have to show it will move ahead with the changes its creditors are seeking to get the bank-aid money or other bailout funds. Greece won some financial breathing room Wednesday when the European Central Bank raised the ceiling for Emergency Liquidity Assistance to Greek banks by more than €1 billion to more than €71 billion, according to two people with knowledge of the decision who asked not to be named. The ECB’s move alleviates some near-term cash needs in the banking system while keeping pressure on Tsipras to find a longer-term solution. European officials have said that Greece could default on its obligations within weeks unless there’s a breakthrough.

Greece needs to act faster so its actions can be more effective, Eurogroup Chairman Jeroen Dijsselbloem, who heads the euro-area finance ministers’ group, said in Rotterdam on Wednesday. “The main problem is the same in every country in Europe: getting things done.” Monday will be a test of whether Greece can convince its peers that it will meet their demands for an economic overhaul, the officials said. Once Greece submits its next documents, they’ll need to be reviewed by the country’s official creditors and then the finance ministry deputies in the first few days of next week, ahead of Easter holidays, one of the officials said.

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Oh, yes it is.

Greek Central Bank Governor Stournaras Says Grexit Isn’t An Option (WSJ)

Bank of Greece Governor Yannis Stournaras said Wednesday that ditching the euro and exiting the single currency union is “not an option” for Greece. Mr. Stournaras told an audience at the London School of Economics that a Greek exit–dubbed “Grexit” in financial markets–risks triggering another severe downturn in the stricken Mediterranean economy. Greece has already improved its global competitiveness by driving down wages and prices, he said, and growth is returning. “Grexit would deliver no benefit, but a lot of pain,” Mr. Stournaras said. Quitting the eurozone would probably lead to even deeper austerity than Greece already has implemented, he said, while the adoption of an alternative currency would risk fueling runaway inflation.

His remarks come a day after the ECB instructed Greece’s biggest banks to refrain from taking on anymore short-term Greek government debt, adding to the pressure on Prime Minister Alexis Tsipras’s leftwing government in Athens to reach a deal with creditors over the terms of the nation’s €240 billion bailout package. Mr. Tsipras was elected in January on a pledge to reverse many of the budget cuts and other economic reforms demanded by Greece’s creditors in exchange for financial aid. But he has struggled to persuade lenders led by Germany and the IMF to back down, raising the specter of a disorderly Greek exit from the eurozone.

Greece now has just weeks to secure a deal to unlock billions of euros in badly needed funds to keep paying public-sector salaries and service the nation’s debts. Mr. Stournaras said Greece’s government has a unique opportunity to implement bold economic reforms and forge a durable recovery. “This is in my view a historical opportunity which should not be missed,” he said. He added that he’s more optimistic that Mr. Tsipras’s government is serious about reform than he was a month ago.

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Scenario’s.

A Murky, Sloppy Muddle: How Greece’s Exit From Euro Could Happen (Bloomberg)

With the fight to keep Greece in the euro now in its sixth year, everyone is running out of patience. More importantly, Prime Minister Alexis Tsipras’s government in Athens is running out of money. While bond yields suggest investors expect Greece to stay in the euro, economists such as UniCredit Bank AG’s Erik Nielsen say it may be just a matter of time before he’s forced to print a new currency. Adopting the euro was always supposed to be a one-way ticket, so there is no legal precedent or political roadmap for an exit. If you’re waiting for a formal announcement of a clear resolution, you may be waiting a long time.

Next steps for Greece range from retaining the euro to catastrophic divorce; half-measures like having multiple currencies circulate, with aid recycled to repay foreign-currency debts, are also in the cards. Equally unclear is who would tell the world – and how – that Greece has entered an economic afterlife. Possible messengers include Tsipras, the ECB, EU President Donald Tusk and European Commission President Jean-Claude Juncker, among others.

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Strip mining.

Athens Raids Public Health Coffers In Hunt For Cash (FT)

Greece’s government has raided the coffers of its public health service and the Athens metro as it widens a hunt for funds to keep itself afloat and service debts. Athens faces a €1.7bn bill for wages and pensions at the end of the month and then a €450m loan payment to the IMF on April 9. Greek government and eurozone officials believe Athens does not have funds to cover both. In another constraint on Greece’s ability to raise cash, the ECB decided to impose stricter curbs on the issuance of short-term government debt. EU officials expressed hope that a marathon Monday night meeting between Alexis Tsipras and Angela Merkel, would spark long-stalled talks over economic reforms Greece must implement to unlock €7.2bn in frozen bailout aid.

