Nov 082020
 


David Hockney The Pond in Autumn 1 November 2020

 

Winner of Trump-Biden Race Will Be Determined By Courts (Jenna Ellis)
Nov. 7 – Biden Hasn’t Won Yet; Trump Has A Path(s) (McCann)
Life Under Biden (Jim Rickards)
Another Election Computer Glitch In Michigan Reversed (JTN)
The GOP Did Not Carry 71,000,000+ Votes, President Trump Did (sundance)
The Kafka Election: Finding a Way Out of the Maze (Miele)
Speedy COVID19 Healers Keep Producing Antibodies After Infection (F.)
The COVID-19 RT-PCR Test (Sacré)
The Narrative Problem After Peak Oil (Watkins)

 

 

Since the US had no official institution to call an election soon after the polls have closed, and people want a result fast, it has befallen on the media to make the announcement. And by and large, this hasn’t been that big a deal. But when those same media have for 4 years relentlessly hounded one of the two candidates, it should be obvious that this “system” should not be applied. If only because it has no legal status whatsoever.

However, people both in the US and abroad don’t appear to be aware of this. So when the New York Times et al declare a winner, this is seen as an “official” announcement. It is not. That won’t come until the Electoral College gathers in December (8-14th?!). And at least until then, Trump will have every right to contest the election in court. Still, “world leaders” are congratulating the “next president”. Do they really not know how this works?

The idea behind it all is obvious, of course: to make Trump look like a sore loser, and Biden the president-elect, a title the media claim they can bestow upon him. Do remember that both Biden’s and Kamala’s campaign were considered dead in the water at one point, before they were magically resurrected by the party machine, which ensured that two people very unpopular in their own party now lead the ticket. Be careful what you wish for.

In that light. I found this intriguing. Twitter adds a warning to this Trump tweet: “Official sources may not have called the race when this was Tweeted”. I haven’t seen one instance where they attached the same warning to tweets about Biden winning and being President Elect. But wouldn’t that be the same thing?

 

 

 

 

 

 

From one of Trump‘s lawyers.

Winner of Trump-Biden Race Will Be Determined By Courts (Jenna Ellis)

Despite projections by many news organizations Saturday that former Vice President Joe Biden has won the presidential election and defeated President Trump, the media don’t have the power to decide the outcome of American elections. Legal challenges by the Trump reelection campaign, where I serve as a legal adviser, are still before the courts and we await judicial rulings on our challenges. In other words, as the late baseball great Yogi Berra said in 1973, referring to the National League pennant race: “It ain’t over till it’s over.” We all want to know who will be president for the next four years. But all Americans should want accurate results above all, no matter who they supported in the race.

So it’s important for everyone to realize that Trump campaign legal challenges must be resolved in the courts before we have an official and legally binding decision on who won the 2020 presidential election. President Trump will continue fighting to ensure a fair and accurate election result. He is right to do this, because it’s vital that we keep our elections free and fair. As Americans, we should all be able to recognize that our rule of law governs and our election process works accurately. For President Trump, the Trump 2020 campaign and the Republican National Committee, the rule of law, fundamental fairness and accuracy in election results are the goals. None of the legal fights we are waging are novel arguments or anything more than an effort to ensure a fair and accurate election outcome.


Our nation went through a legal challenge to the results in Florida during the 2000 presidential election between then-Texas Gov. George W. Bush and then-Vice President Al Gore, for example. Twenty years ago, some news organizations prematurely said Gore won that very close election and would become the next president of the United States. Those news organizations later pulled back their projections. Legal challenges by the Bush campaign went all the way to the Supreme Court. The nation’s highest court determined that George W. Bush won the election. Imagine how different history would have turned out if Bush has simply thrown in the towel as soon as he heard someone on TV say Gore won the race.

Bill Binney

Read more …

Molly McCann is on Sidney Powell’s team.

Nov. 7 – Biden Hasn’t Won Yet; Trump Has A Path(s) (McCann)

The media called the election today, as many predicted would happen. As noted yesterday, the media and the Democrats were desperate to call it. They want to shift momentum to Biden and frame Trump as a sore loser, and worse, a despot attempting a coup. This election is still in play. Arizona is not fully in yet, and Trump continues to close his margin there. The latest results were still breaking for Trump with the margins he needs to close the gap and take the state. We’ll see. Georgia is going to go to a recount no matter what. Pennsylvania is a disaster zone…for the Democrats. I’m not sure if the 100,000 provisional ballots have been counted yet, but they hadn’t been counted when they called the election for Biden. Those could swing Trump back into the lead in PA. There is still so much at play. Are we looking at razor-thin margins? Yes. Has Biden won yet? No. If we could hold Georgia and Arizona outright, I think we could knock out Pennsylvania at SCOTUS. This is the actual electoral map right now:

So, does Trump have a path forward? Yes. First of all, Trump could still win in a relatively traditional manner. Because remember, even though the media is demanding Trump concede, recounts in elections happen with relative regularity. People contest results and we go through processes to make sure everything is above board. 2020 is election insanity on an unprecedented scale (I think), but procedurally, this is not some crazy aberration in politics or elections. So, Trump might still be able to win traditionally, and I pray he does. But it might take more than that.


If we lose Arizona and Georgia and Pennsylvania, then Trump will have to kick it up a notch. He’ll need to block certification and pursue more aggressive measures to win. It should go without saying that I am advocating legal aggressive measures, but given the present circumstances, perhaps best to clarify. I hope he pursues some of those options sooner rather than later.

Read more …

“Biden is running for president in name only. He has never been that bright. He has accomplished little in his almost fifty years in public service. He is physically frail and clearly suffering acute cognitive decline.”

Life Under Biden (Jim Rickards)

This was a historic, turning-point election. Turning-point elections are the most historic because they put the country on a different path: Party Politics in 1800, Populism in 1828, Civil War in 1860, Liberalism in 1932, and Conservatism in 1980. Every 100 years, America gets a president who shakes the establishment and cleans out the Washington sewers. In the 1800s it was Andrew Jackson. In the 1900s it was Teddy Roosevelt. In the 2000s, it’s Donald Trump. There is no doubt that Trump and Biden would lead America in almost opposite directions with profound consequences for the future of the country and for future elections. If Trump had won, we would have gotten more of the same, which is saying a lot.

Trump would offer more tax cuts (or at least preserve the tax cuts we’ve received). He’d offer less regulation, a major accomplishment of his first term. Trump would continue the trade war with China and expand it in ways that would move jobs back to the United States (or at least get them out of China into friendlier countries such as Vietnam and India). He would also curtail Chinese theft of U.S. intellectual property and cut off Chinese tech investment in the United States. Trump has also stopped foreign installation of sensitive 5G telecommunications systems from Huawei and ZTE, which are hidden arms of the Chinese military. Trump built alliances to constrain Chinese expansion efforts. His main breakthrough was the Quad Alliance of the U.S., Japan, Australia and India that effectively surrounds and can interdict China’s sea lanes to the Pacific and Indian Oceans.

Trump also made great strides toward Middle East peace with the first two Israeli-Arab peace treaties in twenty-five years – one with the UAE and one with Bahrain. Other peace treaties with Israel may have followed. Finally, Trump was imposing crippling sanctions on Iran that would have forced it to negotiate in good faith on its nuclear program or crush its economy in ways that would also impede its efforts at terrorism and nuclear weapons. With Trump, what you see is what you get: Lower taxes, less regulation, more jobs, no new wars, peace in the Middle East, and peace through strength in confronting Iran and China. With four more years, Trump could have accomplished his goals and perhaps be ranked among the ten most significant presidents of all time.

Biden is another matter entirely. First of all, Biden is running for president in name only. He has never been that bright. He has accomplished little in his almost fifty years in public service. He is physically frail and clearly suffering acute cognitive decline. If Joe Biden does win, he’ll be 78 years old when sworn in and 82 years old at the end of his first term. Both marks are the oldest in U.S. history for a president. Some individuals are still sharp in their late 70s. Biden is not one of them. The result is that Biden will never be president de facto. With Trump out of the picture, Democrats wouldn’t need him anymore. Steps would be taken at some point to remove him from office on the grounds of mental incapacity under the Twenty-fifth Amendment. Nancy Pelosi recently proposed legislation to set up a commission to do just that as prescribed by the U.S. Constitution.

But while he remains in office, who will be the real president in a Biden administration? There are three camps contending for power: The first camp is the Biden family led by Joe Biden’s wife Dr. Jill Biden, his son Hunter Biden, and Joe Biden’s brothers Jim Biden and Frank Biden. These are the individuals who have been enriched through association with Joe Biden by using or selling access to Biden’s power to win lucrative investment management roles, consulting engagements, construction contracts and other remunerative pursuits. The Biden family will want to keep Joe in power (with Jill Biden pulling the strings) in order to keep their shakedown operation intact and avoid scrutiny.

The second camp is led by Kamala Harris and those who control her, including the Obama crew and the Resistance. If Biden is removed under the Twenty-Fifth Amendment, Harris becomes Acting President. If Biden resigns under threat of removal, Harris becomes the president. She would be a front for the Obamas and Valerie Jarrett who would operate through a cabinet consisting of Obama family retainers including Susan Rice, Samantha Power, Sally Yates and Eric Holder.

The third camp is led by the extreme left wing of the party including Bernie Sanders, Alexandra Ocasio-Cortez (and The Squad), Elizabeth Warren and radical organizations such as BLM. This group is already embedded in the Biden campaign as part of a deal whereby Bernie Sanders agreed to end his primary campaign and endorse Joe Biden in exchange for Biden adopting most of the Sanders platform. The most likely outcome is that the Obama crew and the Bernie Bros will join forces and run the Biden family off the road. The Bidens will be allowed to keep their Chinese and Russian money and will not face any scrutiny or prosecution in exchange for going away quietly.

Healing- “burn down the Republican Party” – Jennifer Rubin

Read more …

“County Worker Reportedly Submitted Two Sets Of Absentee Ballots Twice”

Another Election Computer Glitch In Michigan Reversed (JTN)

A Michigan Republican received a welcome shock when his apparent loss at the polls was reversed due to the county’s fix of a “technical glitch” that originally had him losing the election. Adam Kochenderfer was originally declared the loser in his race against Democrat Melanie Hartman for a position on the Oakland County Board of Commissioners. The narrow race appeared to end with Hartman the winner by just 104 votes. Yet the county clerk soon discovered that a set of absentee ballots had actually been reported in the voter totals twice. Once the duplicate set was removed, Kochenderfer came out ahead by 1,127 votes.


“This is proof that our process of checks and balances works,” County Clerk Lisa Brown said after the discovery. “A methodical canvass is an essential tool to ensure an accurate count and precise results.” Kochenderfer’s was the second race in Michigan so far in which a glitch was revealed to have displayed the incorrect outcome of a race. An alleged software glitch in Antrim County, Michigan earlier this week incorrectly awarded thousands of winning votes to Joe Biden; a recount of ballots subsequently revealed Trump was the county winner.

Soros voting machines

Read more …

Can Trump set up that long-awaited third party?

The GOP Did Not Carry 71,000,000+ Votes, President Trump Did (sundance)

As the republican establishment contemplates positioning themselves amid President Trump’s resolute intent to highlight a 2020 election filled with with demonstrable fraud, they would be prudent to check their political ego. President Trump has created a movement and collected the largest factual constituency of voters in the nation. This is the hill we stand upon, there is no other fallback position. As of this writing the indefatigable leader of the MAGA movement gathered 71 million votes for his re-election, and still climbing. Subtract the fraudulent and manipulated ‘mail-in’ ballots from the Biden operation and you have a reality of 71 million MAGA army members staring toward an opposition front containing battalions of cardboard cutouts.

No amount of media spin is going to change the reality of that political landscape. Regardless of whether Donald Trump’s legal arsenal is able to overcome the entrenched media operations drum-beating a deafening noise to distract from the 2020 fraud, that MAGA army is solidly behind our leader…. so consider this: If President Trump takes that army into a new political party of his choosing, that new party is structurally set to lay waste to any candidate within both wings of the Democrat and Republican assembly. A Trump inspired new political party can wipe out the illusion of the Democrat/Republican two-party system; specifically because much of the Trump movement consists of former democrats and brand new voters.


The MAGA coalition is the most diverse, widest and deepest part of the entire American electorate. President Trump’s army consists of every creed, color, race, gender, ethnicity and orientation. It is a truly color-blind coalition of middle America patriots and middle-class voters that cuts through the political special interest groups. Quite simply Trump’s MAGA army is the ultimate political splitter party. No Republican will ever hold office in the next decade without the blessing of President Trump; and there is absolutely no current confidence that President Trump will not lay waste to the system if the GOP acquiesces to the transparent fraud that exists behind the Biden-Harris sham.

Read more …

“News channels don’t count a damn thing. They just report numbers shipped out by election offices in various counties across the country, and if CNN or any other news outfit were actually doing their jobs, they would be alert for patterns suggesting fraud in the numbers..”

The Kafka Election: Finding a Way Out of the Maze (Miele)

The 2020 election is a nightmare from which I — along with millions of others — am trying to awake. Like many dark dreams, it is uncertain exactly what is happening. Phantasmic ballots come and go. Seemingly insurmountable Republican victories disappear into the mouth of a vote-munching machine and come out the other side as excremental — oops, I mean incremental — Democratic leads just beyond the reach of a recount. And as in any nightmare worth its salt, just when you think it’s about to end, a new trap door opens and you fall into yet one more level of confusion and chaos in a maze with no exit in sight. But this is America. It’s not supposed to be a Kafka novel.

So how did we get to a place where, days after the election was held, despite many proclamations by news organizations to the contrary, we still don’t know who won, we don’t know who voted, and we don’t know for sure whether the rules were followed in either voting or counting? Various irregularities have been reported in five big cities, all in strategic states, and particularly in Detroit, Mich.; Philadelphia, Pa.; Atlanta, Ga.; Milwaukee, Wis.; and Las Vegas, Nev. The allegations range from mysterious ballot drops that seem to show tens of thousands of votes for Joe Biden and zero votes for President Trump, inexplicable record turnouts in late-counting counties (all Democrat-dominated) that far surpass turnouts in counties in other states where the votes were counted on a timely basis; and of course the illegal banning of election observers in those very counties where the most outrageous anomalies are reported.

Democrats tell us that there is nothing to see here, and the compliant media dutifully moves along, unwilling to investigate on its own or even express any concern about potential wrongdoing. Even Fox News has turned into a lapdog for the Democrat Party, calling Arizona for Joe Biden long before anyone could know for sure which way the state would turn. On Thursday night, as Fulton County was just about to swing Georgia into the Biden column, CNN’s John King arrogantly lectured Donald Trump: “Guess what, Mr. President? We’re gonna count the votes, and if they favor you, we’re gonna show that. And if they don’t, we’re gonna show that. That’s how democracy works. We’re just counting the votes.”


Um, no, that’s not the way it works. News channels don’t count a damn thing. They just report numbers shipped out by election offices in various counties across the country, and if CNN or any other news outfit were actually doing their jobs, they would be alert for patterns suggesting fraud in the numbers they report. If “just counting the votes” were all that it took to have a democracy, then Vladimir Putin’s Russia would be a glorious example of democracy, as would the Islamic Republic of Iran.

Read more …

We’re 11 months into a pandemic. And still we know so little.

Speedy COVID19 Healers Keep Producing Antibodies After Infection (F.)

New research has identified a group of Covid-19 patients who are capable of speedy recoveries and can produce protective antibodies for months after their initial infection, a finding that runs counter to a lot of recent research showing that antibody levels — and, potentially, immunity — rapidly decline following infection and points to the possibility that some people have immune systems that are better able to fight the virus. Researchers, led by a team at Brigham and Women’s Hospital, found that almost one in five coronavirus patients sustained antibody production for several months after infection, in contrast with other patients who experienced a rapid decline in antibody levels.

These patients also tended to recover faster than other Covid-19 patients, cutting their recovery time by about a third, as well as showing differences in two types of immune cell that play key roles in the immune system, the researchers wrote in Cell, a top scientific journal. It is unclear whether the findings are representative of the population as a whole, and the researchers themselves stressed that future investigations must look beyond the limited demographic they studied, with most volunteers being adult white women with mild Covid-19. Dr. Duane Wesemann, one of the researchers and an associate professor at Harvard Medical School, said the immune response of these quick healers was like an insurance policy — “it’s the immune system’s way of adding a potential layer of protection against future encounters with the virus,” he said.

Wesemann added that it was possible the findings “point to a type of immune response” that is better at dealing with Covid-19, which could be important in the fight to control the virus. Understanding how the immune system responds to Covid-19 over time is a vital component in controlling the pandemic, underpinning public health measures, treatments, and how vaccines are developed and administered. A lot of early attention has focused on antibodies, proteins produced by the immune system that can lock onto the virus, with research generally showing sharp declines following infection. These are relatively easy to study, but do not give a complete picture of the body’s immune system.


There is a lot that remains unknown about how immunity to Covid-19 works and how that changes over time. To date, many studies show sharp declines in antibody levels in the months following infection, though antibodies, or the lack thereof, do not necessarily indicate immunity to infection. Reinfections, though rare, have been reported, with some reports suggesting that the second infection is worse than the first.

Read more …

This is good. A bit long and opinionated and all over the place, but a lot of useful information.

The COVID-19 RT-PCR Test (Sacré)

All current propaganda on the COVID-19 pandemic is based on an assumption that is considered obvious, true and no longer questioned: Positive RT-PCR test means being sick with COVID. This assumption is misleading. Very few people, including doctors, understand how a PCR test works. RT-PCR means Real Time-Polymerase Chain Reaction. In French, it means: Réaction de Polymérisation en Chaîne en Temps Réel. In medicine, we use this tool mainly to diagnose a viral infection. Starting from a clinical situation with the presence or absence of particular symptoms in a patient, we consider different diagnoses based on tests.

In the case of certain infections, particularly viral infections, we use the RT-PCR technique to confirm a diagnostic hypothesis suggested by a clinical picture. We do not routinely perform RT-PCR on any patient who is overheated, coughing or has an inflammatory syndrome! It is a laboratory, molecular biology technique of gene amplification because it looks for gene traces (DNA or RNA) by amplifying them. In addition to medicine, other fields of application are genetics, research, industry and forensics. The technique is carried out in a specialized laboratory, it cannot be done in any laboratory, even a hospital. This entails a certain cost, and a delay sometimes of several days between the sample and the result.

Today, since the emergence of the new disease called COVID-19 (COrona VIrus Disease-2019), the RT-PCR diagnostic technique is used to define positive cases, confirmed as SARS-CoV-2 (coronavirus responsible for the new acute respiratory distress syndrome called COVID-19). These positive cases are assimilated to COVID-19 cases, some of whom are hospitalized or even admitted to intensive care units. Official postulate of our managers: positive RT-PCR cases = COVID-19 patients. This is the starting postulate, the premise of all official propaganda, which justifies all restrictive government measures: isolation, confinement, quarantine, mandatory masks, color codes by country and travel bans, tracking, social distances in companies, stores and even, even more importantly, in schools.


This misuse of RT-PCR technique is used as a relentless and intentional strategy by some governments, supported by scientific safety councils and by the dominant media, to justify excessive measures such as the violation of a large number of constitutional rights, the destruction of the economy with the bankruptcy of entire active sectors of society, the degradation of living conditions for a large number of ordinary citizens, under the pretext of a pandemic based on a number of positive RT-PCR tests, and not on a real number of patients.

Read more …

A long review of an old topic.

The Narrative Problem After Peak Oil (Watkins)

For most of the last decade, we have been sold a techno-utopian fairy tale about “peak oil demand.” Instead of “running out” of oil, the problem for the oil industry, we were told, was that the switch to “clean energy” and to technologies like electric cars and hydrogen-powered buses meant that demand for oil was declining. Within a decade or so, they claimed, our need for oil would disappear entirely as we ushered in a “fourth industrial revolution” based around digital products and services powered by renewable energy.


As with all narratives, there is just enough truth in this story to give it a veneer of credibility. Per capita demand for oil – and, indeed, for fossil fuels generally – has been declining. So that is you are a middle class metropolitan liberal – the kind of people who edit and write for the establishment media – you look around and notice your friends driving electric cars; you uncritically swallow the press statements of the windfarm owners; and you observe the declining per capita consumption of oil; and you tell yourself that this is peak oil demand in action. The data says something very different:

Despite a Herculean effort to bring non-renewable renewable energy-harvesting technologies online, they still account for less than five percent of global primary energy consumption. Worse still, they have not replaced fossil fuels; they have just been added to the global mix. And while developed states like Germany and the UK have gone a long way toward decarbonising their domestic electricity generation, a large part of their true pollution has been offshored to Asia. Only if they are prepared to forego all of the fossil-fuel powered goods they import can they truly claim to be embarking upon a new industrial revolution. Until then, the “green new deal” is just another name for the same old imperialism that they have always practiced.

Peak oil – including from fracking and tar sands – finally occurred in 2018. Hardly anyone noticed because – as happened in the USA in 1970 – everyone assumed that it would be a temporary blip. Oil extraction in 2019 was not substantially lower than 2018; but there was no month in 2019 when extraction was higher than it had been in November 2018. And, of course, in 2020 the world discovered more urgent issues to worry about. Nevertheless, oil extraction – and oil demand – plummeted as a result of the various state responses to the pandemic. Some wells will be shut permanently as the cost of reopening them is too high. Others will reopen, but only if the price of oil rises considerably. Pipelines and refineries will also have to be repaired. On the demand side, even the most optimistic economists and politicians have ceased talking about “V-shaped recoveries.” With Europe and parts of the USA embarking on pre-Christmas lockdowns, demand across the global economy is expected to be crushed. This spells lower rather than higher oil prices in the next couple of years.