Athens has promised to deliver a list of reforms to eurozone authorities by Monday. But officials cautioned that the list would still have to be agreed with bailout inspectors before eurozone authorities could make progress on any deal to free up new funding. Though Mr Tsipras discussed his reform plans with Ms Merkel on Monday night, there were few signs that talks in Athens with bailout inspectors had become more active following the Berlin meeting. “The big ‘if’ is that they seem to move at such a glacial pace,” said an official. Greek authorities have also been seeking €1.2bn in funding that they believe was wrongly taken out of the country’s bank recapitalisation fund by eurozone authorities.

But EU officials said a quick decision on the matter was unlikely and even if Athens was awarded the cash it could only go towards bank rescues, not general government coffers. In the absence of progress, some EU officials were accelerating their preparations in case Athens runs out of cash before it agrees a reform programme. In Brussels, European Commission officials have begun looking again at EU law governing capital controls in case the growing uncertainty, or a non-payment to the IMF, spurs a renewed run on bank deposits.

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“They are scraping the bottom of the barrel for everything they can find.”

Greek Government Takes Desperate Measures In Battle To Stay Afloat (Guardian)

The Greek government is resorting to increasingly desperate measures to keep afloat amid dire warnings the debt-stricken country could go bust within weeks. In a balancing act not seen by any European administration in recent times, the cash-strapped coalition has sequestered the reserves of public bodies, seized EU subsidies destined for farmers and postponed all payments for state supplies in the scramble to continue servicing its debt and paying salaries and pensions. Pension funds have been raided to raise money for Treasury bill auctions. “It is clear we are reaching the end and very soon won’t be able to pay,” former finance minister, Stefanos Manos, said. “They are scraping the bottom of the barrel for everything they can find.”

To cover the credit crunch, corporations in which the state has a majority stake, including the Athens Metro, have been tapped. The scheme of repo transactions – where government bonds are used for short-term borrowing requirements – is believed to have raised upwards of €600m in recent weeks. Earlier this month the leftist-led coalition suspended some €300m of EU subsidies for farmers to help pay €1.7bn in public sector wages and pensions due next week. Greek subsidiaries of multinationals have also been approached for loans.

The last-resort measures came as Deutsche Bank warned that Athens was at risk of being pushed into default on 9 April when it must meet a €450m debt repayment to the International Monetary Fund. The precarious state of Athens’ finances has been exacerbated by a precipitous decline in tax revenues – more than €1bn below target since January – said the bank’s economists. Deposit flight has also ratcheted up the pressure. More than €20bn has fled the country since the beginning of the year as savers rush to withdraw funds, worried about Greece’s ability to remain in the euro. “The risk of capital controls continues to rise,” noted the Deutsche report.

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“..the nearer Bank Rate approaches zero, the bigger the squeeze on the profits banks earn from borrowing and lending.”

How Low Can Interest Rates Go? (BBC)

The Bank of England’s website says that the “effective lower bound” for the interest rate it sets, Bank Rate, is the current rate of 0.5%. This is the level, according to the Bank, “below which it cannot be set” – the lowest practicable official interest rate. But on this important issue the website is behind the thinking of the Bank of England’s Monetary Policy Committee, which sets Bank Rate as its main tool to keep inflation on target. Because just over a month ago, the Bank’s governor said that if low inflation were to begin to depress expectations of inflation and wage growth, the MPC could “cut Bank Rate further towards zero”.

And with inflation well below the 2% target at zero, the Bank’s chief economist, Andy Haldane, has said – as a personal rather than institutional view – that there is a meaningful chance that Bank Rate will be cut. So what has happened to demonstrate to the Bank that 0.5% is not the practicable minimum. Partly it is the example of central banks – the European Central Bank and those of Switzerland, Sweden and Denmark – whose official rates are negative: banks that place funds with them are having interest deducted from their deposits, rather than receiving interest. Their rates are less than zero. The other contributor to the fall in the effective lower bound is the recovery of Britain’s banks.