It is in this that we glimpse the part of the peak oil story that was often overlooked by the first peak oilers. The simple assumption that falling oil production would lead to higher oil prices failed to examine the impact of oil prices on the wider economy. Nevertheless, the economy is primarily an energy system upon which the secondary financial economy is merely a claim. Rather than examining the price of oil, we have to understand its energy cost. If we begin with a certain amount of energy, then a fraction must be devoted to securing future energy. Another fraction must be set aside for maintaining the infrastructure required to keep the system running. A third fraction must be set aside to invest in the future energy supply. These, though, will only account for a small part of the energy available to us. The remainder will power the much larger, non-energy economy

Read more …

 

 

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Michelle Malkin

 

 

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Aug 142020
 
 August 14, 2020  Posted by at 12:35 pm Finance Tagged with: , , , , , , , , , , , , ,  11 Responses »


Egon Schiele Self-Portrait with Lowered Head 1912

 

 

Regular Automatic Earth guest writer Alexander Aston this time comes not from Zimbabwe, Cambridge or Greece, but from South Carolina, where he is on family business. And that’s where he’s venting his anger about. I’m pretty sure we would all benefit from doing more of that, get it all off our chests. I think maybe the main issue with it in the present day circumstances is you have to make sure it’s your anger, and not somebody else’s that you’re merely parroting.

I personally like Alexander’s notion of: “America, a Country For Old Men”.

 

 

 

Alexander Aston: Is there any more perfect metaphor for a society in terminal decline than the senescent Joe Biden? The U.S. election has boiled down to a choice between the authoritarian versions of Mr. Magoo and P.T. Barnum. Truly, “there’s a sucker born every minute” is a far more apropos motto for the country than E. Pluribus Unum. The Republicans have adopted a Christian Nationalism that identifies with a New York shyster that says all the shitty things they’ve been feeling for decades while blaming the least powerful. It’s always easier to kick down than punch up and moral courage is not a common trait.

Likewise, the Democrats smug self-satisfied conviction of ethical superiority and sense of entitlement to the votes of every women, brown person and leftist makes them not only insufferable but delusional. The DNC managed to crush the momentum and energy of one of the most significant left- wing grassroots movements in US history. They have demoralised a huge swath of the under-45 crowd and subverted an actual political vision (regardless of whether you agree with it or not) in favour of a man with an abysmal record and signs of growing cognitive impairment. The DNC platform offers zero substantive policy other than “not Trump” (a policy that’s going to have a very short honeymoon in the face of cascading systems failure).

The Democrats have made no concessions on even one important progressive/left issue. Now they have picked a morally bankrupt prosecutor who’s deeply entangled with the prison industrial complex at a time in which “defund the police” has coalesced into a key feature of American discourse. Yet, liberals seem completely shocked and aghast by the fact that there are large numbers of young folks, minorities and women that are unwilling to shut up and put up. The level of enthusiasm beyond the party faithful, for those still willing to vote Democrat, amounts to the ever inspiring “I’ll grit my teeth.”

 

Meanwhile, I know middle aged folks that have never voted in their lives who have signed up just to support Trump. In other words, they are motivated. Like it or lump it, that’s some of the real political complexity behind the vacuous narrative management of the MSM. On a national level, the American sense of reality is becoming more unhinged than a schizophrenic dropping acid after a weeklong meth binge. George Soros funded Antifa and Putin’s army of trolls are all monsters of the same fevered social imagination. On its current trajectory, the American Right will soon believe anyone to the left of Attila the Hun is a “far-left radical.”

Likewise, U.S. liberals will be left haunted and terrified by the spectre of Russian agents stealing their precious bodily fluids. Meanwhile, the virus will continue to rage, and corporate feudalism will further entrench itself as the benefits of imperial citizenship rapidly fade. The only thing that’s certain is that huge swaths of Americans still won’t actually understand what is happening to them and continue to blame the opposing factions of management, figments of their propaganda, the dispossessed and the marginalised. I don’t believe the specific outcome of the American election is all that relevant anymore.

The sad truth is that the United States is collapsing under the weight of a microscopic entity and its own systemic contradictions. The various narratives of what is happening and what it means to be an American have become so wildly divergent that there are multiple parallel realities operating in the United States. What’s frightening is how few realise the diversity and complexity of these various perspectives, fears and aspirations. Regardless of who wins the election, trust in the political legitimacy of the American system is being fatally undermined. If the margin of the election is close, it is guaranteed that one side will not accept the results.

 

If the election is swept, then the winning party will be saddled with a crisis of unparalleled proportions in the history of the country. Furthermore, neither party has the political vision nor competence to actually address the challenges that beset them. The U.S. would need leadership on par with a Lincoln or Aurelius to rescue the political system. Whoever is in power will rapidly face multiple and intersecting forms of systemic breakdown, resistance and noncompliance as the extent of the economic devastation becomes truly apparent.

The first part of the 2020’s will consist of material deprivation, civil unrest and increasingly robust challenges to the United States’ geostrategic position. The more that authoritarians try to exert control in a high entropy environment (robbing Peter to pay Paul), the faster the system will fall apart. Ultimately, I believe that the break-up of the United States is all but inevitable at present. What I hope is that it will be a relatively peaceful dissolution and reorganisation. What should terrify us all is the prospect of real violence as the various factions and coalitions jockey for power in the new reality. A few truly smooth brained idiots think that they just need to tool up and go mow down a few “liberal snowflakes” so that they can return to the 1950’s by Christmas.

 

A conflict in North America would be a clusterfuck that would make Syria’s civil war look like a game of checkers. Forget electoralism and eschew romantic notions of purification through violence. Build solidarity networks, figure out how to make your communities economically, socially and psychologically resilient. My suggestion would be that Mutualism, Libertarian Municipalism and Democratic Confederalism offer some good starting points for thinking about these things. I would recommend setting up a micro- factory in your community so that you can start manufacturing necessary tools and goods on a local level. Here are some freely available schematics: Civilization Starter Kit.

Try to appreciate the limitations of your own understanding so that you might be more compassionate towards others. Don’t blame people for having problems they don’t know how to fix, try helping them instead. Some things, once broken, cannot be mended. This is very true for societies. I sincerely wish you all the best of luck. Please be good to one another and defend those less powerful and fortunate than yourself.

P.S. If you are in a swing state you should follow your conscience, but it should be beneath any person’s dignity to vote for either party in their safe states. If you don’t understand how the American electoral system works at this point then shame on you, stop berating people for voting Green in Montana or Libertarian in California, they’re actually displaying some political acumen.

 

 

 

 

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Feb 012020
 


Russell Lee Street scene. Spencer, Iowa 1936

 

Coronavirus “HIV Insertions”: Fears Over Artificially Created Bioweapon (ZH)
Chinese Furious At Officials Who Lied About Human Transmission (ZH)
China Voices Anger At US Travel Ban (G.)
Australia Bars Entry To Foreign Nationals Traveling From Mainland China (R.)
What Trump Acquittal Would Mean For 2020 Election (BBC)
Is Bernie’s Hour of Power at Hand? (Buchanan)
Hillary Clinton Blames Bernie Sanders For Disunity In Democratic Party (WE)
DNC Members Discuss Rules Change To Stop Sanders At Convention (Pol.)
Democrats Announce New Debate Rules Likely To Allow Bloomberg To Join (R.)
The FBI Has Been Lying About Seth Rich (Craig Murray)
Flynn Prosecution Exposed As Massive FBI and DOJ Abuse Of Power (NYP)
Soros: Facebook, Zuckerberg In Cahoots With Trump To Win 2020 Election (USAT)
Zuckerberg: Facebook’s New Approach ‘Is Going To Piss Off A Lot Of People’ (CNN)
Tales From the Crypt (Jim Kunstler)

 

Apparently because of an article it wrote Wednesday about Chinese virologist Peng Zhou, which was noted by someone at BuzzFeed, a site without an identity, read exclusively be people who have none either, Twitter banned the Zero Hedge site that @Jack follows:

Long live the thought police. Tyler suspects this has something to do with publishing Peng Zhou’s phone# and email, but also points out these are freely available on his employer’s website.

 

Today’s 2019nCoV numbers may show a little leveling off, but there’s no way we can be sure.

• Confirmed cases: 11,821 in China, 124 abroad. Total 11,945 (yesterday: 9.821)

• Deaths: 259 (up 46 from yesterday)

• Discharged from hospitals on the Chinese mainland: 243

• Hubei province: 1347 new cases and 45 deaths on Jan 31 compared with 2102 new cases and 46 deaths nationwide.

What I found interesting to see is this: “Xinyu, a city in Jiangxi province – adjacent to Hubei – said 17 new cases had been confirmed in the city, and that 15 of the afflicted patients were infected by a single person.” That may say something else -again- about the R-naught (R0) infection rate. About which -just like the mortality rate- there are a lot of different ideas still.

 

 

From a new study by Gabriel Leung et al, published by the Lancet, comes this graphic:

 

 

Make from it what you want. Looks scary. Majority of Wuhan infections are now without a link to the fish/meat market.

Coronavirus “HIV Insertions”: Fears Over Artificially Created Bioweapon (ZH)

Over the past few days, the mainstream press has vigorously pushed back against a theory about the origins of the coronavirus that has now infected as many as 70,000+ people in Wuhan alone (depending on whom you believe). The theory is that China obtained the coronavirus via a Canadian research program, and started molding it into a bioweapon at the Institute of Virology in Wuhan. Politifact pointed the finger at Zero Hedge, in particular, though the story was widely shared across independent-leaning media. The theory is that the virus, which was developed by infectious disease experts may have originated in the Wuhan-based lab of Dr. Peng Zhou, China’s preeminent researcher of bat immune systems, specifically in how their immune systems adapt to the presence of viruses like coronavirus and other destructive viruses.


Somehow, the virus escaped from the lab, and the Hunan fish market where the virus supposedly originated is merely a ruse. Now, a respected epidemiologist who recently caught flack for claiming in a twitter thread that the virus appeared to be much more contagious than initially believed is pointing out irregularities in the virus’s genome that suggests it might have been genetically engineered for the purposes of a weapon, and not just any weapon but the deadliest one of all. In “Uncanny similarity of unique inserts in the 2019-nCoV spike protein to HIV-1 gp120 and Gag”, Indian researchers are baffled by segments of the virus’s RNA that have no relation to other coronaviruses like SARS, and instead appear to be closer to HIV. The virus even responds to treatment by HIV medications.

“3D modelling of the protein structure displayed that these insertions are present at the binding site of 2019-nCoV. Due to the presence of gp120 motifs in 2019-nCoV spike glycoprotein at its binding domain, we propose that these motif insertions could have provided an enhanced affinity towards host cell receptors. Further, this structural change might have also increased the range of host cells that 2019-nCoV can infect. To the best of our knowledge, the function of these motifs is still not clear in HIV and need to be explored. The exchange of genetic material among the viruses is well known and such critical exchange highlights the risk and the need to investigate the relations between seemingly unrelated virus families.”

Read more …

Xi is being praised now, but Beijing sat on his hands for a full month in December.

Chinese Furious At Officials Who Lied About Human Transmission (ZH)

For reasons that haven’t been shared with the public, the WHO has chosen to lavish praise on Beijing, insisting that travel to China isn’t dangerous even as more governments impose restrictions, and claiming that Beijing has been completely transparent and a ‘model’ for how countries should handle outbreaks like this. When pressed by a reporter, Dr. Tedros, the director general of the WHO, replied that local authorities in Wuhan had been “very transparent” with the Chinese people by publishing up-to-date notices about new cases and deaths. First of all, many suspect that Beijing hasn’t been entirely truthful as far as these tallies are concerned.

Second, it’s not so much about what Beijing told the Chinese people. Everybody knows the government censors anything that might reflect badly upon the Communist Party. So to claim that the government has been completely transparent with the people is almost disingenuous. Of course that’s not true. But the real issue is what they did and didn’t tell the international news media, and their international partners. Now, a new study has exposed the Communist Party’s lies. The research has once again moved back the timeline of when senior Chinese leaders knew about the outbreak in Wuhan, suggesting that they waited longer to act, and longer to inform the international community, than they had led the world to believe. The claim appeared in a top American medical journal. From Nikkei Asian Review:

“The deadly new coronavirus from Wuhan was spreading from person to person as early as mid-December, weeks before China officially confirmed such transmission, government-funded Chinese researchers report in a top American medical journal. The paper in the New England Journal of Medicine analyzes data on the first 425 confirmed cases in the central Chinese city of Wuhan, where the outbreak originated. “On the basis of this information, there is evidence that human-to-human transmission has occurred among close contacts since the middle of December 2019,” it reads. The paper notes that seven health care workers contracted the virus between Jan. 1 and Jan. 11 – significant evidence of human-to-human transmission. The findings sharply contrast with the accounts of Wuhan health authorities who had maintained until mid-January that there was “no clear evidence” that the virus could be passed among humans. Officials also claimed Jan. 11 that no health care workers had been infected.”

But…but…but…the local authorities in Wuhan said they didn’t have evidence of person to person transmission until mid-January! That’s increasingly difficult to believe, seeing as the signs were clearly there after the first wave of patients was diagnosed and examined and interrogated. Research suggests fewer than 60% of the early virus-carriers had been directly linked to the seafood market. The rest were associates, friends and relatives of the people who had. That, right there, is evidence of human-to-human transmission – and this was known as early as mid-December.

Some frustrated Chinese have chosen to defy censors and lash out on Chinese social media networks like Weibo. “Many of the paper’s authors work for the Chinese Center for Disease Control and local counterparts. Many were among the first batch of medical experts to have entered Wuhan for on-the-ground inspections, developing “a tailored surveillance protocol to identify potential cases” on Jan. 3. “They all knew,” a user on the Weibo microblogging platform said. “They just didn’t say, but lied to us.” “If only they could have told people earlier, we could have taken better preventive measures, and the virus would not have spread this fast,” another wrote.”

Read more …

China know very well there is no other solution than isloation.

China Voices Anger At US Travel Ban (G.)

China has reacted angrily to a US entry ban on foreign nationals who have visited the country in the past two weeks, as countries around the world raced to contain the coronavirus outbreak amid a rising death toll. The US administration on Friday declared the virus a public health emergency, although it insisted the risk to Americans remained low. Foreign nationals who have recently been to China, where the death toll from the virus rose by 46 overnight to 259, will be barred from entering the US from Sunday. American citizens who have travelled within the past two weeks to Hubei province – where the outbreak is thought to have begun – will be placed in quarantine for 14 days, the longest incubation period for the virus. Those who visited other parts of mainland China will undergo health checks and 14 days of “monitored self-quarantine”.


The Chinese government criticised the measures, saying it contradicted the World Health Organization’s (WHO) appeal to avoid travel bans and implied that Beijing was not doing enough to contain the virus’s spread beyond China’s borders. “Just as the WHO recommended against travel restrictions, the US rushed in the opposite direction,” said foreign ministry spokeswoman Hua Chunying. “[It is] certainly not a gesture of goodwill.” The row came as another airline, Qantas, suspend direct flights to China and the organisers of the Tokyo 2020 Olympics were forced to respond to unfounded online rumours that the Games had been cancelled due to the outbreak. They insisted they were “not considering” cancelling the Olympics and Paralympics. “We will work closely with the IOC and other concerned bodies to draw any countermeasures whenever necessary,” they said.

Read more …

Et tu, Qantas?

Australia Bars Entry To Foreign Nationals Traveling From Mainland China (R.)

Prime Minister Scott Morrison said Australia will deny entry to all foreign nationals traveling from mainland China from Saturday due to the increasing threat from the coronavirus epidemic. Morrison also announced that Australia was raising its travel guidance for China to the highest level, advising people against visiting the country at all. “We’re in fact operating with an abundance of caution in these circumstances,” Morrison told reporters in Sydney. “So Australians can go about their daily lives with confidence.” The new incoming travel ban includes anybody who has been in China from Feb. 1, whether they have traveled directly from the country or through another port.


It extends an existing ban on travel from the province of Hubei, the center of the epidemic, to the entire country. Australian citizens and permanent residents returning home are exempt from the ban but are required to isolate themselves for 14 days after their arrival. Australian authorities have identified 10 coronavirus cases in Australia, but no deaths. The Australian travel restrictions came just hours after the United States announced border curbs on foreign nationals who have been in China amid fears that the virus could spread further overseas. Around two dozen countries have reported confirmed cases of the virus, but the vast majority of those infected remain in China, where the number of deaths stood at 259 on Saturday.

Read more …

Hunter Biden was kicked out of the Navy on Feb 14 2014. Burisma hired him, with his lack of skills in oil and Ukraine and all, at $85k a month in April 2014. Not suspect at all.

Still would like to know who debunked the theory though.

And some proof that Trump is “scared to death” Biden will be the nominee. I still see no reason he would be.

What Trump Acquittal Would Mean For 2020 Election (BBC)

Barring an unforeseen and unexpected blockbuster development, a largely party-line vote will acquit him of the two charges brought by the House of Representatives, which itself approved those articles of impeachment on a nearly party-line vote. Both sides will soon be left to sift through the political rubble just nine months before a national election that has the entire House, more than a third of the Senate and the presidency itself on the ballot. According to polls, the nation’s political disposition is much as it was before the impeachment process began. The US is sharply divided along partisan lines. The president’s approval ratings hover in the low to mid-40s, roughly where they’ve been the entirety of his term in office. His re-election chances are dicey but far from slim.

The decision not to seek witnesses – which polls show Americans overwhelming wanted – may be forgotten before long. After all, Democrats and Republicans had very different views about what “witnesses” means. The former wanted to hear from Trump administration officials like John Bolton and Mick Mulvaney, who they think could corroborate the charges against the president. The latter sought to call Joe Biden’s son Hunter, head impeachment manager Adam Schiff and the whistleblower – and will be just as happy to see the whole matter put to rest. Impeachment didn’t change the existing political disposition in the US; instead, it was subsumed by it.

[..] There is no evidence indicating that Biden engaged in any kind of misconduct in Ukraine, but in politics such technicalities don’t always matter. True or not, if hurts, it hurts. And during the opening arguments for the president’s defence team, former Florida Attorney General Pam Bondi did her best to make it hurt. In her remarks, she sounded more like a prosecutor – laying out what she saw as the case against Hunter Biden and, by connection, his father, former Vice-President Joe Biden. She said the Ukrainian energy company Burisma gave a board position to the Biden son in to attempt to influence US policy.

She questioned whether Joe Biden did anything as point-man for the Obama administration’s Ukraine policy that may have helped protect his son from investigation. That suspicion alone, she continued, should justify the president’s decision to ask the Ukrainian government to look into the Bidens. “All we are saying is that there was a basis to talk about this, to raise this issue, and that is enough,” she said. [..] Biden has tried to turn Republican interest in damaging his political prospects into a strength, tweeting last week that [Iowa Republican Senator Jodi]Ernst and Trump are “scared to death I’ll be the nominee”. An October poll, however, showed that 40% of Democrats and majorities of Republicans and independents think Hunter Biden’s Ukraine dealings are a valid campaign issue.

Read more …

Bernie gets attacked from the right, not just his own party. Pat Buchanan legitimizes his candidacy.

Is Bernie’s Hour of Power at Hand? (Buchanan)

Can a septuagenarian socialist who just survived a heart attack and would be 80 years old in his first year in office be elected president of the United States? It’s hard to believe but not impossible. As of today, Bernie Sanders looks like one of the better, if not best, bets for the nomination. Polls have him running first or second in the first three contests: Iowa on Monday, and then New Hampshire and Nevada. If Bernie can best main rival Joe Biden in Iowa, he will likely thump Joe in New Hampshire. Biden’s campaign, built around “electability,” could suffer a credibility collapse before he reaches South Carolina, where Joe is banking on his African American base to rescue him if necessary and give him a send-off victory straight into Super Tuesday.

If Sanders can beat Biden two or three times in the first four primaries in February, the last remaining roadblock on Sanders’ path to the nomination could be Mike Bloomberg’s billions. Hillary Clinton may sneer, “Nobody likes him,” but Bernie has a large, dedicated, loyal following, especially among millennials, and tens of thousands more small-dollar donors than any other Democratic candidate. He is flush with cash. He has a radical agenda that appeals to the ideological left and the idealistic young. The rising star of the party, Alexandria Ocasio-Cortez, is campaigning alongside him. And, say what you will, Sanders is no trimmer or time-server. He has consistently voted his values and views. He voted no to Bush 41’s Gulf War, no to Bush 43’s Iraq War, no to NAFTA, no to GATT.

In the ’80s, when President Reagan battled the Marxist Sandinistas in Nicaragua, Sanders was on the other side. But what makes Sanders an appealing candidate for the Democratic nomination may prove poisonous to him as a party nominee in the fall.

Read more …

The Democratic Patry’s wrecking ball strikes again. Hillary won’t share that title with Schiff.

Hillary Clinton Blames Bernie Sanders For Disunity In Democratic Party (WE)

Former Secretary of State Hillary Clinton accused Sen. Bernie Sanders and his support network of being responsible for disunity within the Democratic Party. In a Friday podcast, Clinton called the behavior of Sanders supporters “distressing,” assigning blame to them for the outcome of the 2016 election. Clinton beat Sanders for the Democratic Party’s presidential nomination in 2016, but not after a bitter primary contest in which the Vermont independent ran a surprisingly competitive campaign. “All the way up until the end, a lot of people highly identified with his campaign were urging people to vote third-party, urging people not to vote,” Clinton, 72, told Emily Tisch Sussman on her podcast Your Primary Playlist. “It had an impact.”


Clinton lauded former President Barack Obama’s behavior during the 2008 election, when he defeated her for the party’s nomination, claiming he helped unify the Democratic Party in a way Sanders did not eight years later. “That cannot happen again,” she said, alluding to the 2020 election. “I don’t care who the nominee is. I don’t care. As long as it’s somebody who can win, and as long as it’s somebody who understands politics is the art of addition, not subtraction.”

Read more …

The DNC aims to make sure the Dems have no chance in the election. For their track record, see 2016.

DNC Members Discuss Rules Change To Stop Sanders At Convention (Pol.)

A small group of Democratic National Committee members has privately begun gauging support for a plan to potentially weaken Bernie Sanders’ presidential campaign and head off a brokered convention. In conversations on the sidelines of a DNC executive committee meeting and in telephone calls and texts in recent days, about a half-dozen members have discussed the possibility of a policy reversal to ensure that so-called superdelegates can vote on the first ballot at the party’s national convention. Such a move would increase the influence of DNC members, members of Congress and other top party officials, who now must wait until the second ballot to have their say if the convention is contested.

“I do believe we should re-open the rules. I hear it from others as well,” one DNC member said in a text message last week to William Owen, a DNC member from Tennessee who does not support re-opening the rules. Owen, who declined to identify the member, said the member added in a text that “It would be hard though. We could force a meeting or on the floor.” Even proponents of the change acknowledge it is all but certain not to gain enough support to move past these initial conversations. But the talks reveal the extent of angst that many establishment Democrats are feeling on the eve of the Iowa caucuses.

Sanders is surging and Joe Biden has maintained his lead nationally, but at least three other candidates are widely seen as viable. The cluster raises the specter of a convention requiring a second ballot. If Sanders wins the Iowa caucuses on Monday and continues to gain momentum, it is possible he could arrive at the convention with the most delegates — but without enough to win the nomination on the first ballot. It is also possible that he and Elizabeth Warren, a fellow progressive, could arrive at the convention in second and third place, but with more delegates combined than the frontrunner.

https://twitter.com/TulsiGabbard/status/1223356793805398018

Read more …

Little Mike to save the nation. Not tainted by failed impeachment: ideal.

Democrats Announce New Debate Rules Likely To Allow Bloomberg To Join (R.)

The Democratic Party on Friday announced new rules around how presidential hopefuls can qualify to take part in debates, changes likely to allow billionaire media mogul Michael Bloomberg to join the stage in February. Starting with the debate on Feb. 19 in Nevada, candidates who want to participate will no longer have to demonstrate grassroots support by collecting donations from thousands of donors, according to a press release from the party. Bloomberg is funding his campaign entirely with his own money, estimated at $60 billion, meaning that while he has climbed in the polls, he could not qualify for debates under the old rules.


“We are thrilled that voters could soon have the chance to see Mike Bloomberg on the debate stage, hear his vision for the country, and see why he is the strongest candidate to defeat Donald Trump and bring our country together,” Bloomberg campaign Manager Kevin Sheekey said in a statement. A late entry to the competition to take on Republican President Donald Trump in November, Bloomberg contributed more than $200 million from his own fortune to his bid as of the end of 2019, according to disclosures his campaign filed on Friday with the Federal Election Commission. [..] “To now change the rules in the middle of the game to accommodate Mike Bloomberg, who is trying to buy his way into the Democratic nomination, is wrong. That’s the definition of a rigged system,” Jeff Weaver, a senior advisor for Sanders’ campaign, said in an emailed statement.

Read more …

Peter Strzok and Lisa Page. Sound familiar?

The FBI Has Been Lying About Seth Rich (Craig Murray)

A persistent American lawyer has uncovered the undeniable fact that the FBI has been continuously lying, including giving false testimony in court, in response to Freedom of Information requests for its records on Seth Rich. The FBI has previously given affidavits that it has no records regarding Seth Rich. A Freedom of Information request to the FBI which did not mention Seth Rich, but asked for all email correspondence between FBI Head of Counterterrorism Peter Strzok, who headed the investigation into the DNC leaks and Wikileaks, and FBI attorney Lisa Page, has revealed two pages of emails which do not merely mention Seth Rich but have “Seth Rich” as their heading. The emails were provided in, to say the least, heavily redacted form.

The major point is that the FBI claimed it had no records mentioning Seth Rich, and these have come to light in response to a different FOIA request that was not about him. What other falsely denied documents does the FBI hold about Rich, that were not fortuitously picked up by a search for correspondence between two named individuals? To look at the documents themselves, they have to be read from the bottom up, and they consist of a series of emails between members of the Washington Field Office of the FBI (WF in the telegrams) into which Strzok was copied in, and which he ultimately forwarded on to the lawyer Lisa Page.


The opening email, at the bottom, dated 10 August 2016 at 10.32am, precisely just one month after the murder of Seth Rich, is from the media handling department of the Washington Field Office. It references Wikileaks’ offer of a reward for information on the murder of Seth Rich, and that Assange seemed to imply Rich was the source of the DNC leaks. The media handlers are asking the operations side of the FBI field office for any information on the case. The unredacted part of the reply fits with the official narrative. The redacted individual officer is “not aware of any specific involvement” by the FBI in the Seth Rich case. But his next sentence is completely redacted. Why?

Read more …

Wait, what did I just say: “Peter Strzok and Lisa Page. Sound familiar?”

Flynn Prosecution Exposed As Massive FBI and DOJ Abuse Of Power (NYP)

Here’s another black eye for the Justice Department’s Obama-era leadership: The case against Gen. Michael Flynn is in full collapse. Federal prosecutors just backed down from their demand that Flynn — President Trump’s first, short-lived national security adviser — serve jail time for lying to FBI investigators, telling a court Wednesday that probation would be a “reasonable” sentence. In fact, Justice had long wanted leniency, since Flynn cooperated fully with special counsel Robert Mueller’s investigations. But last month it started seeking up to six months of confinement — mainly because he’s no longer taking responsibility for his crime.

“I am innocent,” he writes in a new filing, explaining that he pleaded guilty in 2017 to making false statements to the FBI because he felt helpless to fight the charges: He’d already had to sell his home to pay legal costs and was told his son could be indicted, too. The “crime” came days after the inauguration, when FBI agents Peter Strzok and Joe Pientka questioned Flynn at the White House about his conversations with Russian Ambassador Sergey Kislyak. Yet the FBI had already reviewed transcripts of the calls and found nothing illicit. The visit was a fishing expedition: The agents even skipped the customary heads-up to the president’s Office of Legal Counsel — aiming to avoid having a lawyer present for the talk.

Even so, Strzok and Pientka wound up finding “no indication” that Flynn had lied to them. But then FBI lawyer Lisa Page (Strzok’s mistress at the time) instructed them to alter their official writeup of the conversation to say otherwise. And that’s the entire basis of the charges against him.

Read more …

George is 89 and afraid global dominance will escape him.

Soros: Facebook, Zuckerberg In Cahoots With Trump To Win 2020 Election (USAT)

George Soros blasted Facebook at Davos, accusing the company of conspiring to help President Trump win re-election. “I think there is a kind of informal mutual assistance operation or agreement developing between Trump and Facebook,” Soros said at the World Economic Forum in Switzerland. “Facebook will work together to reelect Trump, and Trump will work to protect Facebook so that this situation cannot be changed and it makes me very concerned for 2020.” The liberal billionaire did not offer any proof, and Facebook denied it, but Soros doubled down on his anti-Facebook talk Friday in an opinion piece published in The New York Times.

“I believe that Mr. Trump and Facebook’s chief executive, Mark Zuckerberg, realize that their interests are aligned – the president’s in winning elections, Mr. Zuckerberg’s in making money,” Soros wrote. Soros also said neither Zuckerberg nor Sheryl Sandberg, the company’s chief operating officer, should be left in charge of Facebook. “They follow only one guiding principle: maximize profits irrespective of the consequences,” Soros wrote. Facebook pushed back in a statement. “While we respect Mr. Soros’ right to voice his opinion, he’s wrong. The notion that we are aligned with any one political figure or party runs counter to our values and the facts.” Last week in Davos Trump was asked about Zuckerberg. “I heard he’s gonna run for president,” Trump told CNBC’s Squawk Box. “That wouldn’t be too frightening I don’t think.”

There’s no evidence that Zuckerberg and Trump have any kind of pact. But it’s true that Facebook gave Trump a big boost in 2016. Just ask Facebook. In January, a leaked internal post from longtime Facebook executive Andrew “Boz” Bosworth credited Trump’s 2016 win to the president’s digital advertising campaign. In 2020, Trump campaign manager Brad Parscale is focused again on Facebook. “Was Facebook responsible for Donald Trump getting elected?” Bosworth wrote in the Dec. 30 post. “I think the answer is yes, but not for the reasons anyone thinks. He didn’t get elected because of Russia or misinformation or Cambridge Analytica. He got elected because he ran the single best digital ad campaign I’ve ever seen from any advertiser.”

Read more …

Posing as controversial. Most people will buy it too.

Zuckerberg: Facebook’s New Approach ‘Is Going To Piss Off A Lot Of People’ (CNN)

Mark Zuckerberg says Facebook will stand up for principles like free expression and encryption, even if it means facing a backlash. “This is the new approach, and I think it’s going to piss off a lot of people. But frankly, the old approach was pissing off a lot of people too, so let’s try something different,” Zuckerberg said at the Silicon Slopes Tech Summit in Utah on Friday. The Facebook (FB) cofounder and CEO said his company’s aim for a long time was to not do anything that would be deemed as “too offensive,” but he is now changing that approach in the face of what he deems as excessive censorship.

“Increasingly we’re getting called to censor a lot of different kinds of content that makes me really uncomfortable,” Zuckerberg said, while acknowledging Facebook’s responsibility to purge its platforms of content related to terrorism, child exploitation and incitement to violence. “We’re going to take down the content that’s really harmful, but the line needs to be held at some point,” he added. Zuckerberg also said Facebook would continue to fight for encryption, another stance that has sparked controversy in recent months. The company has come under fire for allowing politicians to lie in ads, at a time when Twitter has decided to ban political advertising altogether.

Zuckerberg has been increasingly vocal about Facebook’s determination to stick to its positions even when they prove unpopular. His comments in Utah came days after he said on the company’s latest earnings call that his goal for the next decade “isn’t to be liked, but to be understood.” The 35-year-old tech billionaire reiterated that sentiment on Friday. “If you’re not out there standing for things that people care about then it’s not possible for people to feel that strongly about what you’re doing,” he said.

Read more …

“It’s hard to think of a more loathsome figure in US political history than Adam Schiff.”

Tales From the Crypt (Jim Kunstler)

What a fatal mistake, allowing Rep. Adam Schiff (D-CA) to make himself the face of the Democratic Party. They would have been better off with another scion of Hollywood: the Phantom of the Opera. This grubby seditionist has marched the party into a wilderness of deceit and knavery that taints them all, and when this grotesque impeachment episode is over, a new chapter of consequences will open that should leave the party for dead. It’s hard to think of a more loathsome figure in US political history than Adam Schiff.

[..] The impeachment he led was crippled from the start with violations of process and errors of logic of exactly the kind that drives his party’s Woke hysteria with its assaults on free speech, its vicious “cancel” culture, its reckless race-hatred, its depraved Transsexual Reading Hours, and its neurotic obsession with Russian phantoms — a matrix of beliefs that would embarrass a conclave of medieval necromancers. Of course, the impeachment was just the latest sortie in a three-year campaign to confound and conceal the arrant misdeeds of a network of government employees in the Departments of State and Justice, the FBI, the CIA, and the remnants of Barack Obama’s White House, who are all connected and all liable for prosecution, not to mention characters in congress such as the co-seditionist Mark Warner (D-VA), who trafficked the Steele dossier around official Washington.

The “Whistleblower” in the current impeachment fiasco was a CIA agent and John Brennan protégé who had worked for Joe Biden both in the US and on trips to Ukraine when he was detailed to the Obama White House. Hunter Biden was known to be a dangerous abscess of grift years before Mr. Trump ever rode down that fabled golden escalator, and the “WB” was present for White House meetings with Ukrainian officials when embarrassing questions about Burisma and the Bidens came up. His supposed right to anonymity is fairytale and the time is not far off when he’ll have to answer for his deeds, whether it’s in a Senate committee or a grand jury.

Read more …

 

 

 

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Nov 222019
 
 November 22, 2019  Posted by at 9:17 am Finance Tagged with: , , , , , , , , , , ,  16 Responses »


Dorothea Lange We’ll be in California yet. We’re not going back to Arkansas 1938

 

Ex-FBI Lawyer Investigated For Altering FISA Documents in Russia Probe (CNN)
FBIs Vetting Of Informants Like Christopher Steele Slammed By IG (Solomon)
Ken Starr: We’re ‘Nowhere Close’ To Impeachable Offenses (Fox)
Giuliani: “Massive Pay-For-Play” Soros-Ukraine Scheme Facilitated By US (ZH)
Trump Welcomes Senate Impeachment Trial, Wants Bidens, Schiff To Testify (R.)
The Civilian Government Doesn’t Owe Deference to Military Officers (McMaken)
Democratic Establishment Reaches Boiling Point With Tulsi Gabbard (Pol.)
Corbyn Declares War On ‘Rich And Powerful’ With Radical Manifesto (Ind.)
Greek Coast Guard Says 400 Refugees, Migrants Rescued From Sea In Past Day (K.)
Economics For The Future – Beyond The Superorganism (Nate Hagens)

 

 

Horowitz and Durham stir.

Comment I picked up: “It’s important to note the media source aspect because normally this type of leak would go to the Washington Post or New York Times first; ergo, it likely stems as a personal leak to one of the former allied FBI officials now working for CNN.

FBI officials are now working for the media outlet, CNN, that is providing the leaks; ie. former FBI Deputy Director, Andrew McCabe; the spokesman for James Comey, Josh Campbell; a former FBI agent, Asha Rangappa; or the former FBI chief legal counsel, James Baker. All now work for CNN.”

Ex-FBI Lawyer Investigated For Altering FISA Documents in Russia Probe (CNN)

An FBI official is under criminal investigation after allegedly altering a document related to 2016 surveillance of a Trump campaign adviser, several people briefed on the matter told CNN. The possibility of a substantive change to an investigative document is likely to fuel accusations from President Donald Trump and his allies that the FBI committed wrongdoing in its investigation of connections between Russian election meddling and the Trump campaign. […] Horowitz turned over evidence on the allegedly altered document to John Durham.


[…] It’s unknown how significant a role the altered document played in the FBI’s investigation of Page and whether the FISA warrant would have been approved without the document. The alterations were significant enough to have shifted the document’s meaning and came up during a part of Horowitz’s FISA review where details were classified, according to the sources. […] The identity or rank of the FBI employee under investigation isn’t yet known, and it’s not clear whether the employee still works in the federal government. No charges that could reflect the situation have been filed publicly in court.

Read more …

And there’s more FBI…

Also John Solomon, on Twitter, about the Dems’ latest hero of the day: “Fiona Hill suggested my Ukraine stories were Russian propaganda. If she’s such an expert she would know my main character Yuriy Lutsenko was a political prisoner of the Russian backed Yanukovych regime and the US pleaded for his release and applauded his appointment as prosecutor”

FBIs Vetting Of Informants Like Christopher Steele Slammed By IG (Solomon)

The most troubling revelation in the report, however, may be that some of the FBI analysts used to vet informants complained they were “discouraged from documenting conclusions and recommendations” about an informant’s credibility or reliability. One analyst, for instance, reported being told not to document a request to polygraph a suspect informant. And multiple FBI officials admitted efforts to keep the validation reports of informants void of derogatory information because FBI “field office do not want negative information documented” that could aid defense lawyers or stop informants from becoming government witnesses at trial. Such behavior “may have increased the likelihood that red flags or anomalies were omitted” about long-term informants, the 63-page report warned. Such concerns were widely held.

For instance, one member of a joint Justice Department-FBI committee known as the HSRC that approved long-term informants’ service reported being “deeply concerned that the limited scope of the long-term validation review may potentially be omitting important information or critical red flags.” The report also included one very important piece on the FBI’s reliance on informants: it showed the bureau spends an average of about $42 million a year on them. This IG report did not mention Steele, arguably the FBI’s most famous informant of recent years. But Horowitz is expected to release a massive report next month on possible failures and abuses by the FBI in the Russia collusion investigation, including efforts to use Steele’s dossier to help secure a Foreign Intelligence Surveillance Act warrant to surveil a former Trump campaign adviser.

The FBI’s reliance on Steele has raised significant public concerns, including that he was being paid to do his work to find dirt on Trump by the opposition research firm for Hillary Clinton and the Democratic National Committee, had expressed a bias against Trump and had been leaking to the news media while working for the FBI. His source relationship was ended because of the latter concern. In addition, an FBI spreadsheet created to validate Steele’s allegations against Trump found most of the information in the dossier to be unconfirmed, debunked or simply open source information found on the Internet, sources have told me.

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That seems obvious.

Ken Starr: We’re ‘Nowhere Close’ To Impeachable Offenses (Fox)

The testimony from witnesses in the House Democrats’ impeachment hearings has come “nowhere close” to laying out impeachable offenses, former Independent Counsel Ken Starr said Thursday. Appearing on “America’s Newsroom” with host Bill Hemmer, Starr said that the witness testimony does not “reach the level of treason, bribery, or other high crimes and misdemeanors.” “My assessment of the evidence [thus] far? Nowhere close. The evidence is conflicting and ambiguous,” he told Hemmer. Starr said that European Union Ambassador Gordon Sondland’s testimony Wednesday falls into the same category since Sondland gave conflicting information about whether President Trump sought a quid pro quo with Ukraine involving military aid and an investigation of former Vice President Joe Biden and his son Hunter.

“Clearly in his opening statement, a quid pro quo. And then, he says later, ‘Well, the president said, ‘I don’t want anything. Right? President Zelensky should just do the right thing.’ [Those are] the words from the president himself,” he continued. “So, the record at the end of the day is likely to be ambiguous at best, conflicting at best … and you shouldn’t charge and you cannot convict a sitting president on the basis of conflicting and ambiguous evidence and destabilize the American government,” Starr argued. [..] “So, at least, I hope the Democrats will have that conversation about we don’t like the way foreign policy was conducted here, the delay [in providing aid] and so forth.

That’s debatable, but it is not the stuff of impeachment,” he told Hemmer. Later in the morning, after hearing testimony from David Holmes, a U.S. State Department official in Ukraine, and former National Security Council aide Fiona Hill, Starr said he does not believe a “corrupt bargain” by Trump is being proven. Starr said Hill’s testimony about Russian interference in the 2016 election was “eloquent,” particularly about the Kremlin trying to “sow seeds of discord” on both sides. He said it’s “willful blindness” for the president’s critics to dismiss allegations that Ukrainian officials were supporting Hillary Clinton.

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What came out again in yesterday’s hearing is the neverending RussiaRussia topic. Which is still presented as gospel, though its was debunked by Mueller, while at the same time the role of Ukraine, never investigated, is called a conspiracy theory.

Giuliani: “Massive Pay-For-Play” Soros-Ukraine Scheme Facilitated By US (ZH)

Rudy Giuliani claims that US diplomats have been acting to further the interests of billionaire George Soros in Ukraine in what he described as a “massive pay-for-play” scheme which included falsifying evidence against President Trump. “The anti-corruption bureau is a contradiction,” Giuliani told Glenn Beck, regarding Ukraine’s National Anti-Corruption Bureau (NABU), which Joe Biden helped establish when he was the Obama administration’s point-man on Ukraine. As a bit of background, in December of 2018, a Ukrainian court ruled that NABU director Artem Sytnyk “acted illegally” when he revealed the existence of Trump campaign manager Paul Manafort’s name to Journalist and politician Serhiy Leschenko in a “black ledger” containing off-book payments to Manafort by Ukraine’s previous administration.

The ruling against Sytnyk and Leshchenko was later overturned on a technicality. In December, The Blaze obtained audio of Sytnyk bragging about helping Hillary Clinton in the 2016 US election. “They took all the corruption cases away from the prosecutor general, they gave it to the anti-corruption bureau, and they got rid of all the cases that offended Soros, and they included all the cases against Soros’ enemies,” Giuliani told Beck. “One of the first cases they dismissed was a case in which his [Soros’s] NGO, AntAC, was supposed to have embezzled a lot of money, but not only that, collected dirty information on Republicans to be transmitted, gotten by Ukrainians, to be transmitted to this woman Alexandra Chalupa and other people who worked for the Democratic National Committee,” Giuliani continued.

[..] Giuliani described his reaction when he discovered the Ukrainian collusion that undermined the accusations of the Democrats made against the president. “Hallelujah! I now have what a defense lawyer always wants: I can go prove somebody else committed this crime!” Giuliani said. Giuliani explained to Beck that he had gone to Ukraine seeking exculpatory evidence, that which would exonerate his client, the president, in the special counsel Robert Mueller investigation. When Giuliani was asked directly about the identity of the whistleblower, he said that he could not speak about the matter publicly, and could not indicate if he knew the identity or not.