This matters because the nearer Bank Rate approaches zero, the bigger the squeeze on the profits banks earn from borrowing and lending. Think of it this way. Competition between banks should bring down the interest rate on loans when Bank Rate is cut towards zero. But savings rates would be kept by competition above zero. So the gap between the interest rate paid and received by banks would narrow: the profits on this most basic of banking activities would fall. Also the windfall received by banks from all those interest-free deposits the banks hold would be significantly cut.

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“China must recycle its trade surpluses and its $3.8 trillion reserves by one means or another. It can buy US Treasuries, Bunds, or Gilts, perpetuating a global bond bubble.”

US Risks Epic Blunder By Treating China As An Economic Enemy (AEP)

The United States has handled its economic diplomacy with shocking myopia. The US Treasury’s attempt to cripple the Asian Infrastructure Investment Bank (AIIB) before it gets off the ground is clearly intended to head off China’s ascendancy as a rival financial superpower, whatever the faux-pieties from Washington about standards of “governance”. Such a policy is misguided at every level, evidence of what can go wrong when a lame-duck president defers to posturing amateurs in Congress on delicate matters of global geostrategy. Washington has enraged Britain by trying to browbeat Downing Street into boycotting the project. It has forced allies and friendly countries across the Far East to make a fatal choice between the US and China that none wished to make, and has ended up losing almost everybody. Germany, France, and Italy are joining. Australia and South Korea may follow soon.

The AIIB is exactly what the world needs. China must recycle its trade surpluses and its $3.8 trillion reserves by one means or another. It can buy US Treasuries, Bunds, or Gilts, perpetuating a global bond bubble. It can make surgical investments abroad to acquire technology for its champions and pursue a narrow national interest. Or it can recycle the money in concert with other members of the AIIB – with a start-up capital of $50bn – for sewage projects, clean energy, ports, roads, and railways in Asia, helping to plug a $700bn shortfall in infrastructure investment that the World Bank is too small to cover and which is of collective benefit to the world. Britain recycled its surpluses in the 19th Century by building the world’s railways.

America did so in the 1950s through the Marshall Plan. China must do likewise, and it is hard to see why the AIIB is considered such a villainous variant. American officials castigated Britain for breaking ranks and embracing the project, as if it were kowtowing to an enemy. “We are wary about a trend of constant accommodation of China, which is not the best way to engage a rising power,” one US official told the Financial Times. One is left breathless at the historical folly of such a view in any case. As Henry Kissinger told Caixin magazine this week, the greater danger is that the US fails to accommodate the rise of China in an enlightened fashion, repeating errors made by the status quo powers faced with a prickly Germany before the First World War.

There are echoes of the Korean War in this Atlantic spat, though thankfully the stakes are less violent today. Britain tried to restrain General Douglas MacArthur and Washington’s hawks as they sent US forces charging through North Korea to the Yalu River and the Manchurian border in 1950, warning that it would force China to respond. MacArthur’s contemptuous riposte was to liken British reflexes to the betrayal of Czechoslovakia at Munich, of “desiring to appease the Chinese Communists by giving them a strip of Northern Korea.” The British experts were right. China threw four armies across the Yalu. America had arrogantly stumbled into a shooting war with the Chinese revolution, a cataclysmic mistake.

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More strip mining.

China’s European Shopping Spree Shows No Signs Of Slowing (Ind.)

A planned takeover of the Italian tyre maker Pirelli by ChemChina is the latest in a string of Chinese acquisitions in Europe, topping up total foreign investment from China worth $18 billion in 2014, double 2013. Pirelli, the world’s fifth largest tyre maker, will be in Chinese hands after ChemChina confirmed a $7.7 billion bid on Sunday. The deal will give Pirelli a slice of the Chinese tyre market and could see its global market share rise to 10%. It’s one of the biggest European acquisitions by a Chinese company yet. But that’s unlikely to be the case for long. Chinese investors have shown increasing interest in Europe as a centre for investment in the last year, spurred on by the cheap euro and the opportunity to invest in legacy brands.

“Chinese investment in Europe has become much more diverse in recent years and is now extending into all parts of Europe.” said Thomas Gilles, Chairman of the EMEA-China Group at Baker & McKenzie. “What we’re seeing is the maturing and normalization of Chinese investment processes in line with the international economy.” The UK is top of the list. Last year, Chinese investors acquired several billion-dollar British investments. Pizza Hut went for a cool £940 million ($1.4 billion), while property bought by Chinese firms includes Chiswick Park for £875 million ($1.3 billion) and 10 Upper Bank Street for £497 million ($740 million).

Last week it emerged that a Chinese company backed by billionaire Guo Guangchang is looking acquire 18 buildings in Berlin’s Potsdamer Platz square, in what could be the biggest German property sale since 2007. Last year France sold Peugeot for £740 million ($1.1 billion).

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“.. the yuan has increased in value against the Euro almost 25% in one year..”

US Couldn’t Corral AIIB Due To Soaring Chinese Investments In Europe (Atimes)

Stopping a stampede isn’t easy – as that old cowpoke Uncle Sam’s discovering as more European nations bolt to join China’s Asian Infrastructure Investment Bank (AIIB). The weak Euro’s drawing a conga line of Chinese investments to Europe. The money’s being plunked down not only in “typical” Chinese sectors of historic interest like resources or transportation. It’s focusing geographically across the entire European opportunity and capability spectrum. The uplifting effects of this investment hasn’t been lost on the European countries who are now eager to climb aboard China’s AIIB. Ever since Europe embarked on their QE, and China has maintained stability in the yuan.

As we have noted, this is viewed as pre-condition for the non-convertible yuan to join the IMF’s SDR currency basket later this year. And the yuan has increased in value against the Euro almost 25% in one year – a trend likely to continue through the year with the long-term policies of the respective central banks likely to stay in place for the foreseeable future. According to the EU Observer: “Even before the crisis, these flows surged, tripling from less than US$1 billion per year in 2004-8 to roughly $3 billion in 2009-10. As the Eurozone crisis kicked in, Chinese investment tripled again to $10 billion in 2011. And last year, Chinese investors doubled their money in Europe to a record $18 billion.”

Chinese capital’s typically poking around for each European country’s relative market advantages. In the UK as with many foreign investors, the Chinese have focused on prime property, while in Germany they look for advanced technology. “The UK is the top destination for Chinese investment at $5.1 billion, followed by Italy at $3.5 billion,” the Observer said. As the capital needs of Southern Europe grow, Chinese capital has focused on privatisations and distressed opportunities, from the Greek ports connecting to their new Silk Road to Europe, to Portugal’s Espirito Santo Bank and Spain’s real estate foreclosures.

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They’re on to us.

Putin Security Council Slams Obama Attempts At “New World Order” (Zero Hedge)

Moscow – which may or may not have to nuke Denmark – says the US has adopted a national security strategy that is decidedly anti-Russian. Although attempts to prove how “isolated” Putin truly is on the geopolitical stage haven’t fared very well of late (what with Russian bombers refueling at former U.S. air bases and Putin plotting Eurasian currency unions) and although Washington’s experience with China’s AIIB membership drive seems to indicate it may be the US that is in fact isolated, The Kremlin doesn’t think The White House is likely to give up on its attempts to ostracize Russia any time soon. From a Russian Security Council statement entitled “About The US National Security Strategy”:

In the long term, the United States, in cooperation with its allies will continue the policy of political and economic isolation of Russia, including limiting its ability to export energy and the displacement of all markets for military products, while making it difficult for the production of high-tech products in Russia.

Putin’s security council then proceeds to deliver a remarkably accurate description of Washington’s foreign policy aims including the desire to show off NATO military capabilities (on full display along the Russian border currently), installing puppet governments and propping them up with financial and military support (which is precisely what’s going on now in Ukraine as the US is set to provide military assistance and also financial assistance via a Ukrainian bond issue back by the full faith and credit of the US government), and preserving US hegemony by taking unilateral action across the globe at Washington’s behest (something the US does all the time):