He also claimed that there were several prosecutors in Ukraine currently who were willing to testify about the collusion, but they were being blocked by the U.S. State Department. When prompted by Beck, he said he would provide for him the names of those individuals off air.

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And Ciaramella the whistleblower.

Trump Welcomes Senate Impeachment Trial, Wants Bidens, Schiff To Testify (R.)

President Donald Trump wants an impeachment trial to go forward in the U.S. Senate because he would receive due process there and he expects Democratic presidential candidate Joe Biden would be among the witnesses, a White House spokesman said on Thursday. “President Trump wants to have a trial in the Senate because it’s clearly the only chamber where he can expect fairness and receive due process under the Constitution,” spokesman Hogan Gidley said in a statement. “We would expect to finally hear from witnesses who actually witnessed, and possibly participated in corruption – like Adam Schiff, Joe Biden, Hunter Biden, and the so-called Whistleblower, to name a few,” Gidley said, referring to House of Representatives Intelligence Committee Chairman Schiff, who is leading an impeachment inquiry into Trump.

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Major point. All the way back to the Founders.

The Civilian Government Doesn’t Owe Deference to Military Officers (McMaken)

On Tuesday, Congressional impeachment hearings exposed an interesting facet of the current battle between Donald Trump and the so-called deep state: namely, that many government bureaucrats now fancy themselves as superior to the elected civilian government. In an exchange between Rep. Devin Nunes (R-CA) and Alexander Vindman, a US Army Lt. Colonel, Vindman insisted that Nunes address him by his rank. After being addressed as “Mr. Vindman,” Vindman retorted “Ranking Member, it’s Lt. Col. Vindman, please.” Throughout social media, anti-Trump forces, who have apparently now become pro-military partisans, sang Vindman’s praises, applauding him for putting Nunes in his place.

In a properly functioning government — with a proper view of military power — however, no one would tolerate a military officer lecturing a civilian on how to address him “correctly.” It is not even clear that Nunes was trying to “dis” Vindman, given that junior officers have historically been referred to as “Mister” in a wide variety of times and place. It is true that higher-ranking offers like Vindman are rarely referred to as “Mister,” but even if Nunes was trying to insult Vindman, the question remains: so what? Military modes of address are for the use of military personnel, and no one else. Indeed, Vindman was forced to retreat on this point when later asked by Rep. Chris Stewart (R-UT) if he always insists on civilians calling him by his rank.

Vindman blubbered that since he was wearing his uniform (for no good reason, mind you) he figured civilians ought to refer to him by his rank. Of course, my position on this should not be construed as a demand that people give greater respect to members of Congress. If a private citizen wants to go before Congress and refer to Nunes or any other member as “hey you,” that’s perfectly fine with me. But the important issue here is we’re talking about private citizens — i.e., the people who pay the bills — and not military officers who must be held as subordinate to the civilian government at all times. After all, there’s a reason that the framers of the US Constitution went to great pains to ensure the military powers remained subject to the will of the civilian government. Eighteenth and nineteenth century Americans regarded a standing army as a threat to their freedoms. Federal military personnel were treated accordingly.

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Michael Tracey: “Democratic senators anonymously trashing Tulsi because she has the audacity to debate other candidates… at a debate. “

Democratic Establishment Reaches Boiling Point With Tulsi Gabbard (Pol.)

Tulsi Gabbard trashed the Democratic Party as “not the party that is of, by and for the people,” accused Kamala Harris of trafficking in “lies and smears and innuendo” and attacked Pete Buttigieg as naive. Her performance at Wednesday’s debate earned an attaboy from the Trump War Room. And some rank-and-file Democrats are at wit’s end with the congresswoman who Hillary Clinton called “the favorite of the Russians.” “The question is whether she seriously hopes to be the nominee or if she has another agenda … her attacks on other candidates and her positions on issues seem very personal, not so much about a set of policies or worldview,” said Sen. Richard Blumenthal (D-Conn.). Bernie Sanders has “a coherent set of principles. Elizabeth Warren’s the same. I don’t perceive a fixed set of principles or worldview on her part.”


Demonstrating how divisive her campaign has become, the Trump War Room tweeted out a video clip of Gabbard attacking her own party with a “100” emoji. It received 4,500 retweets and 15,000 likes. “She sort of seems to be filling a pretty strange lane. Is there a part of the party that hates the party?” said Sen. Chris Murphy (D-Conn.). “It’s a little hard to figure out what itch she’s trying to scratch in the Democratic Party right now.” The Hawaii congresswoman’s presence on the debate stage is becoming a headache for the party as she uses the platform to appeal to isolationists, dissatisfied liberals and even conservatives. She has managed to secure a spot on the debate stage as more mainstream candidates like Sen. Michael Bennet (D-Colo.) and Gov. Steve Bullock (D-Mont.) failed to meet polling and donor thresholds to participate.

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I think something like this is inevitable, but I also think the timing is not quite there. Nice graph that shows it’s not really extravagant spending as is claimed.

Corbyn Declares War On ‘Rich And Powerful’ With Radical Manifesto (Ind.)

Jeremy Corbyn declared war on the “rich and powerful” with a general election manifesto that raises £83bn in new taxes on corporations and the wealthy to fund free broadband, the abolition of university tuition fees and a 5 per cent pay rise for public-sector workers. In a surprise move, the Labour leader announced an £11bn one-off windfall tax on oil and gas companies to pay for a “green industrial revolution” which he said would create a million environmental jobs and put the UK on track to achieve “the substantial majority” of necessary carbon emission reductions by 2030.


In a pugnacious address in Birmingham designed to breathe new life into Labour’s challenge for power and turn round its current deficit in the polls, Mr Corbyn said he was ready to accept “the hostility of the billionaires” in order to deliver what he termed “a manifesto of hope” for the bulk of the British people. He said Labour’s programme would bring an end to a system “rigged” in favour of big corporations and the super-rich. But Tories accused him of planning a “reckless spending spree”, while energy trade body OGUK warned that any additional taxes would “drive investors away and damage the long-term competitiveness of the UK’s offshore oil and gas industry”.

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Not pretty.

Greek Coast Guard Says 400 Refugees, Migrants Rescued From Sea In Past Day (K.)

Greece’s Coast Guard said Friday it rescued 400 refugees and migrants in the last 24 hours in 10 different incidents in the sea area near the city Alexandroupolis and the islands of Lesvos and Chios. Authorities also arrested three people believed to be migrant traffickers. Meanwhile, two ferries carrying 96 refugees and migrants from the islands of Chios, zeros and Kos arrived at the port of Piraeus on Friday morning, as part of the government’s efforts to decongest migrant camps. The new arrivals will be sent to different accommodation facilities in the mainland.

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New study by my friend Nate Hagens. I haven’t been able to read the whole thing yet.

Economics For The Future – Beyond The Superorganism (Nate Hagens)

“The real problem of humanity is the following: we have paleolithic emotions; medieval institutions; and god-like technology.”– E.O. Wilson

Despite decades of warnings, agreements, and activism, human energy consumption, emissions, and atmospheric CO2 concentrations all hit new records in 2018. If the global economy continues to grow at about 3.0% per year, we will consume as much energy and materials in the next ±30 years as we did cumulatively in the past 10,000. Is such a scenario inevitable? Is such a scenario possible? Simultaneously, we get daily reminders the global economy isn’t working as it used to such as rising wealth and income inequality, heavy reliance on debt and government guarantees, populist political movements, increasing apathy, tension and violence, and ecological decay. To avoid facing the consequences of our biophysical reality, we’re now obtaining growth in increasingly unsustainable ways.

The developed world is using finance to enable the extraction of things we couldn’t otherwise afford to extract to produce things we otherwise couldn’t afford to consume. With this backdrop, what sort of future economic systems are now feasible? What choreography would allow them to come about? In the fullness of the Anthropocene, what does a hard look at the relationships between ecosystems and economic systems in the broadest sense suggest about our collective future? Ecological economics was ahead of its time in recognizing the fundamental importance of nature’s services and the biophysical underpinnings of human economies. Can it now assemble a blueprint for a ‘reconstruction’ to guide a way forward?

Before articulating prescriptions, we first need a comprehensive diagnosis of the patient. In 2019, we are beyond a piecemeal listing of what’s wrong. A coherent description of the global economy requires a systems view: describing the parts, the processes, how the parts and processes interact, and what these interactions imply about future possibilities. This paper provides a brief overview of the relationships between human behavior, the economy and Earth’s environment. It articulates how a social species self-organizing around surplus has metabolically morphed into a single, mindless, energy-hungry “Superorganism.” Lastly, it provides an assessment of our constraints and opportunities, and suggests how a more sapient economic system might develop.

Read more …

 

Today is the 56th anniversary of the murder of JFK.

 

 

 

 

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Nov 222018
 


Rembrandt van Rijn Study of the Head and Clasped Hands of a Young Man as Christ in Prayer 1655

 

Mortgage Rates Slide May Be Too Late For The Housing Market (MW)
A $9 Trillion Corporate Debt Bomb Is ‘Bubbling’ In The US Economy (CNBC)
Multiple Risks Are Converging on Markets (Rickards)
May In Brussels Dash As Merkel Threatens To Pull The Plug On Brexit Summit (G.)
Salvini Ready To ‘Confront EU’ After Italy’s Budget Rejected Again (G.)
Facebook Admits Targeting George Soros After He Criticized Company (MW)
House GOP To Hold Hearing Into DOJ Probe Of Clinton Foundation (Hill)
Clinton Foundation Donations Plummet 90% (ZH)
Tyres And Synthetic Clothes ‘Biggest Causes Of Microplastic Pollution’ (G.)
Former New York Times Chief Lawyer: Rally to Support Julian Assange (Timm)

 

 

Despite Fed rate hikes, mortgage rates fall. An ominous sign. Maybe we should even say: mortgage rates fall because of Fed rate hikes. Is the pond getting smaller, or are there fewer fish?

Mortgage Rates Slide May Be Too Late For The Housing Market (MW)

Rates for home loans tumbled as turmoil rocked global financial markets, but any reprieve in rates may come too late for would-be home buyers or refinancers. The 30-year fixed-rate mortgage averaged 4.81% in the November 21 week, down 13 basis points, mortgage liquidity provider Freddie Mac said Wednesday. That’s the biggest weekly decline since January 2015 and the lowest level for the popular product since early October. The 15-year fixed-rate mortgage averaged 4.24%, down 12 basis points during the week. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.09%, down from 4.15%. Those rates don’t include fees associated with obtaining mortgage loans.

Fixed-rate mortgages follow the U.S. 10-year Treasury note, although with a slight delay. As a global stock sell-off has raged over the past week, bonds have been the best house in a bad neighborhood. The yield on the benchmark 10-year bond touched a six-week low Monday. Bond yields decline as prices rise, and vice versa. Meanwhile, this week has brought a raft of fresh information on the housing market, little of it cheery. Sales of already-owned homes perked up in October, but are still lower than the year-ago selling pace by more than 5%. Home builders broke ground on more — but not enough — homes. And one fresh data point bears watching: mortgage applications for newly-constructed houses are plunging, according to the Mortgage Bankers Association.

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Forgive me for presuming there are several such debt bombs.

A $9 Trillion Corporate Debt Bomb Is ‘Bubbling’ In The US Economy (CNBC)

At first glance, it looks like a $9 trillion time bomb is ready to detonate, a corporate debt load that has escalated thanks to easy borrowing terms and a seemingly endless thirst from investors. On Wall Street, though, hopes are fairly high that it’s a manageable problem, at least for the next year or two. The resolution is critical for financial markets under fire. Stocks are floundering, credit spreads are blowing out and concern is building that a combination of higher interest rates on all that debt will begin to weigh meaningfully on corporate profit margins. “There is angst in the marketplace. It’s not misplaced at all,” said Michael Temple, director of credit research at asset manager Amundi Pioneer.

“But are we at that moment where this thing blows sky high? I would think that we’re not there yet. That’s not to say that we don’t get there at some point over the next 12 to 18 months as rates continue to move higher.” [..] Over the past decade, companies have taken advantage of low rates both to grow their businesses and reward shareholders. Total corporate debt has swelled from nearly $4.9 trillion in 2007 as the Great Recession was just starting to break out to nearly $9.1 trillion halfway through 2018, quietly surging 86 percent, according to Securities Industry and Financial Markets Association data. Other than a few hiccups and some fairly substantial turbulence in the energy sector in late-2015 and 2016, the market has performed well.

In fact, Fitch Ratings forecasts bond defaults for 2019 at the lowest since 2013, with leveraged loans at the lowest since 2011. Such high debt levels are “certainly something to take notice of,” said Eric Rosenthal, Fitch’s senior director of U.S. leveraged finance. “In terms of the systemic risk, at the moment it’s not there.” One reason markets worry about debt is that there’s not as much cash around to cover it. The cash-to-debt ratio for corporate borrowers fell to 12 percent in 2017, the lowest ever.

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It’s starting to feel like a siege.

Multiple Risks Are Converging on Markets (Rickards)

Warnings of economic collapse are no longer confined to the fringes of economic analysis but are now coming from major financial institutions and prominent economists, academics and wealth managers. Leading financial elites have been warning of coming collapses and dangers. These warnings range from the IMF’s Christine Lagarde, Bridgewater’s Ray Dalio, the Bank for International Settlements and many other highly regarded sources. Just when we think we’ve seen enough of these, another one arrives. This time it’s the legendary Paul Tudor Jones, who manages Tudor Investment. I’ve met Jones; he’s a cerebral yet polite and mild-mannered manager from Tennessee who has not lost his Southern accent despite decades in Connecticut and an estate on Maryland’s Eastern Shore.

What gives Jones’ voice added authority is his longevity in the fund investment world. He’s managed through the 1987 stock crash, the 1994 Mexican crisis, the 1998 Long Term Capital meltdown, the 2000 dot-com crash and, of course, the 2008 financial panic. Jones knows that panics happen, but he also knows they don’t happen all the time. Panics take years to build and usually have specific triggers (even though endpoints can spin wildly out of control). Jones does not treat the possibility of a financial crisis lightly, so his warning deserves close consideration. Jones warns that the next crisis is likely to be triggered by excessive debt, specifically corporate debt, which can be more difficult to manage or bail out than sovereign debt.

At the same time, other gurus are warning that the next panic will emerge from the foreign exchange market, overvalued equities or commercial real estate. Perhaps the real message is that all of these areas are vulnerable and the next crisis will seem to come from everywhere at once. That’s the danger. We’re looking at another debt crisis and global financial panic. Only this time it won’t come from mortgages alone but from all directions at once.

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The original headline talked of 24 hours.

May In Brussels Dash As Merkel Threatens To Pull The Plug On Brexit Summit (G.)

Theresa May is to make an emergency dash to Brussels on Saturday to complete the Brexit negotiations after the German chancellor, Angela Merkel, threatened to pull the plug on the Sunday leaders’ summit. As she emerged from talks in Brussels lasting nearly two hours with the European commission president, Jean-Claude Juncker, the British prime minister admitted that there were some major issues to resolve. Merkel had let it be known through her diplomats in Brussels that she was unwilling to negotiate with May on Sunday at the extraordinary Brexit summit. She had demanded a finalised agreement to emerge in good time before the leaders’ meeting.

The development threatened to disrupt Downing Street’s plans for agreement among leaders this month in time for a meaningful vote in parliament in early December. After meeting the European commission president on Wednesday, May said: “We have had a very good meeting this evening. We have made further progress and as a result, we have given sufficient direction to our negotiators. “I hope for them to be able to resolve the remaining issues and that work will start immediately. I now plan to return for further meetings, including with President Junker, on Saturday to discuss how we can bring to a conclusion this process and bring it to a conclusion in the interests of all our people.”

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Salvini and Di Maio said again this morning that they won’t change a letter in their budget.

Salvini Ready To ‘Confront EU’ After Italy’s Budget Rejected Again (G.)

Italy’s deputy prime minister Matteo Salvini has said he is prepared to confront EU leaders after the European commission rejected his country’s draft 2019 budget for a second time, while calling on them to “respect the Italian people”. Italy is facing sanctions after the commission said in a report that the government of the far-right League and anti-establishment Five Star Movement had seriously violated fiscal rules. Both parties’ leaders have refused to succumb to pressure to change their deficit target of 2.4% of GDP as they endeavour to push through campaign promises, such as introducing a universal basic income, cutting taxes and lowering the retirement age.

Italy has about €2.3tn (£2tn) of public debt and the Bank of Italy warned this month that the cost of servicing the debt could rise to €5bn in 2019 and €9bn in 2020. The government is convinced that the budget would help the Italian economy grow by 1.5% over the next year. However, the economy stagnated in the third quarter. On Wednesday Italy’s national statistics agency, Istat, revised down its growth forecast for the year to 1.1%; in May it predicted 1.4% for 2018. Salvini, who leads the League, responded sarcastically to news of the commission’s report. “A letter from the EU? I’m also waiting for one from Father Christmas,” he told reporters.

Referring to the commission president and economics commissioner, Salvini said he was ready to “confront [Jean-Claude] Juncker, [Pierre] Moscovici or whoever” over a budget he said responded to the needs of Italians.

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But Zuckerberg and Sandberg plead innocent.

Facebook Admits Targeting George Soros After He Criticized Company (MW)

Facebook Inc. admitted Wednesday that it asked an opposition-research company to investigate billionaire George Soros over his criticism of the social network. In an internal memo released publicly late Wednesday, Elliot Schrage, Facebook’s outgoing head of communications and policy, said he was responsible for hiring the company, Definers Public Affairs, to investigate who was behind the “Freedom From Facebook” campaign. “In January 2018, investor and philanthropist George Soros attacked Facebook in a speech at Davos, calling us a ‘menace to society,’” Schrage wrote in the memo. “We had not heard such criticism from him before and wanted to determine if he had any financial motivation. Definers researched this using public information.

“Later, when the ‘Freedom from Facebook’ campaign emerged as a so-called grassroots coalition, the team asked Definers to help understand the groups behind them. They learned that George Soros was funding several of the coalition members. They prepared documents and distributed these to the press to show that this was not simply a spontaneous grassroots movement.” Definers later distributed a document suggesting Soros, a major donor to liberal causes, bankrolled the anti-Facebook campaign, playing into anti-Semitic conspiracy theories about Soros. Facebook Chief Executive Mark Zuckerberg and Chief Operating Officer Sheryl Sandberg have denied knowledge of the Definers efforts until after it was revealed by a New York Times report last week. Facebook has since cut ties with Definers.

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A long running but secretive investigation, running concurrently with Mueller’s.

House GOP To Hold Hearing Into DOJ Probe Of Clinton Foundation (Hill)

Rep. Mark Meadows (R-N.C.) said Tuesday that House Republicans plan to hear testimony on Dec. 5 from the prosecutor appointed by former Attorney General Jeff Sessions to probe alleged wrongdoing by the Clinton Foundation. [..] Meadows, who is also the chairman of the conservative House Freedom Caucus, said the committee plans to delve into a number of Republicans concerns surrounding the foundation, including whether any tax-exempt proceeds were used for personal gain and whether the foundation complied with IRS laws. Sessions appointed Huber last year to work in tandem with the Justice Department to look into conservative claims of misconduct at the FBI and review several issues surrounding the Clintons.

This includes former Secretary of State Hillary Clinton’s ties to a Russian nuclear agency and concerns about the Clinton Foundation. Huber’s work has remained shrouded in mystery. The White House has released little information about Huber’s assignment other than Sessions’s address to Congress saying his appointed successor should address concerns raised by Republicans. But Meadows said the committee thinks it’s time Huber gives an update to Congress about his findings and expects him to be one of the witnesses at the hearing. Meadows also added that his committee is also trying to secure testimonies from whistleblowers who could have more information about potential improprieties surrounding the Clinton Foundation. “We’re just now starting to work with a couple of whistleblowers that would indicate that there is a great probability of significant improper activity that’s happening in and around the Clinton Foundation,” he said.

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They must have thought for quite a while that there would never be any scrutiny.

Clinton Foundation Donations Plummet 90% (ZH)

The Clinton Foundation saw contributions dry up approximately 90% over a three-year period between 2014 and 2017, according to financial statements. The global charity is currently under investigation by the DOJ, FBI and IRS for a variety of allegations – including whether favors were handed out while Hillary Clinton was Secretary of State, also known as “pay for play.” The Clinton-led State Department authorized $151 billion in Pentagon-brokered deals to 16 countries that donated to the Clinton Foundation – a 145% increase in completed sales to those nations over the same time frame during the Bush administration, according to IBTimes.

2014

2017

“American defense contractors also donated to the Clinton Foundation while Hillary Clinton was secretary of state and in some cases made personal payments to Bill Clinton for speaking engagements. Such firms and their subsidiaries were listed as contractors in $163 billion worth of Pentagon-negotiated deals that were authorized by the Clinton State Department between 2009 and 2012.” -IBTimes. Then there was that $1 million check Qatar reportedly gave Bill Clinton for his birthday in 2012, which the charity confirmed it accepted. Coincidentally, we’re sure, Qatar was one of the countries which gained State Department clearance to buy US weapons while Clinton was Secretary of State, “even as the department signaled them out ofr a range of alleged ills,” according to IBTimes.

Then there was the surely unrelated $145 million donated to the Foundation from parties linked to the Uranium One deal prior to its approval through a rubber-stamp committee. “The committee almost never met, and when it deliberated it was usually at a fairly low bureaucratic level,” Richard Perle said. Perle, who has worked for the Reagan, Clinton and both Bush administrations added, “I think it’s a bit of a joke.” –CBS. Meanwhile, according to a November 2016 report by the Dallas Observer, the Clinton Foundation has been under investigation by the IRS since July, 2016, while the Arkansas FBI field office has been investigating allegations of pay-for-play and tax code violations, according to The Hill.

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Like that fleece sweater?

Tyres And Synthetic Clothes ‘Biggest Causes Of Microplastic Pollution’ (G.)

Vehicle tyres and synthetic clothing are the two leading contributors to microplastic pollution from UK households, according to a new report from Friends of the Earth. The report estimates that between 9,000 and 32,000 tonnes of microplastic pollution enter British waterways each year from just four sources. The two leading sources are tyre abrasion, with between 7,000 and 19,000 tonnes entering surface waters each year, and clothing. In the UK an estimated two-thirds of clothing is made from synthetic plastic material, according to analysts from Eunomia, who wrote the report for FoE.

Up to 2,900 tonnes of microplastics from the washing of synthetic clothing such as fleeces could be passing through wastewater treatment into our rivers and estuaries. The scale of plastic pollution from household plastics is of the same magnitude as that from large plastic waste such as bottles and takeaway containers – about 26,000 tonnes of which enters UK waterways each year. The environmental campaign group is calling on the government’s resources and waste strategy – expected next month – to include measures for tackling microplastics as part of a comprehensive action plan. The four key contributors to microplastic pollution in the oceans from UK sources, according to the report, are:

• Vehicle tyres: 68,000 tonnes of microplastics from tyre tread abrasion are generated in the UK every year, with between 7,000 and 19,000 tonnes entering surface waters;

• Clothing: the washing of synthetic clothing could result in the generation of 2,300-5,900 tonnes of fibres annually in the UK – up to 2,900 tonnes of this could be passing through wastewater treatment into our rivers and estuaries;

• Plastic pellets used to manufacture plastic items. Up to 5,900 tonnes are lost to surface waters in the UK every year;

• Paints on buildings and road markings – weather and flake-off results in between 1,400 and 3,700 tonnes ending up in surface water every year.

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There’s a disturbing trend emerging that people are fully blind to. In this piece, and I’ve seen it a lot more recently, the topic is the 1st amendment. To make their well-meaning arguments, writers then pose questions like “What if Assange DID get his info from Russia?” or “What if Assange really DOES hate America?” The response of course is that this would make no difference as far as the 1st amendment is concerned.

But in the meantime the possibility that Assange is indeed a Russian agent who hates all Americans has been introduced into the narrative. That makes these articles effectively part of the smear campaign. There is no indication that either allegation is true, but they are posited by those ostensibly defending him. They don’t help. Or rather, they help smear.

Former New York Times Chief Lawyer: Rally to Support Julian Assange (Timm)

I recently spoke to James Goodale, the famed First Amendment lawyer and former general counsel the New York Times, who led the paper’s legal team in the famed Pentagon Papers case about the dire impact the Justice Department’s move may have on press freedom, regardless of whether people consider Assange himself a “journalist”.

There’s speculation on what Assange could be charged with. There’s a possibility that he could be outright charged under the Espionage Act for the act of publishing classified information. Then there’s the “conspiracy theory” that Assange was engaged in a conspiracy with his sources by asking them or soliciting more information from them that the sources may have gathered illegally. Do you find that type of charge would be just as dangerous as a charge for publishing information?

I do find that that charge would be just as dangerous. As a matter of fact, a charge against Assange for “conspiring” with a source is the most dangerous charge that I can think of with respect to the First Amendment in almost all my years representing media organizations. The reason is that one who is gathering/writing/distributing the news, as the law stands now, is free and clear under the First Amendment. If the government is able to say a person who is exempt under the First Amendment then loses that exemption because that person has “conspired” with a source who is subject to the Espionage Act or other law, then the government has succeeded in applying the standard to all news-gathering.

That will mean that the press ability to get newsworthy classified information from government sources will be severely curtailed, because every story that is based on leaked info will theoretically be subject to legal action by the government. It will be up to the person with the information to prove that they got it without violating the Espionage Act. This would be, in my view, the worst thing to happen to the First Amendment-almost ever.

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May 302018
 
 May 30, 2018  Posted by at 9:07 am Finance Tagged with: , , , , , , , , , , , ,  3 Responses »


Wassily Kandinsky Moscow II 1916

 

Italy: No Easy Fixes For The European Central Bank (G.)
Investors Ask If ECB Has Will And Means To Save Euro From Italian Turmoil (R.)
Blanchard: Europe Should Be OK – But ‘I’m Very Worried About Italy’ (CNBC)
NIRP’s Revenge: Italian Bonds Plunge, Worst Day in Decades (WS)
Italy Could Be The Next Greece – Only Much Worse (CNBC)
“Everything Has Gone Wrong”: Soros Warns “Major” Financial Crisis Is Coming (ZH)
Soros-Backed Campaign To Push For New Brexit Vote Within A Year (G.)
Pace Of Greek Credit Contraction Increases In April (K.)
EU Plans To Boost Spending In South, Cut Funds For Eastern Europe (RT)
It’s Hard To Be An Empire (Jim Kunstler)
China Slams Surprise US Trade Announcement, Says Ready To Fight (R.)
High Number Of Workers With No Pay Raise Says Inflation Worries Overblown (MW)
industrial-Scale Beef Farming Comes To The UK (G.)
Meat And Fish Multinationals ‘Jeopardising Paris Climate Goals’ (G.)

 

 

“Under the Target2 system, which is the way eurozone central banks keep account of liabilities to each other, Italy already owes £442bn.”

Italy: No Easy Fixes For The European Central Bank (G.)

The last eurozone crisis was solved – or deferred – when the president of the European Central Bank, Mario Draghi, declared in July 2012 that the institution was ready to do “whatever it takes” to save the euro. Bond markets calmed down, weak banks got access to funding again and an economic recovery of sorts materialised. In terms of central bank rescue acts, it was a textbook operation. Unfortunately, there are no easy ECB fixes for the new Italian crisis. The ECB’s first problem is its own powers. Even if it were minded to try to reverse the dramatic sell-off in Italian bonds, the rules say it is only supposed to respond to emergency calls from countries that have agreed to budget conditions.

With new elections now likely in Italy in the autumn, it’s hard to see how a deal could be done. Even if a technical fudge could be found, the second problem is that the eurozone’s big powers might prefer the ECB to do nothing. Günther Oettinger, the EU’s budget commissioner, seems to believe a bout of market turmoil “might become a signal to [Italian] voters after all to not vote for populists on the right and left”. In practice, the experience might provoke a bigger vote for anti-euro parties, but the strategy seems set.

The third problem for the ECB will come if capital drains from Italian banks. In that case the ECB could in theory claim a clear need to intervene to prevent damage to eurozone banks outside Italy. But, again, there could be pressure to stay on the sidelines. Under the Target2 system, which is the way eurozone central banks keep account of liabilities to each other, Italy already owes £442bn. Any ECB-backed support for its banks would see that figure rise further, provoking fears over repayment. Note that Target2 imbalances are already a hot topic in Germany, where the Bundesbank is the single biggest creditor.

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I’m sure it has the will. Draghi’s Plunge Protection Team is working hard today, euro’s up 0.5%. The problem is that everyone knows whatever the ECB does is only a temp stopgap.

Investors Ask If ECB Has Will And Means To Save Euro From Italian Turmoil (R.)

Investors are again speculating what the ECB could do to solve the problem of a surge in Italy’s debt yields that is causing stress for Italian banks and reviving questions about a euro break up. The stakes will be huge if a repeat election in the euro zone’s third-largest economy become a de facto referendum on Italy’s membership of the euro and its role in the European Union. Italy’s economy is at least 10 times bigger than that of Greece, which needed 250 billion euros ($289 billion) of euro zone and IMF money to bail it out. If Italy needed a similar level of support, the numbers involved would be eyewatering.

Total IMF firepower would only add up to around 500 billion euros and even with the 400 billion euros that the European Stability Mechanism could conceivably get together, it still wouldn’t completely cover Italy. Perhaps it’s no wonder then that Italy’s bond markets saw their worst sell-off in 26 years on Tuesday and investors are starting to look inquisitively at the ECB. “If this continues for another couple of sessions, I think you will have to see some official (European) response,” said Saxo Bank’s head of foreign exchange strategy John Hardy. “It becomes a ‘whatever it takes’ kind of moment,” he added, recalling the promise made in 2012 by ECB President Mario Draghi to keep the euro intact.

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Inflexibility killed the cat.

Blanchard: Europe Should Be OK – But ‘I’m Very Worried About Italy’ (CNBC)

Political chaos in the euro zone’s third-biggest economy won’t be going away anytime soon, according to IMF former chief economist Olivier Blanchard, who on Tuesday issued an ominous assessment of the country. Panic roiled markets Tuesday as a political fight in Italy prompted one of its worst market sell-offs in years. Underlying investor fear was the prospect of Italy leaving the euro and others following suit, which Blanchard, now an economics professor at the Massachusetts Institute of Technology, described as more of a psychological fear than a realistic threat.

The potential concern, rather, involves Italy’s creditors, who would have to “move carefully,” the economist told CNBC’s Joumanna Bercetche in Paris. The rest of Europe may avoid a domino effect, but Italy looks to remain mired in a quagmire. “I suspect in this case the EU will do whatever is needed to prevent contagion, so I’m not terribly worried about contagion,” Blanchard said. “I’m very worried about Italy. Not worried about the rest of Europe. It will be tough, but the rest of Europe, the rest of (the) euro will be OK.” [..] “The writing was on the wall,” Blanchard said. “When you have capital mobility, and you give signals that you might not stay in the euro … then you expect investors to move, and I think that’s what we are seeing.”

Markets were already nervous about M5S and Lega’s economic plans for Italy. Though the parties did not in fact pledge to leave the euro, they signaled a disregard for the EU’s fiscal rules, such as those limiting states’ deficit levels. [..] Asked if there may be positives to the standoff in the form of EU concessions for Italy in order to prevent a pull-out, Blanchard responded, “No. I am not optimistic.” Unsurprisingly, he described himself as very bearish on the country. The best-case scenario, the economist said, would be for the winners of the next elections to provide a program that satisfies the voter base — victory is predicted for the populist parties again — but remains fiscally responsible.

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Wolf Richter is dead on: “..Italian bonds – no matter what maturity – should never ever have traded with a negative yield..”

NIRP’s Revenge: Italian Bonds Plunge, Worst Day in Decades (WS)

On Tuesday, Italian bonds had their worst day in Eurozone existence, even worse than any day during the worst periods of the 2011 debt crisis. And this comes after they’d already gotten crushed on Monday, and after they’d gotten crushed last week. And this happened even as the ECB is carrying on its QE program, including the purchase of Italian government bonds; and even as it pursues its negative-interest-rate policy (NIRP). As bond prices plunge, yields spike by definition, and the spike in the two-year yield was spectacular, going from 0.3% on Monday morning to 2.73% on Tuesday end of day:

But note that until May 26, the two-year yield was still negative as part of the ECB’s interest rate repression. On that fateful day, the two-year yield finally crossed the red line into positive territory. To this day, it remains inexplicable why the ECB decided that Italian yields with maturities of two years or less should be negative – that investors, or rather pension beneficiaries, etc., who own these misbegotten bonds, would need to pay the Italian government, one of the most indebted in the world, for the privilege of lending it money. But that scheme came totally unhinged just now. The 10-year Italian government bond yield preformed a similar if not quite as spectacular a feat. Over Monday and Tuesday, it went from 2.37% to 3.18%:

But here’s the thing: Italian bonds – no matter what maturity – should never ever have traded with a negative yield. Their yields should always have been higher than US yields, given that the Italian government is in even worse financial shape than the US government. Italy’s debt-to-GDP ratio is 131%, and more importantly, it doesn’t even control its own currency and cannot on its own slough off a debt crisis by converting it into a classic currency crisis, which is how Argentina is dealing with its government spending. The central bank of Argentina recently jacked up its 30-day policy rate to 40% to keep the peso from collapsing further. That’s the neighborhood where Italy would be if it had its own currency. But the ECB’s QE shenanigans and NIRP drove even Italian yields below zero, and so now here is NIRP’s revenge.

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Oettinger takes the prize for the biggest fool so far.

Italy Could Be The Next Greece – Only Much Worse (CNBC)

Nearly a decade after a protracted Greek debt crisis spooked global markets, a fresh round of political turmoil in Italy has revived fears about the fate of the European financial system and its common currency. This time, the numbers are a lot bigger. “Italy’s economy is 10 times larger than that of Greece, whose debt crisis shook the euro area’s foundations,” wrote Desmond Lachman, a resident fellow at the American Enterprise Institute, in a recent blog post. “The single currency is unlikely to survive in its present form if Italy were forced to exit that monetary arrangement.”

Italy’s economy has been struggling since the Great Recession years with a debt load that rivals the heavy Greek borrowing that forced massive cuts in public services there and drove Greece into a deep recession. That Italian debt crisis has become central to the ongoing political instability, as multiple governments have failed to resolve it. [..] Even if the populist parties stop short of a clear call for exiting the euro, their strength has widened the political gap with EU officials in Brussels. In an echo of the Greek debt crisis, the latest turmoil has reopened a political rift between Germany and the “peripheral” economies of Greece, Italy and Spain. That political divide will further complicate ongoing efforts to resolve Italy’s crushing debt burden.

On Tuesday, EU officials promised to respect Italian voters’ right to choose their own government, after Germany’s European commissioner said Italians should not vote for the populists. “My worry, my expectation, is that the coming weeks will show that the markets, government bonds, Italy’s economy, could be so badly hit that these could send a signal to voters not to elect populists from the left or right,” Guenther Oettinger, a German commissioner who oversees the EU budget committee, said in a German television interview.

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“..a relationship that was neither voluntary nor equal – the very opposite of the credo on which the EU was based.”

“Everything Has Gone Wrong”: Soros Warns “Major” Financial Crisis Is Coming (ZH)

Until recently, it could have been argued that austerity is working: the European economy is slowly improving, and Europe must simply persevere. But, looking ahead, Europe now faces the collapse of the Iran nuclear deal and the destruction of the transatlantic alliance, which is bound to have a negative effect on its economy and cause other dislocations. The strength of the dollar is already precipitating a flight from emerging-market currencies. We may be heading for another major financial crisis. The economic stimulus of a Marshall Plan for Africa and other parts of the developing world should kick in just at the right time. That is what has led me to put forward an out-of-the-box proposal for financing it.

“The EU is in an existential crisis. Everything that could go wrong has gone wrong,” he said. To escape the crisis, “it needs to reinvent itself.” “The United States, for its part, has exacerbated the EU’s problems. By unilaterally withdrawing from the 2015 Iran nuclear deal, President Donald Trump has effectively destroyed the transatlantic alliance. This has put additional pressure on an already beleaguered Europe. It is no longer a figure of speech to say that Europe is in existential danger; it is the harsh reality.” “We may be heading for another major financial crisis,” Soros said explicitly.

“I personally regarded the EU as the embodiment of the idea of the open society. It was a voluntary association of equal states that banded together and sacrificed part of their sovereignty for the common good. The idea of Europe as an open society continues to inspire me. But since the financial crisis of 2008, the EU seems to have lost its way. It adopted a program of fiscal retrenchment, which led to the euro crisis and transformed the eurozone into a relationship between creditors and debtors. The creditors set the conditions that the debtors had to meet, yet could not meet. This created a relationship that was neither voluntary nor equal – the very opposite of the credo on which the EU was based.”

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Interference in a country’s politics. Hmm.

Soros-Backed Campaign To Push For New Brexit Vote Within A Year (G.)

A campaign to secure a second Brexit referendum within a year and save the UK from “immense damage” is to be launched in days, the philanthropist and financier George Soros has announced. The billionaire founder of the Open Society Foundation said the prospect of the UK’s prolonged divorce from Brussels could help persuade the British public by a “convincing margin” that EU membership was in their interests. In a speech on Tuesday ahead of the launch of the Best for Britain campaign – said to have already attracted millions of pounds in donations – Soros suggested to an audience in Paris that changing the minds of Britons would be in keeping with “revolutionary times”.

Best for Britain had already helped to convince parliamentarians to extract from Theresa May a meaningful vote on the final withdrawal deal, he said, and it was time to engage with voters, and Brussels, to pave the way for the UK to stay in the bloc. It is expected to publish its campaign manifesto on 8 June. Soros, 87, said: “Brexit is an immensely damaging process, harmful to both sides … Divorce will be a long process, probably taking more than five years. Five years is an eternity in politics, especially in revolutionary times like the present. “Ultimately, it’s up to the British people to decide what they want to do. It would be better however if they came to a decision sooner rather than later. That’s the goal of an initiative called the Best for Britain, which I support.

“Best for Britain fought for, and helped to win, a meaningful parliamentary vote which includes the option of not leaving at all. This would be good for Britain but would also render Europe a great service by rescinding Brexit and not creating a hard-to-fill hole in the European budget. “But the British public must express its support by a convincing margin in order to be taken seriously by Europe. That’s what Best for Britain is aiming for by engaging the electorate. It will publish its manifesto in the next few days.”

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Recovery.

Pace Of Greek Credit Contraction Increases In April (K.)

The funding deficit is growing in the Greek economy, as there was a sharper credit contraction in April, data from the Bank of Greece showed on Tuesday. The pace of financing Greek households and enterprises stood at -1.9% last month, from -1% in March and -0.9% in February. The flow of credit turned negative by 1.2 billion euros in April from the positive amount of 217 million euros in March. The negative flow means that loans repaid outweighed those issued, after factoring in loan write-offs and sales of nonperforming loans by banks.

In practice the fresh credit issued is offset by the burden of the increased write-offs and payments mostly by enterprises. Data analysis showed that the funding flow to the economy’s basic domains last month was negative by 2.4% for industry and by 1.7% for construction. At the same time the financing rate for tourism was marginally positive at 1%, while in commerce the rate was zero, against a positive 1% in March. The sector with the lowest funding rate in comparison with last year was electricity and water, which declined 12.6%.

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Who blinked first?

EU Plans To Boost Spending In South, Cut Funds For Eastern Europe (RT)

The European Commission proposed on Tuesday increased spending of EU money on Italy and other southern member states hit by the economic and migrant crises, while reducing funds for regions in the former communist eastern countries, Reuters reports. The proposal on the 2021-2027 budget comes as Italy is facing the prospect of snap elections after the summer. The commission proposed a new methodology to distribute funds that takes into account unemployment levels and the reception of migrants, and not just economic output as previously done. This will result in a reduction of regional funds for eastern countries because they have grown faster in recent years. The budget would increase to €1.1 trillion ($1.2 trillion) from €1 trillion in the current seven-year period. A third of spending would be allocated to help reduce the gap between rich and poor regions of the bloc.

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Jim on Memorial Day.

It’s Hard To Be An Empire (Jim Kunstler)

I suppose that military prowess is all we’ve got left in the national pride bag in these times of foundering empire. Few are fooled these days by the “land of opportunity” trope when so many young people are lucky to get a part-time gig on the WalMart loading dock along with three nights a week of slinging Seaside Shrimp Trios for the local Red Lobster. Of course, there are a few choice perches in venture capital out in Silicon Valley, or concocting collateralized loan obligations in the aeries of Wall Street — but nobody is playing Aaron Copeland’s Fanfare for the Common Man to celebrate these endeavors.

There’s a macabre equivalency between our various overseas war operations and the school shootings that are now a routine feature of American daily life. The purposes are equally obscure and the damage is just as impressive — many lives ruined for no good reason. But consider more lives are lost every year in highway crashes than in the Mexican War of the 1840s and more Americans are dying each year lately of opioid overdoses than the entire death toll of the Vietnam War. America’s soul is at war with its vaunted way-of-life.

It’s hard to be an empire, for sure, but it’s even harder, apparently, to be a truly virtuous society. First, I suppose, you have to be not insane. It’s hard to think of one facet of American life that’s not insane now. Our politics are insane. Our ideologies are insane. The universities are insane. Medicine is insane. Show biz is insane. Sexual relations are insane. The arts are insane. The news media is utterly insane. And what passes for business enterprise in the USA these days is something beyond insane, like unto the swarms of serpents and bats issuing from some mouth of hell in the medieval triptychs. How do you memorialize all that?

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“..the trade renege could leave Washington dancing with itself..”

China Slams Surprise US Trade Announcement, Says Ready To Fight (R.)

China on Wednesday lashed out at Washington’s unexpected statement that it will press ahead with tariffs and restrictions on investments by Chinese companies, saying Beijing was ready to fight back if Washington was looking to ignite a trade war. The United States said on Tuesday that it still held the threat of imposing tariffs on $50 billion of imports from China and would use it unless Beijing addressed the issue of theft of American intellectual property. The declaration came after the two sides had agreed earlier this month to look at steps to narrow China’s $375 billion trade surplus with America, and days ahead of a visit to Beijing by U.S. Commerce Secretary Wilbur Ross for further negotiations.

William Zarit, chairman of the American Chamber of Commerce in China, said Washington’s threat of tariffs appeared to have been “somewhat effective” thus far. “I don’t think it is only a tactic, personally,” he told reporters on Wednesday, adding that the group does not view tariffs as the best way to address the trade frictions. “The thinking became that if the U.S. doesn’t have any leverage and there is no pressure on our Chinese friends, then we will not have serious negotiations.” [..] The Global Times said the United States was suffering from a “delusion” and warned that the “trade renege could leave Washington dancing with itself”.