The Strategy emphasizes the US desire to proceed with the formation of a new global economic order. A special place in this order should take a Trans-Pacific Partnership and transatlantic trade and investment partnership that will enable the US central position in the free trade zones, covering two-thirds of the world economy. The armed forces are considered as the basis of US national security and military superiority is considered a major factor in the American world leadership. While maintaining the continuity of the plans to use military force unilaterally and anywhere in the world, as well as to maintain a military presence abroad…

Significant efforts by the US and its allies will be directed to the formation of anti-Russian policy states, with which Russia has established partnership relations, as well as to reduce Russian influence in the former Soviet Union. Continue the policy of preserving the global dominance of the United States, increasing the combat capabilities of NATO, as well as to strengthen the US military presence in the Asia-Tihokeanskom region. Military force will continue to be considered as the primary means of ensuring national security and interests of the United States. Becoming more widespread to eliminate unwanted US political regimes acquire advanced technology “color revolutions” with a high probability of their application in relation to Russia.

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“Russia would no longer fight the market. Speculators needed a cold shower, she said.”

The Central Banker Who Saved the Russian Economy From the Abyss (Bloomberg)

Panic reached the inner sanctum of the Russian central bank. It was Dec. 16 – the day Russian traders would later christen Black Tuesday – and the ruble was in a freefall.“Intervene! Intervene!” a central bank official shouted. Governor Elvira Nabiullina watched the currency on her tablet screen react to her emergency rate increase. No, she said, not this time: Russia would no longer fight the market. Speculators needed a cold shower, she said. That daring decision, related by two people with knowledge of the meeting, has begun to pay off for Nabiullina, 51, and her patron, President Vladimir Putin. Despite sanctions meant to punish Russia for its foray into Ukraine a year ago, the ruble has stabilized. Since Black Tuesday, when it plunged to a record low, the ruble has rebounded 19% against the dollar, the most among 24 emerging-market currencies.

Russia still confronts a painful recession brought on by the collapse in oil, and many of its banks are hurting. But for now, at least, the economy has stepped back from the abyss. Finance Minister Anton Siluanov last week declared the worst was over. Inside the central bank, near Red Square, the lull passes for victory. Nabiullina no longer has to squander foreign-exchange reserves in vain attempts to prop up the ruble. Now she faces the equally daunting task of binding up the wounded economy. While her central bank is nominally independent, analysts agree Putin is ultimately in charge. Yet Nabiullina has emerged as a power in her own right, with a direct line to the president.

Nabiullina isn’t afraid to speak up. When aides urged Putin to impose capital controls last year, she fought against the move and pushed for a freely floating ruble, according to people with knowledge of the matter. Putin heeded her advice — and then let Nabiullina sort out the details. “It was a historic moment because she convinced Putin to accept a market solution to a problem that threatened the whole banking system,” UBS AG Russia Chairman Rair Simonyan said. Russia might well have veered into economic isolation, he said. What Nabiullina came up with turned out to be one of the biggest financial gambles of Putin’s 15-year rule. First she raised interest rates to punishingly high levels, lifting the benchmark rate to 17% from 10.5% in one stroke. Then she stepped back from intervening on the currency market.

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“..a primary money-laundering concern..”

Banking Enclave of Andorra Shaken by US Accusations (Bloomberg)

Juan Ovelar made a quick decision when he heard the U.S. government had accused his Andorran bank of money-laundering, and immediately withdrew most of his funds. “I’m worried that everyone will do the same as I did and there will be a knock-on effect that could affect other banks,” said Ovelar, 27, a computer expert from Argentina, in an interview outside the headquarters of Banca Privada d’Andorra in the capital Andorra La Vella. The U.S. Treasury named Banca Privada d’Andorra, the country’s fourth-largest bank, a “primary money-laundering concern” on March 10. That led to its seizure by Andorran authorities, the arrest of the chief executive officer and a run on customer funds at the lender’s Spanish unit.

The bank’s fate sent tremors through Andorra, a 181-square-mile (469 km2) Catalan-speaking microstate in the eastern Pyrenees with an economy based on skiing, tax-free shopping and banking. The scandal raises risks for its financial industry, which makes up almost a fifth of the €1.8 billion economy and is too big to be bailed out by the state, said Xavier Puig, a professor at Barcelona’s Universidad Pompeu Fabra. Customers lined up at the bank’s branches to take out their money after it limited cash withdrawals to 2,500 euros a week, starting March 16. The bank’s new management, appointed by local regulators, imposed the limit after international banks severed credit lines, a person with knowledge of the situation said.

Andorra’s government is trying to convince international banks to open credit lines so customers won’t be cut off from funds, said the person, who asked not to be identified because the talks are private. Options under consideration for the bank include the sale of assets or liquidation, the person said, adding that officials are seeking a quick solution to limit the effect on other banks. “The government is acting quickly to find a solution because the consequences can be very serious,” said Puig. “They need to amputate this part so that the gangrene doesn’t extend to the rest of the body.” Fitch Ratings put the three largest Andorran banks on watch for a possible downgrade on Monday because of “potential spill-over effects.”

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A comprehensive overview of behind the scenes US war mongering.

Meet The Kagans: A Family Business Of Perpetual War (Robert Parry)

Neoconservative pundit Robert Kagan and his wife, Assistant Secretary of State Victoria Nuland, run a remarkable family business: she has sparked a hot war in Ukraine and helped launch Cold War II with Russia – and he steps in to demand that Congress jack up military spending so America can meet these new security threats. This extraordinary husband-and-wife duo makes quite a one-two punch for the Military-Industrial Complex, an inside-outside team that creates the need for more military spending, applies political pressure to ensure higher appropriations, and watches as thankful weapons manufacturers lavish grants on like-minded hawkish Washington think tanks.

Not only does the broader community of neoconservatives stand to benefit but so do other members of the Kagan clan, including Robert’s brother Frederick at the American Enterprise Institute and his wife Kimberly, who runs her own shop called the Institute for the Study of War. Robert Kagan, a senior fellow at the Brookings Institution (which doesn’t disclose details on its funders), used his prized perch on the Washington Post’s op-ed page on Friday to bait Republicans into abandoning the sequester caps limiting the Pentagon’s budget, which he calculated at about $523 billion (apparently not counting extra war spending). Kagan called on the GOP legislators to add at least $38 billion and preferably more like $54 billion to $117 billion.

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“..the greatest strategic disaster in US history.”

After a Twelve Year Mistake in Iraq, We Must Just March Home (Ron Paul)

Twelve years ago last week, the US launched its invasion of Iraq, an act the late General William Odom predicted would turn out to be “the greatest strategic disaster in US history.” Before the attack I was accused of exaggerating the potential costs of the war when I warned that it could end up costing as much as $100 billion. One trillion dollars later, with not one but two “mission accomplished” moments, we are still not done intervening in Iraq. President Obama last year ordered the US military back into Iraq for the third time. It seems the Iraq “surge” and the Sunni “Awakening,” for which General David Petraeus had been given much credit, were not as successful as was claimed at the time.

From the sectarian violence unleashed by the US invasion of Iraq emerged al-Qaeda and then its more radical spin-off, ISIS. So Obama sent the US military back. We recently gained even more evidence that the initial war was sold on lies and fabrications. The CIA finally declassified much of its 2002 National Intelligence Estimate on Iraq, which was the chief document used by the Bush Administration to justify the US attack. According to the Estimate, the US Intelligence Community concluded that:

‘[W]e are unable to determine whether [biological weapons] agent research has resumed…’ And: ‘the information we have on Iraqi nuclear personnel does not appear consistent with a coherent effort to reconstitute a nuclear weapons program.’

But even as the US Intelligence Community had reached this conclusion, President Bush told the American people that Iraq, “possesses and produces chemical and biological weapons” and “the evidence indicates that Iraq is reconstituting its nuclear weapons program.” Likewise, Defense Secretary Donald Rumsfeld’s “bulletproof” evidence that Saddam Hussein had ties with al-Qaeda was contradicted by the National Intelligence Estimate, which concluded that there was no operational tie between Hussein’s government and al-Qaeda. Even National Security Advisor Condolezza Rice’s famous statement that the aluminum tubes that Iraq was purchasing “are only really suited for nuclear weapons programs, centrifuge programs,” and “we don’t want the smoking gun to be a mushroom cloud,” was based on evidence she must have known at the time was false. According to the NIE, the Energy Department had already concluded that the tubes were “consistent with applications to rocket motors” and “this is the more likely end use.”