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What you get with bogus claims of full employment.

High Number Of Workers With No Pay Raise Says Inflation Worries Overblown (MW)

An unusually high percentage of American workers still aren’t getting pay raises nine years after the end of the Great Recession — and that suggests the threat of inflation is still quite low. Some senior Federal Reserve officials, including Kansas City Fed President Esther George, want to raise U.S. interest rates more rapidly to head off the potential for higher wages to stoke inflation. The specter of higher rates has pushed up interest rates and acted as a drag on stocks. Yet a new report by researchers at the regional central bank George leads to suggest there’s little cause for alarm.

The Kansas City Fed researchers found that an abnormally high share of employees still in the same jobs haven’t received a pay raise in the last 12 months despite a 3.9% unemployment rate that is the lowest in almost two decades. Economists refer to the phenomenon as “wage rigidity.” [..] The rate of future wage growth in the U.S. also tends to rise more slowly than usual when a high number of people aren’t getting any raises at all, the research suggests. In the most recent 12-month period ended in April, hourly U.S. wages increased at a 2.6% rate. Normally when the unemployment rate is as low as it is now, wages tend to rise 3.5% to 4.5% year.

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What they claimed would never happen.

industrial-Scale Beef Farming Comes To The UK (G.)

Thousands of British cattle reared for supermarket beef are being fattened in industrial-scale units where livestock have little or no access to pasture. Research by the Guardian and the Bureau of Investigative Journalism has established that the UK is now home to a number of industrial-scale fattening units with herds of up to 3,000 cattle at a time being held in grassless pens for extended periods rather than being grazed or barn-reared. Intensive beef farms, known as Concentrated Animal Feeding Operations (CAFOs) are commonplace in the US. But the practice of intensive beef farming in the UK has not previously been widely acknowledged – and the findings have sparked the latest clash over the future of British farming.

The beef industry says that the scale of operations involved enables farmers to rear cattle efficiently and profitably, and ensure high welfare standards. But critics say there are welfare and environmental concerns around this style of farming, and believe that the farms are evidence of a wider intensification of the UK’s livestock sector which is not being sufficiently debated, and which may have an impact on small farmers. In contrast to large intensive pig and poultry farms, industrial beef units do not require a government permit, and there are no official records held by DEFRA on how many intensive beef units are in operation. But the Guardian and the Bureau has identified nearly a dozen operating across England. [..] The largest farms fatten up to 6,000 cattle a year.

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Stop the madness!

Meat And Fish Multinationals ‘Jeopardising Paris Climate Goals’ (G.)

Meat and fish companies may be “putting the implementation of the Paris agreement in jeopardy” by failing to properly report their climate emissions, according to a groundbreaking index launched today. Three out of four (72%) of the world’s biggest meat and fish companies provided little or no evidence to show that they were measuring or reporting their emissions, despite the fact that, as the report points out, livestock production represents 14.5% of all greenhouse gas emissions. “It is clear that the meat and dairy industries have remained out of public scrutiny in terms of their significant climate impact.

For this to change, these companies must be held accountable for the emissions and they must have credible, independently verifiable emissions reductions strategy,” said Shefali Sharma, director of the Institute for Agriculture and Trade Policy European office. The new Coller FAIRR Protein Producers Index has examined the environmental and social commitments of 60 of the world’s largest meat and fish producers and found that more than half are failing to properly document their impact, despite their central role in our lives and societies.

Many of the names in the index will be unfamiliar, but their consolidated revenues of $300bn cover around one-fifth of the global livestock and aquaculture market – roughly one in every five burgers, steaks or fish. The companies looked at by the index include giants like the Australian Agricultural Company, which has the biggest cattle herd in the world; the Chinese WH Group, the largest global pork company; or the US’s Sandersons, which processes more than 10 million chickens a week.

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Oct 182017
 
 October 18, 2017  Posted by at 2:26 pm Finance Tagged with: , , , , , , , , ,  4 Responses »


Salvator Rosa Heroic battle 1652

 

A point BOE Governor Mark Carney made recently may be the biggest cog in the European Union’s wheel (or is it second biggest? Read on). That is, derivatives clearing. It’s one of the few areas where Brussels stands to lose much more than London, but it’s a big one. And Carney puts a giant question mark behind the EU’s preparedness.

Carney Reveals Europe’s Potential Achilles Heel in Brexit Talks

Carney explained why Europe’s financial sector is more at risk than the UK from a “hard” or “no-deal” Brexit. [..] When asked does the European Council “get it” in terms of potential shocks to financial stability, Carney diplomatically commented that “a learning process is underway.” Having sounded alarm bells about clearing in his last Mansion House speech, he noted “These costs of fragmenting clearing, particularly clearing of interest rate swaps, would be born principally by the European real economy and they are considerable.”

Calling into question the continuity of tens of thousands of derivative contracts , he stated that it was “pretty clear they will no longer be valid”, that this “could only be solved by both sides” and has been “underappreciated” by Europe . Carney had a snipe at Europe for its lack of preparation “We are prepared as we should be for the possibility of a hard exit without any transition…there has been much less of that done in the European Union.”

In Carneys view “It’s in the interest of the EU 27 to have a transition agreement. Also, in my judgement given the scale of the issues as they affect the EU 27, that there will ultimately be a transition agreement. There is a very limited amount of time between now and the end of March 2019 to transition large, complex institutions and activities…

If one thinks about the implementation of Basel III, we are alone in the current members of the EU in having extensive experience of managing the transition for individual firms of various derivative and risk activities from one jurisdiction back into the UK. That tends to take 2-4 years. Depending on the agreement, we are talking about a substantial amount of activity.” [..] “I wouldn’t want to use financial stability issues as leverage. I wouldn’t want them to be addressed in a bloodless technocratic way in the interests of all the citizens.”

Sounds like Carney knows a thing or two that Juncker et al haven’t sufficiently thought through. The EU plans to move all – or most- derivatives clearing to the continent, but such a thing is anything but easy. That’s another very tangled web, and an expensive one to boot. Brussels probably wants to use the issue to put pressure on London in some way, but a hard Brexit might make that unlikely if not worse. Bloomberg from June this year:

EU Targets Derivative-Clearing Giants With Relocation Threat

“Today, a significant amount of financial instruments denominated in the currencies of the member states are cleared by recognized third-country CCPs,” according to the proposal. “For example, the notional amount outstanding at Chicago Mercantile Exchange in the U.S. is €1.8 trillion for euro-denominated interest-rate derivatives,” the commission said. “This also raises a series of concerns.”

The financial industry has lobbied hard against a location policy. The International Swaps and Derivatives Association said requiring euro-denominated interest-rate derivatives to be cleared by an EU-based clearinghouse would boost initial margin requirements by as much as 20% . The FIA, a trade organization for the futures, options and centrally cleared derivatives markets, has said forced relocation “could nearly double margin requirements from $83 billion to $160 billion.”

According to that Bloomberg piece, the notional amount outstanding of euro-denominated OTC interest-rate derivatives is some $90 trillion, 97% of which goes through the London Clearing House (LCH) based in .. well, you guessed it. Wikipedia:

LCH is a European-based independent clearing house that serves major international exchanges, as well as a range of OTC markets. Based on 2012 figures LCH cleared approximately 50% of the global interest rate swap market, and is the second largest clearer of bonds and repos in the world , providing services across 13 government debt markets.

In addition, LCH clears a broad range of asset classes including: commodities, securities, exchange traded derivatives, credit default swaps, energy contracts, freight derivatives, interest rate swaps, foreign exchange and Euro and Sterling denominated bonds and repos. LCH’s members comprise a large number of the major financial groups including almost all of the major investment banks, broker dealers and international commodity houses.

More details from Reuters, also in June:

Derivatives Body Warns EU Against Moving Euro Clearing From London

Shifting clearing of euro-denominated derivatives from London to the European continent would require banks to set aside far more cash to insure trades against defaults, a cost that would be passed on to companies, a global derivatives industry body says. [..]The London Stock Exchange’s subsidiary LCH currently clears the bulk of euro-denominated swaps, a derivative contract that helps companies guard against unexpected moves in interest rates or currencies.

Britain, however, is due to leave the bloc in 2019, putting it out of the EU’s regulatory reach. The International Swaps and Derivatives Association (ISDA), one of the world’s top derivatives industry bodies, said on Monday that a “relocation” in euro clearing to continental Europe would split liquidity in markets and reduce the ability of banks to save on margin by offsetting positions in the same liquidity pool.

Deutsche Bank has the world’s largest derivatives portfolio. Not all of it will be euro-denominated, but still. And I know it’s just notional amounts, but derivatives are not things one plays fast and loose with, lest the clearing becomes opaque and trouble starts.

Juncker better solve this thing. Oh, and this one too (yes, it’s quite fun to report on this):

Money Will Divide Europe After Brexit

As part of the transition period of around two years that she called for in her emollient Florence speech last month, Britain would continue to pay in to the EU budget to ensure that none of the member states was out of pocket owing to the decision to leave. These net payments of around €10 billion a year would fix the immediate problem facing the EU, the hole that would otherwise open up in its finances during the final two years of its current budgetary framework, which runs from 2014 to 2020.

[..] through its accounting procedures, the EU can and does commit it to spending that will be paid for by future receipts from the member states. What this means is that even after 2020 there will still be payments due on commitments made under the current seven-year spending plan. That pile of unpaid bills, eloquently called the “reste à liquider” (the amount yet to be settled), is forecast to be €254 billion at the end of 2020.

Estimates of what Britain might owe towards this vary, but taking into account what might have been spent on British projects it could be around €20 billion. On top of that – and the second main reason why the EU is holding out for more – the EU has liabilities, notably arising from the unfunded retirement benefits of European staff estimated at €67 billion at the end of 2016, which it is expecting Britain to share. Even taking into account some potential offsets from its share of assets, Britain may face a bill of between €30 billion and €40 billion on top of the €20 billion paid during the transition period.

The EU finances itself on the fly. It’ll have a €254 pile of unpaid bills in 3 years time. That is scary. Not for Brussels, but for its member countries. A hard Brexit, in which Britain may refuse to pay, is perhaps even scarier.

Anyway, once Juncker’s done with all that, he’ll have to move on to the next problem. Derivatives is a big cloud hanging over Europe, but this one is potentially shattering.

Ray Dalio, manager of the world’s biggest hedge fund, is shorting, placing large bets against, anything Italian, and given Italy’s size and hence importance to the EU, his bets are effectively bets against Brussels.

Dalio’s Fund Opens $300 Million Bet Against Italian Energy Firm

Bridgewater Associates is adding to its billion-dollar short against the Italian economy. The world’s largest hedge fund disclosed a $300 million bet against Eni SpA, Italy’s oil and gas giant, data compiled by Bloomberg show. Bloomberg previously reported that Ray Dalio’s firm had wagered more than $1.1 billion against shares of six Italian financial institutions and two other companies.

This latest bet is the hedge fund’s second-largest against an Italian company, trailing only the $310 million against Enel SpA, the country’s largest utility. Eni’s majority holder is the Italian government via state lender Cassa Depositi e Prestiti SpA and the Ministry of Economy. The public involvement also is reflected in the government’s role in appointing the chief executive officer. Current CEO Claudio Descalzi has been at the helm since 2014 and was reconfirmed this year.

$1.1 billion against the banking system, $310 million against the main utility, $140 million vs pan-European insurer Generali and now $300 million vs the national oil and gas company, That adds up to quite a bit more than the Bloomberg graph says, but I’ll include it anyway.

 

 

Dalio doesn’t call the bluff of Italy, and this is not just like George Soros’ shorting the British pound in 1992, he’s calling out the entire EU and its financial system. He’s saying I don’t believe you can keep up the charade. He’s making a mockery of Mario Draghi’s “whatever it takes”.

So what are Rome, Brussels and Frankfurt going to do? They can’t ignore the no. 1 hedge fund forever. They will have to pump money into Italy, in large amounts. Merkel won’t like that, neither will her new coalition partner FDP, and the Bundesbank may start legal action.

Dalio’s located the Union’s achilles heel, which is not just that Italy’s insolvent (it’s not alone in that), but that there’s a gigantic theater production being performed to give everyone the impression that things are going just swimmingly, thank you. So Dalio’s said: how much for a ticket to the show?, and paid it. And now he’s inside.

Bridgewater didn’t enter that theater for nothing. $1.85 billion is not chump change for them. Intesa Sanpaolo CEO Carlo Messina may have said that Dalio will lose his bets, but according to the IMF Italy’s non-performing loans levels were €356 billion at the end of June 2016, which is 18% of total loans for Italian banks, 20% of Italy’s GDP and one-third of total Eurozone NPLs. Intesa Sanpaolo holds a nice chunk of that.

‘Whatever it takes’ may well be too much to take for the EU, and Draghi looks outsmarted, as do Juncker and Merkel. How many billions will it take for Dalio to go away? And then, who’s next, which hedge fund, which politician, which ECB chief? Coming soon to a theater near you.

 

 

May 032017
 


Leonardo da Vinci A Copse of Trees 1508

 

Trump: US “Needs A Good Shutdown In September To Fix This Mess” (ZH)
Home Capital Fails to Draw Buyout Interest From Canada Banks (BBG)
Hot Air Hisses Out of US Auto Bubble (WS)
May’s Election Fighting Talk Fuels Brexit War of Words With EU (BBG)
Le Pen Wants A French National Currency Within Two Years After Election (R.)
Macron Victory Could Mark The Start Of Political Upheaval For France (CNBC)
Italy Is Europe’s Next Big Problem (BBG)
Soros At it Again – Trying to Overthrow Polish Government? (Martin Armstrong)
In Tense Encounter, Merkel Tells Putin Sanctions Must Remain (BBG)
‘It’s Very Important We Hear What Putin Has To Say’ – Oliver Stone (RT)
Adults in the Room – One Of The Greatest Political Memoirs Ever (Mason)
Greece, Creditors To Discuss Options For Debt Restructuring (CNBC)
Greece Will Avoid Default After Bailout Deal – But Faces More Austerity (G.)
Greek Poverty Deepens During Seven Years Of Austerity (AP)

 

 

September’s a long way away.

Trump: US “Needs A Good Shutdown In September To Fix This Mess” (ZH)

With Congress poised this week to approve a deal to fund the government through September, the first major bipartisan legislation of Trump’s presidency, after lengthy negotiations (which have appeared to signal numerous ‘folds’ by President Trump), apparently frustrated by the lack of tryannical powers that a simple majority grants him, President Trump has lashed out this morning at disagreeable Democrats, and in particular Senate Democrats. As a reminder, the proposed government funding deal does not include funding for Trump’s proposed wall along the U.S.-Mexico border or include language stripping federal money from so-called sanctuary cities, both of which the White House demanded at the outset of negotiations. In fact, as we reported yesterday, the bill has been seen widely as a victory for Democrats, something which has been panned by the conservative press.

While the White House also backed off a threat to withhold ObamaCare subsidy payments to insurance companies, Trump did secure increased military spending in the 2017 budget deal. According to the Hill, the comments are likely irk top Republican lawmakers, who have been frustrated by Trump’s repeated attempts to intervene in the legislative process. The businessman-turned-president, in turn, has vented frustration with the slow pace of work on Capitol Hill. “I’m disappointed that it doesn’t go quicker,” Trump told Fox News last week when asked about the Republican effort to repeal and replace ObamaCare. Commenting on Trump’s tweets, Citi asks rhetorically whether “this could be a case of cutting one’s nose to spit one’s face? – Potentially problematic when the nose in question is attached to the current administration… It seems counterintuitive that a sitting president would want a shutdown, unless he was to blame it on the opposition in order to force through reform/encourage a voter backlash.”

Bloomberg reports that “The message appeared to encourage the Republican-controlled Senate to change rules that now require 60 votes to end a filibuster of legislation. Republicans reduced the threshold to 51 votes for Supreme Court nominees this year and could do the same for legislation with a simple majority vote.” USD does not seem to have reacted to the President’s tweet (it can’t every time, after all), which may just be more political manoeuvring rather than a signal of intent. In any case, we’re not so sure there is such a thing as a “good” shutdown of the US government – and with what will be over $20 trillion in debt and a declining GDP by that time, one wonders which ratings agency will have the balls to downgrade the world’s reserve currency this time?

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“Someone will buy it for a dollar because they want to get the loan book [..] it goes for a lot less than it’s trading at today.”

Home Capital Fails to Draw Buyout Interest From Canada Banks (BBG)

Canadian banks and financial firms are so far showing little interest in buying Home Capital, vindicating short-sellers who say the embattled mortgage lender could be sold off piecemeal, driving the stock down further. “People in the industry would rather see these guys go out of business because the loans aren’t worth the risk, and they’re so leveraged,” said Marc Cohodes, a private investor and part-time chicken farmer in California who has been shorting the stock, or betting on declines, for more than two years. Home Capital’s rival Equitable joined a list of companies that have said they aren’t interested in taking over the struggling mortgage lender, which hired investment banks last week for a possible sale after the stock plunged by two-thirds amid a regulatory probe.

“The bottom line is no,” Equitable Chief Executive Officer Andrew Moor said on Monday. “We have some concerns based on what we’ve read about how they underwrote their loans and their internal controls.” Other banks have indicated that they aren’t interested. Canadian Western Bank CEO Chris Fowler said his Edmonton, Alberta-based lender, which has an alternative mortgage business, would not be a buyer for all of Home Capital. He added the bank will consider “selectively” acquiring loan portfolios. A Laurentian Bank of Canada spokeswoman said that for the lender to be interested in an acquisition it needs to be financially sound and a good strategic fit. Laurentian is active in the alternative lending space.

Canada’s biggest commercial banks, meanwhile, are unlikely to be interested because Home Capital’s mortgages are with customers who wouldn’t qualify for a loan with them, said Sumit Malhotra, an analyst at Bank of Nova Scotia, in a research note. They might be interested in the loan book, he added. [,,] Other short sellers agree with Cohodes. Jerome Hass at Lightwater in Toronto, said he wonders why anybody would buy Home Capital when they could just pick up the mortgages. “It’s got all this litigation against it, it’s going to have all these liabilities against it, so why not just take their loan book off their hands?” Hass said in an interview. “Someone will buy it for a dollar because they want to get the loan book, but I don’t see it going for much, and it goes for a lot less than it’s trading at today.”

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No purchasing power.

Hot Air Hisses out of US Auto Bubble (WS)

A 4.7% drop in sales, bad as it is, wouldn’t qualify for #carmageddon. These things happen. But here’s the thing: Automakers had shelled out $3,465 in incentives per new vehicle sold, on average, according to TrueCar estimates. A record for the month of April. It beat the prior record of $3,393, set in April 2009. It amounts to about 10% of suggested retail price, similar to March. The last period when incentive spending was at this level of MSRP was in 2009 as the industry and sales were collapsing. The #carmageddon point to watch: despite the 13.4% year-over-year surge in incentive spending to nearly $5 billion, total vehicle sales fell 4.7%! When these massive incentives fail to even slow the sales decline, serious problems lurk beneath the surface. This table shows the largest automakers, their year-over-year sales performance – the sea of red ink – along with average per-unit incentive spending and total incentive spending:

GM shelled out the most incentives on average per vehicle, in total $1.23 billion. In March, it had spent about $1.3 billion. At this rate, GM is spending just under $4 billion per quarter in incentives. By comparison, in its Q1 earnings, GM reported “North America” revenue of $29.3 billion. At this rate, it is spending about 13% of its North American revenues on US incentives. But it’s just not working out. Total sales dropped nearly 5.9%, to 244,200 units, with car sales plunging 12.5% and even truck sales falling 3.2%. A gruesome detail: Silverado-C/K pickup sales plunged 20% to 40,154 units. Total retail sales (not including fleet sales) fell 4% to 191,911 vehicles. GM ended the month with 100 days’ supply, up from the nail-biter level of 98 days at the end of March.

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The UK is so divided along multiple fault lines that May has nothing, unless she’s prepared to walk away.

May’s Election Fighting Talk Fuels Brexit War of Words With EU (BBG)

U.K. Prime Minister Theresa May vowed she won’t be pushed around in Brexit talks with the European Union as her war of words with Brussels escalates before negotiations even begin. The premier said European Commission President Jean-Claude Juncker is learning she can be “bloody difficult” after leaked details of a dinner meeting between the leaders alleged he was shocked by her approach to negotiating Brexit. May won a measure of support from several European government officials, who distanced themselves from Juncker’s apparent skepticism about the chances of a Brexit deal. The row blew up after details of the allegedly disastrous meal Juncker attended at May’s London residence last week were reported by a German newspaper.

“What we’ve seen recently is that at times these negotiations are going to be tough,” May told BBC television in an interview Tuesday. “During the Conservative Party leadership campaign, I was described by one of my colleagues as a bloody difficult woman. And I said at the time the next person to find that out will be Jean-Claude Juncker.” The clash between London and the European Commission comes as May seeks re-election on June 8 in a campaign defined by Brexit, and the argument won’t necessarily hurt her chances. While EU officials are concerned about such a public dispute ahead of negotiations, it could help May’s Tories convince voters the U.K. needs what she calls her “strong and stable leadership” for the Brexit talks.

May claims her main rival for power, opposition Labour party leader Jeremy Corbyn, would be too “weak” to succeed at the negotiating table. Germany’s Frankfurter Allgemeine Sonntagszeitung newspaper said on Sunday that Juncker left a dinner on April 26 “10 times more skeptical” of reaching a Brexit deal. In her interview on the campaign trail, May told the BBC she hopes to agree an accord that works for the U.K. and the EU, saying there’s “a lot of similarity” between her proposals and the bloc’s negotiating guidelines.

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Can a national currency exist alongside a European one?

Le Pen Wants A French National Currency Within Two Years After Election (R.)

Far-right presidential challenger Marine Le Pen said capital controls could be used if she won the election and there was a run on banks as she negotiated France’s exit from the European Union, but stressed they were unlikely to be needed. In an interview with Reuters ahead of Sunday’s decisive second round, Le Pen reaffirmed she wanted to take France out of the euro and said she hoped the French people would have a national currency in their pockets within two years. Le Pen said she wanted to replace the EU single currency with another, looser type of cooperation in the form of the ECU basket of currencies that preceded the euro. That would exist alongside a national currency.

“The objective is to transform the euro ‘single currency’ into a euro ‘common currency’, going back to the ancestor of the euro, the ECU, which was an accounting unit that did not stop each country from having each its own currency,” Le Pen said. Calling the euro a deadweight on the French economy, the National Front candidate said a new national currency would better protect French people’s savings. She accused the “establishment” of wanting to “frighten” voters into thinking otherwise. “I am convinced there won’t be any banking crisis,” Le Pen said when asked if French negotiations to quit the EU could trigger a run on French banks.

Asked if she would impose capital controls if savers nevertheless did rush to take their money out of banks, she said: “If there’s a run on banks, we could very well imagine such a solution for a few days, but I’m telling you it won’t happen.” Le Pen said she would launch negotiations over reforms of the EU immediately after winning, saying this would allow France to regain national sovereignty. The talks would include ditching the euro as well as regaining control of France’s borders and being able to decide French legislation alone, she said. Those negotiations could last six to eight months, she said, after which France would hold a referendum on its EU membership.

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Whatever happens in Sunday’s 2nd round, a mess is certain.

Macron Victory Could Mark The Start Of Political Upheaval For France (CNBC)

France’s political course is likely to remain far from certain even with a win for presumed victor Emmanuel Macron, as his inability to form a parliamentary majority threatens to undermine his authority both domestically and across Europe, political analysts have suggested. Sunday’s second round runoff will mark the start of a period of tension for the country as the successful candidate waits to see if they can garner a large enough parliamentary majority in June’s legislative election to enact change, Dominique Reynié, professor of political science at the Sciences Po institute in Paris, told CNBC Tuesday. “I’m not worried about Macron’s ability to win, but the question surrounds what kind of turnout he will achieve and what his ability to gain a majority in the June election will be,” explained Reynié.

Polls are currently pitching centrist Macron to gain anywhere from a 59% to a 64% lead on his far-right opponent Marine Le Pen. However, this lead will do little to boost Macron’s authority in government, Reynié suggests. The independent will have to gain significant support from other parties if he is to form a majority when France once again heads to the polls on June 11 and June 18 to elect the 577 members of its National Assembly. “It will all depend on his margin of victory. A 55 to 45% win for Macron would be a disaster. Even 60 to 40 is not at all a triumph; a 20% margin would be very difficult. “It would be a crisis. It is not normal and would be a problem both on the streets of France and for Europe,” said Reynié.

In the first round of voting, Macron’s En Marche!, or Onwards! party, achieved a majority in 240 constituencies versus Le Pen’s 216. However, Reynié says this is simply not enough. “The smaller Macron’s majority the harder it will be for him to win the general election in June. He needs support; it is not possible to have power as President without support. “This could cause parliament to be largely fragmented like in the first round, with discussions taking place in fractured groups. Macron will have to negotiate with MPs and will be fragile and unpopular.”

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Has been for years.

Italy Is Europe’s Next Big Problem (BBG)

Emmanuel Macron looks on course to become France’s new president, ending the threat of a euroskeptic at the Elysee. Even if Macron wins, though, it’ll be too soon to celebrate a new phase of stability in the euro zone. Across the Alps, an economic and political storm is brewing – and there’s no sign anyone can stop it. Italy’s economic problems are in many ways worse than France’s. Public debt stands at nearly 133% of gross domestic product; in France, it’s 96%. The last time Italy grew faster than France was in 1995. Both countries have struggled to stay competitive internationally – but French productivity has risen by roughly 15% since 2001, whereas Italy’s has stagnated.

Meanwhile Italian politics goes from bad to worse. The Five Star Movement, a populist force that wants to hold a referendum on Italy’s membership of the euro system, is riding high in the polls and currently neck and neck with the center-left Democratic Party. The general election, scheduled for next spring, is unlikely to produce a clear winner – and there’s even a small chance it may result in a Eurosceptic government, if the Five Stars were to win enough votes and form an alliance with the fiercely anti-euro Northern League. Europhiles in Italy are busily looking for an Italian Macron – someone who could offer a liberal remedy for Italy’s economic woes while fighting off the threat of “It-exit.” Investors would like that. In the autumn, the European Central Bank looks set to slow its purchases of government debt. The prospect of political instability in Rome could spook investors, raising doubts over the sustainability of Italy’s debt.

In many ways, Matteo Renzi, Italy’s former prime minister, who resigned after a heavy defeat in December’s constitutional referendum, would be the obvious choice. At 42, he is only three years older than Macron. He too has sought to modernize the left, even though he preferred to climb through the ranks of his party, rather than set up a new one as Macron did. The trouble is that Renzi looks increasingly like a spent force. He has just obtained a fresh mandate as party leader, but many Italians doubt his promises because he reneged on a pledge to quit politics if he lost the referendum. His message has also become muddled. He claims to be pro-EU, but never misses a chance to bash Brussels – for imposing fiscal austerity, especially. Why should voters opt for Renzi’s half-hearted euroskepticism when they can have the real thing?

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“Money does not give you the right to fund revolutions to recast the world in your image.”

Soros At it Again – Trying to Overthrow Polish Government? (Martin Armstrong)

QUESTION: Mr. Armstrong, I attended your March 1999 conference in Tokyo when I worked for ___ bank. I remember you called out Soros and crew and said they were trying to manipulate the yen for fiscal year end. You warned the Japanese how to defeat the Club. If I remember, he and his crew lost $1 billion when everyone in Tokyo followed your advice. Many assumed what they did to you 6 months later was retribution. Now he is at it in Poland funneling money he made from such trading in through Norway to create political unrest. What is it with this guy? Why does he play God?

ANSWER: Oh yes. I remember that event very clearly. That’s why they started calling me Mr. Yen because it was me and our clients against the Club and the Club lost. They were trying to push the yen down for the fiscal year-end roll of March 31st and then run it up into April 1st. They had our clients lock it in and that forced the manipulators out. That was a wild day – 3 big figures in a single day in an outside-reversal was a big move back then. I know the rumor was that Soros was in on that and the Club lost $1 billion. Not sure how much they lost on that one. It was the good-old fun days of confrontations. The Polish government wants to stop the distribution of Norwegian money flowing into Poland coming from Soros’ funded Batory Foundation, which manages over 800 million euros with a target of overthrowing the Polish government by 2020.

Since 2014, the Batory Foundation has distributed some 130 million zlotys (around 31.7 million euros) to various associations and organizations within Poland to change the government. According to Bloomberg, this includes organizations for the promotion of parliamentary democracy , but only if it agrees with Soros agenda. Effectively, Soros is trying to defeat ‘Catholic values’ in Poland which are supported by the population and government. [..] Soros has publicly stated he does not believe in God. Many who worked for him said they think he believes he is a god with the right to reshape the world in his image. So have many throughout history and they are responsible for the murder of countless millions. Money does not give you the right to fund revolutions to recast the world in your image.

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Merkel knows Putin can’t give in on Ukraine. Useless rhetoric.

In Tense Encounter, Merkel Tells Putin Sanctions Must Remain (BBG)

German Chancellor Angela Merkel told President Vladimir Putin that EU sanctions will have to remain on Russia as the two leaders clashed over Ukraine, human rights and election meddling at a chilly encounter in the Black Sea city of Sochi. Addressing a joint press conference with Putin after about two hours of talks on Tuesday, Merkel raised concerns about the rights of homosexuals in Chechnya and Russia’s role in the war in Syria. She devoted much of her time to the lack of progress in resolving the three-year-old conflict in Ukraine. While Putin sought to lay the blame on the Ukrainian government, the chancellor said that a cease-fire is required as part of the “arduous” so-called Minsk process for restoring peace in eastern Ukraine and appealed to him to make it happen.

“My goal remains to get to the point where we can lift EU sanctions, but there’s a link here,” Merkel told reporters on her first visit to Russia since May 2015. The peace process is “moving very slowly, we only make progress in small steps and constantly have setbacks.” Merkel, who met with President Donald Trump at the White House in March, is visiting Putin in her capacity as holder of the presidency of the Group of 20 nations. As well as Ukraine, Merkel and Putin discussed the civil war in Syria and the G-20 summit in Hamburg in July, when the Russian and U.S. presidents are scheduled to meet for the first time. Ukraine was the main flashpoint, with Putin reiterating his stance that the Russian-backed breakaway regions in southeastern Ukraine split off because of a “coup d’etat, an unconstitutional change of power in Kiev.”

Merkel noted the two leaders’ “different opinions” about the origins of the conflict in Ukraine, which spiraled after protests over a scrapped accord with the EU triggered the downfall of the Russian-backed government in 2014. “We don’t share this view,” Merkel said in the briefing, which dispensed with the usual pleasantries or leaders’ banter. “We think that the Ukrainian government came to power through democratic means.” Although she’s among Putin’s sternest critics, Merkel has sought to keep a channel open to the Russian leader even as she holds the line on EU sanctions, which are a response to Russia’s annexation of Crimea and backing for Ukrainian separatists. Hours before Putin was scheduled to speak by phone with Trump on Tuesday, he responded again to allegations of electoral interference, saying “we never interfere in the political life of other countries.”

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There are people with less bias on Putin. Just not in US or EU politics.

‘It’s Very Important We Hear What Putin Has To Say’ – Oliver Stone (RT)

The man behind three films about American presidents, Oliver Stone, says his upcoming feature about Russian President Vladimir Putin “opens up a whole viewpoint that we as Americans haven’t heard,” and could help prevent “a dangerous situation – on the brink of war.” Academy Award-winning director and revered documentary filmmaker Stone said in interview with the Sydney Morning Herald that his new film about Putin will be released soon. “It’s not a documentary as much as a question and answer session,” he said. “Mr. Putin is one of the most important leaders in the world and in so far as the United States has declared him an enemy – a great enemy – I think it’s very important we hear what he has to say.” The film will present Putin’s viewpoint of political events since he was first elected president of Russia in March 2000.

“It opens up a whole viewpoint that we as Americans haven’t heard,” Stone told the newspaper, adding that his crew went to see the indefatigable Russian leader four times over the course of two years. “I talked to him originally about the Snowden affair, which is in the film. And out of that grew, I think, a trust that he knew that I would not edit it so much,” he said, adding that Putin “talks pretty straight.” “I think we did him the justice of putting [his comments] into a Western narrative that could explain their viewpoint in the hopes that it will prevent continued misunderstanding and a dangerous situation – on the brink of war.” The 70-year-old director also commented the accusations of Russian influence on the US presidential elections.

“That’s a path that leads nowhere to my mind. That’s an internal war of politics in the US in which the Democratic Party has taken a suicide pact or something to blow him up; in other words, to completely de-legitimize him and in so doing blow up the US essentially. “What they’re doing is destroying the trust that exists between people and government. It’s a very dangerous position to make accusations you cannot prove,” he added. Stone also said he does not believe claims circulating in the mainstream media that Moscow allegedly passed some classified documents to WikiLeaks in a bid to influence the November US elections. “I hold Assange [WikiLeaks editor Julian Assange] in high regard in many issues of state. I take very seriously his statement that he received no information from Russia or any state actors,” Stone said.

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“.. it is French and German taxpayers who will pay the price when the Greek debt is inevitably written off.”

I should get the book later this week.

Adults in the Room – One Of The Greatest Political Memoirs Ever (Mason)

Varoufakis began on the outside – both of elite politics and the Greek far left – swerved to the inside, and then abruptly abandoned it, after he was sacked by his former ally, Greek prime minister Alexis Tsipras, in July 2015. He dramatises his intent throughout the crisis with a telling anecdote. He’s in Washington for a meeting with Larry Summers, the former US treasury secretary and Obama confidant. Summers asks him point blank: do you want to be on the inside or the outside? “Outsiders prioritise their freedom to speak their version of the truth. The price is that they are ignored by the insiders, who make the important decisions,” Summers warns. Elected politicians have little power; Wall Street and a network of hedge funds, billionaires and media owners have the real power, and the art of being in politics is to recognise this as a fact of life and achieve what you can without disrupting the system.

That was the offer. Varoufakis not only rejected it – by describing it in frank detail now, he is arming us against the stupidity of the left’s occasional fantasies that the system built by neoliberalism can somehow bend or compromise to our desire for social justice. In this book, then, Varoufakis gives one of the most accurate and detailed descriptions of modern power ever written – an achievement that outweighs his desire for self-justification during the Greek crisis. He explains, with a weariness born of nights in soulless hotels and harsh-lit briefing rooms, how the modern power network is built. Aris gets a loan from Zorba’s bank; Zorba writes off the loan but Zorba’s construction company gets a contract from Aris’s ministry. Aris’s son gets a job at Zorba’s TV station, which for some reason is always bankrupt and so can never pay tax – and so on.

“The key to such power networks is exclusion and opacity,” Varoufakis writes. As sensitive information is bartered, “two-person alliances forge links with other such alliances … involving conspirators who conspire de facto without being conscious conspirators”. In the process of telling this story, Varoufakis not only spills the beans but beans of the kind the Greeks call gigantes – fat ones, full of juice. The first revelation is that not only was Greece bankrupt in 2010 when the EU bailed it out, and that the bailout was designed to save the French and German banks, but that Angela Merkel and Nicolas Sarkozy knew this; and they knew it would be a disaster.

This charge is not new – it was levelled at the financial elite at the time by leftwing activists and rightwing economists. But Varoufakis substantiates it with quotes – some gleaned from the tapes of conversations and phone calls he was, unbeknown to the participants, making at the time. Even now, two years after the last Greek election, this is of more than academic interest. Greece remains burdened by billions of euros of debt it cannot pay. Because of the actions taken in 2010-11 – saving private banks by saddling north European states with massive debts – it is French and German taxpayers who will pay the price when the Greek debt is inevitably written off.

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Not going to happen until after the German fall election.

Greece, Creditors To Discuss Options For Debt Restructuring (CNBC)

Greece and its creditors are expected to discuss ways to restructure the country’s debt ahead of a meeting of euro zone finance ministers on May 22, a European official told CNBC on Tuesday. Athens agreed on Tuesday to introduce new laws on labor, energy reforms, pension cuts, and tax rises. This paves the way for a fresh disbursement of money from creditors in mid-June, but above all it allows Greece, its European creditors, and the IMF to consider how they will restructure the country’s debt. A European official who follows the bailout talks told CNBC that there isn’t a specific date for a solution to Greece’s debt but the first discussions on this issue will start soon. “From now until the Eurogroup meeting of May 22 there will be discussions to consider options for debt relief,” the official said.

Greece has to legislate the new reforms within two weeks. However, these new laws won’t take effect until 2019 and 2020 and will be dependent on the country’s economic performance. For example, among the new measures is the promise to cut pensions in 2019 and cut the tax-free threshold in 2020 to produce savings worth 2% of GDP. But if Athens exceeds its targets, it is allowed to offset the austerity measures and reduce taxes. During the first stages of talks on debt restructuring, the European Stability Mechanism, which is the euro zone’s permanent bailout fund, will produce a new debt sustainability analysis. Current economic forecasts indicate that Greece’s public debt stood at about 180% of GDP in 2016. The IMF will also be doing its debt sustainability analysis to include the recently-agreed measures.

The Fund wants an agreement on measures to make Greece’s debt more sustainable before deciding whether it is participating with its own money in the Greek bailout program. Dimitris Tzanakopoulos, spokesperson to the Greek government told reporters last month, that the IMF will make a “small” funding contribution that will not last for more than one year, so it ends at the same time as the current European program, which runs out in August of 2018. The IMF’s participation in the third bailout program to Greece is key for many euro countries, which perceive the fund’s involvement as giving credibility to the reform process in Greece. One of these countries is Germany, but the upcoming federal election might reduce Berlin’s room to restructure Greece’s debt.

“We will get some IMF participation, but no significant number,” Johannes Mayr, head of economic research at Bayern LB ,told CNBC via email. On the debt issue, “we need a compromise between the IMF and the EU/ESM (European Stability Mechanism), he said, “and this is realistic only after the German elections.” Neil Dwane, global strategist at Allianz Global Investors, added: “National governments, like Germany, would lose popularity if they wrote off Greek debt.” “I would expect more extend and pretend from the EU and the IMF,” he said via email.

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No Greek default, but nothing else either: again, until after the German fall election. And even then.

Greece Will Avoid Default After Bailout Deal – But Faces More Austerity (G.)

The long road to Greece emerging from its worst financial crisis in modern times reached another milestone on Tuesday as the country concluded a crucial compliance review that will allow it to avert default in July. At the cost of yet more painful austerity – in the form of extra pension cuts and tax increases – international creditors agreed to disburse €7.5bn (£6.3bn) in emergency loans to enable Athens to honour maturing debt repayments. More importantly, lenders accepted to set talks in motion on making Greece’s debt mountain more manageable – vital if the country is to gain access to the capital markets from which it has been almost completely exiled since 2009. [..] The deal ends more than six months of intense wrangling over the fiscal and structural reforms that Athens must implement in exchange for loans from its third, €86bn bailout programme.

Although the programme was outlined in 2015 when Greece came closest to crashing out of the eurozone and reverting to the drachma, the conditions attached to the lifeline remained open to negotiation. Discord most recently had focused on labour reforms and pensions – two issues that Tsakalotos, a British-trained Marxist economics professor, had felt especially strongly about. Under the agreement, the leftist-led government undertook to further slash pensions by 18% as of 2019. Pension payments have now been reduced 12 times since the start of the crisis, and cut by 40% in the past six years. With poorer out-of-work families often depending on them, news of a further drop was met with fury by union leaders, who immediately announced industrial action.

The two-party coalition led by the prime minister, Alexis Tsipras, also agreed to broaden the tax-free threshold by effectively dispensing with tax breaks as of 2020. Both measures are expected to produce savings worth €3.6bn or 2% of GDP. “It will be a very hot spring,” Odysseus Trivalas, acting president of the union of public sector employees, told the Guardian. “We have yet to see the details of this agreement but what we know is that it will mean further cuts. There will be a lot of strikes and a general 24-hour lockdown when the measures are brought to parliament for vote.”

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“On a corner of Monastiraki Square full of tourists and passers-by, a group of volunteers from the soup kitchen O Allos Anthropos (The Fellow Man) cook chicken with rice. In less than 20 minutes, 230 hot meals are delivered to people who waited more than an hour to get them.”

Greek Poverty Deepens During Seven Years Of Austerity (AP)

Over the past seven years, austerity has left visible scars in Greece’s capital. A walk around Athens reveals more homeless people than ever despite some signs of a rosier economic outlook. Thousands of shops, mostly small businesses, are shuttered here and across the country. In what used to be a busy shopping arcade, closed stores are padlocked against a backdrop of hanging Greek flags. Whole families can be seen lining up for free meals at a growing number of soup kitchens. “Every day we feed 400 to 500 people, and this number has increased even more in the past two years,” says Evangelia Konsta, organizer and sponsor of the meals offered by the Church of Greece in a run-down neighborhood in central Athens.

Yesterday, IMF and European negotiators bailout negotiators reached an agreement with Greece’s government to continue rescue funding in return for a painful new round of cuts and higher taxes over the next three years. High unemployment and a steady decline of living standards for most Greeks for seven consecutive years have had lasting effects. Greece has survived on international rescue loans since 2010, granted by the IMF and other countries using the euro currency in exchange for drastic cuts in public spending and benefits. Greece is now in its third bailout. A few steps away from the Church-run soup kitchen is a homeless shelter also run by the Church. Guests in its tiny rooms include one family with their young children and a retired nurse suffering from cancer who is still waiting to get her pension application approved.

Another shelter, the “Shelter of Love and Solidarity,” has a great view of the ancient Acropolis that’s barely noticed by the hundreds of homeless and poor who come twice a week to wash their clothes and take a hot bath. “The shelter is the best option for us because the government doesn’t really do anything for us,” says Ilias Kosmidis, 38, who has been sleeping on the street for the past two years. While waiting to wash their clothes, people at the shelter have developed friendships, and catch up on the news, including the French presidential election. Sofia Vitalaki and her husband Costas, both retired civil servants, have run the shelter since 1991. “It’s not just the food,” she says. “Most people want their dignity back and here we try to support them.”

On a corner of Monastiraki Square full of tourists and passers-by, a group of volunteers from the soup kitchen O Allos Anthropos (The Fellow Man) cook chicken with rice. In less than 20 minutes, 230 hot meals are delivered to people who waited more than an hour to get them. At the end of every month, it’s become a familiar sight outside banks: pensioners waiting in huge lines to collect their monthly checks. Few know how to use ATMs. While in line, they fret over how to make ends meet after years of cuts to their earnings, worrying about more austerity being planned. They won’t have long to wait till the next round of cuts. The government on Tuesday finalized its agreement with bailout lenders to ax pensions further, starting on January 1, 2019.