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“..soil in allotments contains a third more organic carbon than agricultural soil and 25% more nitrogen..”

We’re Treating Soil Like Dirt. It’s A Fatal Mistake (Monbiot)

Imagine a wonderful world, a planet on which there was no threat of climate breakdown, no loss of freshwater, no antibiotic resistance, no obesity crisis, no terrorism, no war. Surely, then, we would be out of major danger? Sorry. Even if everything else were miraculously fixed, we’re finished if we don’t address an issue considered so marginal and irrelevant that you can go for months without seeing it in a newspaper. It’s literally and – it seems – metaphorically, beneath us. To judge by its absence from the media, most journalists consider it unworthy of consideration. But all human life depends on it. We knew this long ago, but somehow it has been forgotten. As a Sanskrit text written in about 1500BC noted: “Upon this handful of soil our survival depends. Husband it and it will grow our food, our fuel and our shelter and surround us with beauty. Abuse it and the soil will collapse and die, taking humanity with it.”

The issue hasn’t changed, but we have. Landowners around the world are now engaged in an orgy of soil destruction so intense that, according to the UN’s Food and Agriculture Organisation, the world on average has just 60 more years of growing crops. Even in Britain, which is spared the tropical downpours that so quickly strip exposed soil from the land, Farmers Weekly reports, we have “only 100 harvests left”. To keep up with global food demand, the UN estimates, 6m hectares (14.8m acres) of new farmland will be needed every year. Instead, 12m hectares a year are lost through soil degradation. We wreck it, then move on, trashing rainforests and other precious habitats as we go. Soil is an almost magical substance, a living system that transforms the materials it encounters, making them available to plants.

That handful the Vedic master showed his disciples contains more micro-organisms than all the people who have ever lived on Earth. Yet we treat it like, well, dirt. The techniques that were supposed to feed the world threaten us with starvation. A paper just published in the journal Anthropocene analyses the undisturbed sediments in an 11th-century French lake. It reveals that the intensification of farming over the past century has increased the rate of soil erosion sixtyfold. Another paper, by researchers in the UK, shows that soil in allotments – the small patches in towns and cities that people cultivate by hand – contains a third more organic carbon than agricultural soil and 25% more nitrogen. This is one of the reasons why allotment holders produce between four and 11 times more food per hectare than do farmers.

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Bravo.

No One Must Go Thirsty: Water In Public Hands Is A Right (Beppe Grillo)

“Why is the water bill so high? In the last few years, have you ever tried to understand why something that should be a right is now something that makes a big hole in your savings? Someone would like to ruin the results of the 2011 referendum, in which a massive majority of the Italian people said “no” to every law that could place the handling of public water into private hands. However, in Italy, strange things are happening: water is cut off indiscriminately and without warning on a regular basis, the price of water has gone up by 95.8% in the last few years, the profits of the municipal companies are no longer being reinvested to reduce leakage but to maximise profits. Basically, those who are now managing water resources are today thinking more about making profits, rather than about providing a service.

The money we are paying in water bills is going to enrich the shareholders with generous dividends. This is a camouflaged privatisation and it is going against what was expressed as the will of the people. The 5 Star MoVement is taking to the European Parliament one of its historical battles: that of defending one of its five stars, keeping water in public hands. The proposal is simple: NO ONE MUST GO THIRSTY The World Health Organization has done the calculations: for an individual’s minimum needs between 50 and 100 litres of water a day are required. This amount must be guaranteed for all. This is why the 5 Star MoVement is proposing a service that provides a guaranteed minimum water supply for each person. It’s not acceptable to get rich by trading in water. That’s the message from the European citizens that have signed a petition asking European institutions NOT to privatise water.

1 million 800 thousand signatures for the first example of direct democracy in Europe. The Commission’s response has been disappointing because it hasn’t put forward any new legislative proposal. The principles contained in its communication are sacred but these need to be reinforced with laws, not just words. Furthermore, as regards the dreaded liberalization of public water, the Commission has underlined that it is up to the member States to make the laws. in particular, it has emphasised that the supply of water is the responsibility of the local authorities within the member State, and it is up to them to make the decisions as to whether to manage the supply directly, indirectly or by using private suppliers.

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