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Mar 282017
 
 March 28, 2017  Posted by at 8:38 am Finance Tagged with: , , , , , , , , , ,  Comments Off on Debt Rattle March 28 2017


Dorothea Lange Abandoned cafe in Carey, Texas 1937

 

A Nation of Landowners – But For How Long? (M.)
Middle-Class, Even Wealthy Americans Sliding Inexorably Into The Red (MW)
Italy’s Monte Paschi Bailout Has Some ECB Supervisors Grumbling
NY Fed: “Oil Prices Fell Due To Weakening Demand” (ZH)
Why Did Preet Bharara Refuse to Drain the Wall Street Swamp? (Bill Black)
A Detailed “Roadmap” For Meeting The Paris Climate Goals (Vox)
In UK Access To Justice Is No Longer A Right, But A Luxury (G.)
The Curse of the Thinking Class (Jim Kunstler)
Tensions Flare As Greece Tells Turkey It Is Ready To Answer Any Provocation (G.)
Erdogan Races Against the Dollar in Campaign for Unrivaled Power (BBG)
Tillerson Will Not Meet Turkey Opposition In Ankara Visit This Week (R.)
Troika Pushes Greece To Sell Up To 40% Of State-Controlled Power Utility (R.)
Fraport Greece Signs Funding Deal With 5 Lenders (K.)
Contraction Of Credit Continues Unabated In Greece (K.)
Mikis Theodorakis: ‘In Tough Times, Greeks Become Heroes or Slaves’ (GR)
Nearly 1,200 Migrants Picked Up Off Libya, Heading To Italy (R.)
Italy Calls For Investigation Of NGO Supported Migrant Fleet (Dm.)

 

 

“To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is enhanced.”

A Nation of Landowners – But For How Long? (M.)

Land occupies a unique position in the economy because it is essential for any activity and, given its fixed supply, an increase in demand for it can only increase its price. Meanwhile finance, which facilitates that demand, has been available in ever-greater abundance since the deregulation of mortgage lending in the 1970s and 1980s. The interaction between the inelastic supply of land and the highly elastic supply of mortgage lending lies at the heart of the house price boom over the past few decades. But while the finance part of the story is relatively new (before the 1970s mortgages were harder to get and lending restricted by the conservative practices of the building societies), the land question has been around for centuries.

Ever since Henry VIII seized the monastery lands in the early 16th century a market has been evolving in land as a privately-owned tradable commodity. What is crucial to the contemporary housing debate, and what this book illustrates brilliantly, is how the control of land is, or has at least been allowed to become, fundamental to economic and political power relations. Because land is permanent and immovable, those who own the exclusive rights to its use are able to siphon off the value of any economic output that is dependent on it. The value of a piece of land therefore reflects the level of activity conducted on or around it, as well as any speculation arising from expectations about its potential future use. This price does not reflect the efforts or ingenuity of its owner, and so it does not reward productive activity but rather penalises it in the form of rent.

This ability of landowners to extract economic rent from productive activity, or the unearned increment, was once at the centre of political discourse. It was an issue that troubled classical economists ranging from Adam Smith to Karl Marx. As the industrial revolution advanced in the 18th and 19th centuries, productivity levels improved, and so the owners of land began to enjoy the fruits of the community’s labour. A land reform movement gathered momentum towards the late 19th century and the writings of the American economist Henry George advocating a land value tax attracted a following. In 1909, a young Winston Churchill (then 35, and a Liberal) decried the land monopolist’s free ride in what remains one of the best descriptions of the dilemma:

“Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains and all the while the landlord sits still. Every one of those improvements is effected by the labour and cost of other people and the taxpayers. To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is enhanced.”

Churchill was careful to stress that it was the system he was attacking not the landowner himself (‘We do not want to punish the landlord. We want to alter the law’). But the law was as it was because landowners controlled parliament and indeed the Liberals’ plan for a land value tax in the People’s Budget, in support of which Churchill had been speaking, was thrown out by the House of Lords.

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How to kill a city part 832.

Middle-Class, Even Wealthy Americans Sliding Inexorably Into The Red (MW)

Not even a high six-figure salary is enough to keep New York City families out of the red. But spare a thought for the average American family, whose costs easily outpace the average income. A recent analysis from Sam Dogen at his personal finance website Financial Samurai showed how difficult it is for high earners to escape the rat race in New York City, one of the priciest places to live in the world. He analyzed a mock budget for an imaginary family of four in which the two 35-year-old breadwinners each make $250,000 a year. After factoring in taxes, 401(k)contributions, home and child care costs, the family was left with just $7,300 for the year — as if they were living “paycheck to paycheck.”

Perhaps nobody is crying for lawyers making $500,000 a year or even $250,000, but the analysis shows just how easy it is for spending habits to take a high salary and turn it into table scraps. Dogen said pressure from peers to spend more is a big contributing factor, adding “everywhere I go, and I’ve been all over the world, high income earners are secretly feeling the same squeeze.” “They are unhappy, getting divorces, and always comparing themselves to wealthier and wealthier people,” he said. “Heck, even a friend who is worth over $200 million after founding and taking public a company feels like he needs to continue working because he has to ‘keep up with the Zuckerbergs.’”

So how would the average American family fare by the same lifestyle? MarketWatch crunched the numbers and found they would be racking up approximately $27,000 in debt a year if they spent the average of what Americans spend on the same activities. This vast difference in economic stability comes even after adjusting for cheaper housing costs and lowering the number of vacations to one a year — the average in the U.S.

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Beware of any central bank announcements made the day after Christmas.

Italy’s Monte Paschi Bailout Has Some ECB Supervisors Grumbling

When the European Central Bank declared Banca Monte dei Paschi di Siena solvent last December, the first step toward a state-funded rescue, some members of the 19-nation Supervisory Board weren’t fully on board. Confronted with what they saw as a political agreement to bail out the world’s oldest lender, dissenters went along with the consensus despite their concerns about the bank’s health…[..] To make sense of the Monte Paschi debate, you have to start with a 2014 law known as the Bank Recovery and Resolution Directive, which sets out the EU’s bank-failure rules. The law assumes that if a firm needs “extraordinary public financial support,” this indicates that it’s failing and should be wound down. In that process, investors including senior bondholders can be forced to take losses.

An exception, known as a precautionary recapitalization, is allowed for solvent banks if a long list of conditions is met. As the name suggests, this tool isn’t intended to clear up a bank’s existing problems, such as Monte Paschi’s mountain of soured loans. This temporary aid is allowed to address a capital shortfall identified in a stress test. Daniele Nouy, head of the ECB Supervisory Board, reiterated in an interview on Monday that Monte Paschi and other Italian banks in line for a bailout are “not insolvent, otherwise we would not be talking about precautionary recapitalization.” Not everyone is convinced the bank, whose woes date back many years, qualifies for this special treatment.

“It is unclear if Monte Paschi meets the BRRD’s exemption criteria, and their use has the appearance of promoting national political concerns over a stricter reading of the newly established European rules,” said Simon Ainsworth at Moody’s. “The plan could risk damaging the credibility of the resolution framework, especially given that it would mark its first major test case.” The ECB’s decision on Monte Paschi’s solvency and capital gap was announced by the lender the day after Christmas. The ECB published an explanation of the precautionary recapitalization process a day later, but said little else publicly. On Dec. 29, the Bank of Italy issued a statement that broke down the €8.8 billion rescue into its parts. Solvency in the case of a precautionary recapitalization is determined based on two criteria, the ECB said: the bank meets its legal minimum capital requirements, and it has no shortfall in the baseline scenario of the relevant stress test.

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I’ve been talking about falling oil demand for so long that when other bring it up now it seems all new again.

NY Fed: “Oil Prices Fell Due To Weakening Demand” (ZH)

[..] one aspect of price formation that is rarely mentioned is demand, which is generally assumed to be unwavering and trending higher with barely a hiccup. The reason for this somewhat myopic take is that while OPEC has control over supply, demand is a function of global economic growth and trade (or lack thereof) over which oil producers have little, if any control. And yet, according to the latest oil price dynamics report issued by the Fed, it was declining global demand that pushed prices lower in the most recent, volatile period. As the New York Fed report in its March 27 report, “Oil prices fell owing to weakening demand” and explains as follows: “A decline in demand expectations together with a decreasing residual drove oil prices down over the past week.”

While there was some good news, namely that “in 2016:Q4, oil prices increased on net as a consequence of steadily contracting supply and strengthening, albeit volatile, global demand” offsetting the “modest decline in oil prices during 2016:Q3 caused by weakening global demand expectations and loosening supply conditions,” the Fed’s troubling finding is that the big move lower since 2014 has been a function of rising supply as well as declining demand: Overall, since the end of 2014:Q2, both lower global demand expectations and looser supply have held oil prices down. And while this trend appeared to have reversed in 2016:Q2 and 2016:Q4, recent indications suggest that demand may once again be slowing, which in turn has pressured oil prices back to levels last seen shortly after OPEC’s Vienna deal.

It is curious that according to the NY Fed, at a time when OPEC vows it is cutting production, the Fed has instead found “loose” supply to be among the biggest contributors to the latest decline in oil prices. But what may be concering to oil bulls is that as the decomposition chart below shows, while oil demand was solidly in the green ever since Trump’s election victory, in recent weeks it appears to have also tapered off along with the supply contribution to declining oil prices. This seems to suggest that along with most other “animal spirits” that were ignited following the Trump victory, only to gradually fade, oil demand, and thus price, may be the next to take another leg lower unless of course Trump manages to reignite the Trumpflation trade which, however, over the past month appears to have completely faded.

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“Indeed, Bharara never mustered the courtesy to respond to Bowen’s offers to aid his office.”

Why Did Preet Bharara Refuse to Drain the Wall Street Swamp? (Bill Black)

The New York Times’ editorial board published an editorial on March 12, 2017, praising Preet Bharara as the “Prosecutor Who Knew How to Drain a Swamp.” I agree with the title. At all times when he was the U.S. Attorney for the Southern District of New York (which includes Wall Street) Bharara knew how to drain the swamp. Further, he had the authority, the jurisdiction, the resources, and the testimony from whistleblowers like Richard Bowen (a co-founder of Bank Whistleblowers United (BWU)) to drain the Wall Street swamp. Bowen personally contacted Bharara beginning in 2005.

“You were quoted in The Nation magazine as saying that if a whistleblower comes forward with evidence of wrongdoing, then you would be the first to prosecute [elite bankers]. I am writing this email to inform you that there is a body of evidence concerning wrongdoing, which the Department of Justice has refused to act on in order to determine whether criminal charges should be pursued.” Bowen explained that he was a whistleblower about Citigroup’s senior managers and that he was (again) coming forward to aid Bharara to prosecute. Bowen tried repeatedly to interest Bharara in draining the Citigroup swamp. Bharara refused to respond to Bowen’s blowing of the whistle on the massive frauds led by Citigroup’s senior officers.

Bharara knew how to drain the Wall Street swamp and was positioned to do so because he had federal prosecutorial jurisdiction over Wall Street crimes. Whistleblowers like Bowen, who lacked any meaningful power, sacrificed their careers and repeatedly demonstrated courage to ensure that Bharara would have the testimony and documents essential to prosecute successfully some of Wall Street’s most elite felons. Bharara never mustered the courage to prosecute those elites. Indeed, Bharara never mustered the courtesy to respond to Bowen’s offers to aid his office. [..] Bharara knew how to drain the Wall Street swamp. He had the facts, the staff, and the jurisdiction to drain the Wall Street swamp. Bharara refused to do so.

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We all realize that this is never ever going to happen, right?!

A Detailed “Roadmap” For Meeting The Paris Climate Goals (Vox)

To hit the Paris climate goals without geoengineering, the world has to do three broad (and incredibly ambitious) things: 1) Global CO2 emissions from energy and industry have to fall in half each decade. That is, in the 2020s, the world cuts emissions in half. Then we do it again in the 2030s. Then we do it again in the 2040s. They dub this a “carbon law.” Lead author Johan Rockström told me they were thinking of an analogy to Moore’s law for transistors; we’ll see why. 2) Net emissions from land use — i.e., from agriculture and deforestation – have to fall steadily to zero by 2050. This would need to happen even as the world population grows and we’re feeding ever more people. 3) Technologies to suck carbon dioxide out of the atmosphere have to start scaling up massively, until we’re artificially pulling 5 gigatons of CO2 per year out of the atmosphere by 2050 — nearly double what all the world’s trees and soils already do.

“It’s way more than adding solar or wind,” says Rockström. “It’s rapid decarbonization, plus a revolution in food production, plus a sustainability revolution, plus a massive engineering scale-up [for carbon removal].” So, uh, how do we cut CO2 emissions in half, then half again, then half again? Here, the authors lay out a sample “roadmap” of what specific actions the world would have to take each decade, based on current research. This isn’t the only path for making big CO2 cuts, but it gives a sense of the sheer scale and speed required:

2017-2020: All countries would prepare for the herculean task ahead by laying vital policy groundwork. Like: scrapping the $500 billion per year in global fossil fuel subsidies. Zeroing out investments in any new coal plants, even in countries like India and Indonesia. All major nations commit to going carbon-neutral by 2050 and put in place policies — like carbon pricing or clean electricity standards — that point down that path. “By 2020,” the paper adds, “all cities and major corporations in the industrialized world should have decarbonization strategies in place.”

2020-2030: Now the hard stuff begins! In this decade, carbon pricing would expand to cover most aspects of the global economy, averaging around $50 per ton (far higher than seen almost anywhere today) and rising. Aggressive energy efficiency programs ramp up. Coal power is phased out in rich countries by the end of the decade and is declining sharply elsewhere. Leading cities like Copenhagen are going totally fossil fuel free. Wealthy countries no longer sell new combustion engine cars by 2030, and transportation gets widely electrified, with many short-haul flights replaced by rail.

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Brexit hardly seems Britain’s biggest problem. It’s the gutting of an entire society that is.

In UK Access To Justice Is No Longer A Right, But A Luxury (G.)

Laws that cost too much to enforce are phoney laws. A civil right that people can’t afford to use is no right at all. And a society that turns justice into a luxury good is one no longer ruled by law, but by money and power. This week the highest court in the land will decide whether Britain will become such a society. There are plenty of signs that we have already gone too far. Listen to the country’s top judge, Lord Thomas of Cwmgiedd, who admits that “our justice system has become unaffordable to most”. Look at our legal-aid system, slashed so heavily by David Cameron and Theresa May that the poor must act as their own trial lawyers, ready to be skittled by barristers in the pay of their moneyed opponents. The latest case will be heard by seven supreme court judges and will pit the government against the trade union Unison. It will be the climax of a four-year legal battle over one of the most fundamental rights of all: the right of workers to stand up against their bosses.

In 2013, Cameron stripped workers of the right to access the employment tribunal system. Whether a pregnant woman forced out of her job, a Bangladeshi-origin guy battling racism at work, or a young graduate with disabilities getting aggro from a boss, all would now have to pay £1,200 for a chance of redress. The number of cases taken to tribunal promptly fell off a cliff – down by 70% within a year. Citizens Advice, employment lawyers and academics practically queued up to warn that workers – especially poor workers – were getting priced out of justice. But for Conservative ministers, all was fine. Loyal flacks such as Matthew Hancock (then employment minister) claimed those deterred by the fees were merely “unscrupulous” try-ons, intent on “bullying bosses”. Follow Hancock’s logic, and with all those time-wasters weeded out, you’d expect the number of successful tribunal claims to jump. They’ve actually dropped.

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“Do they covet our Chick-fil-A chains and Waffle Houses? Our tattoo artists? Would they like to induce the Kardashians to live in Moscow? Is it Nascar they’re really after?”

The Curse of the Thinking Class (Jim Kunstler)

Let’s suppose there really is such a thing as The Thinking Class in this country, if it’s not too politically incorrect to say so — since it implies that there is another class, perhaps larger, that operates only on some limbic lizard-brain level of impulse and emotion. Personally, I believe there is such a Thinking Class, or at least I have dim memories of something like it. The farfetched phenomenon of Trumpism has sent that bunch on a journey to a strange land of the intellect, a place like the lost island of Kong, where one monster after another rises out of the swampy murk to threaten the frail human adventurers. No one back home would believe the things they’re tangling with: giant spiders, reptiles the size of front-end loaders, malevolent aborigines! Will any of the delicate humans survive or make it back home?

This is the feeling I get listening to arguments in the public arena these days, but especially from the quarters formerly identified as left-of-center, especially the faction organized around the Democratic Party, which I aligned with long ago (alas, no more). The main question seems to be: who is responsible for all the unrest in this land. Their answer since halfway back in 2016: the Russians. I’m not comfortable with this hypothesis. Russia has a GDP smaller than Texas. If they are able to project so much influence over what happens in the USA, they must have some supernatural mojo-of-the-mind — and perhaps they do — but it raises the question of motive. What might Russia realistically get from the USA if Vladimir Putin was the master hypnotist that Democrats make him out to be?

Do we suppose Putin wants more living space for Russia’s people? Hmmmm. Russia’s population these days, around 145 million, is less than half the USA’s and it’s rattling around in the geographically largest nation in the world. Do they want our oil? Maybe, but Russia being the world’s top oil producer suggests they’ve already got their hands full with their own operations? Do they want Hollywood? The video game industry? The US porn empire? Do they covet our Chick-fil-A chains and Waffle Houses? Our tattoo artists? Would they like to induce the Kardashians to live in Moscow? Is it Nascar they’re really after?

My hypothesis is that Russia would most of all like to be left alone. Watching NATO move tanks and German troops into Lithuania in January probably makes the Russians nervous, and no doubt that is the very objective of the NATO move — but let’s not forget that most of all NATO is an arm of American foreign policy. If there are any remnants of the American Thinking Class left at the State Department, they might recall that Russia lost 20 million people in the dust-up known as the Second World War against whom…? Oh, Germany.

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“The Turkish nationalist opposition leader, Devlet Bahçeli, has gone even further, claiming that several Greek islands are under occupation and reacting furiously when Kammenos visited the far-flung isle of Oinousses. “Someone must explain to this spoiled brat not to try our patience,” he railed. “If they [the Greeks] want to fall into the sea again, if they want to be hunted down, they are welcome, the Turkish army is ready. Someone must explain to the Greek government what happened in 1922. If there is no one to explain it to them, we can come like a bullet across the Aegean and teach them history all over again.”

Tensions Flare As Greece Tells Turkey It Is Ready To Answer Any Provocation (G.)

Fears of tensions mounting in the Aegean and eastern Mediterranean Seas reignited after the Turkish president raised the prospect of a referendum on accession talks with the EU and the Greek defence minister said the country was ready for any provocation. Relations between Ankara and European capitals have worsened before the highly charged vote on 16 April on expanding the powers of the Turkish president, Recep Tayyip Erdogan. Western allies have argued that a vote endorsing the proposed constitutional change would invest him with unparalleled authority and limit checks and balances at a time when they fear the Turkish leader is exhibiting worrying signs of authoritarianism. Erdogan has been enraged by recent bans on visiting Turkish officials rallying “yes” supporters in Germany and the Netherlands.

Highlighting growing friction between Ankara and the bloc, he raised the spectre of a public vote on EU membership at the weekend. “We have a referendum on 16 April. After that we may hold a Brexit-like referendum on the [EU] negotiations,” he told a Turkish-UK forum attended by the British foreign secretary, Boris Johnson. “No matter what our nation decides we will obey it. It should be known that our patience, tested in the face of attitudes displayed by some European countries, has limits.” The animus – reinforced last week when the leader said he would continue labelling European politicians “Nazis” if they continued calling him a dictator – has also animated tensions between Greece and Turkey, and Erdogan’s comments came hours after the Greek defence minister said armed forces were ready to respond in the event of the country’s sovereignty and territorial integrity being threatened.

“The Greek armed forces are ready to answer any provocation,” Panos Kammenos declared at a military parade marking the 196th anniversary of Greece’s war of liberation against Ottoman Turkish rule. “We are ready because that is how we defend peace.” Although Nato allies, the two neighbours clashed over Cyprus in 1974 and almost came to war over an uninhabited Aegean isle in 1996. Hostility has been rising in both areas, with the Greek Cypriot leader Nicos Anastasiades recently voicing fears of Turkey sparking a “hot incident” in the run-up to the referendum. “I fear the period from now until the referendum in Turkey, as well as the effort to create a climate of fanaticism within Turkish society,” he told CNN Greece. Turkey’s EU negotiations have long been hindered by Cyprus, and talks aimed at reuniting its estranged Greek and Turkish communities are at a critical juncture but have stalled and are unlikely to move until after the referendum.

But it is in the Aegean where tensions, matched by an increasingly ugly war of words, have been at their worst. After a tense standoff over eight military officers who escaped to Greece after the abortive coup against Erdogan last July – an impasse exacerbated when the Greek supreme court rejected a request for their extradition – hostility has been measured in almost daily dogfights between armed jets and naval incursions of Greek waters by Turkish research vessels. Both have prompted diplomats and defence experts to express fears of an accident at a time when experienced staff officers and pilots have been sidelined in the purges that have taken place since the attempted coup. The shaky migration deal signed between the EU and Turkey to thwart the flow of refugees into the continent has only added to the pressure.

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The falling dollar is setting up Turkey for dictatorship. The world will come to regret this.

Erdogan Races Against the Dollar in Campaign for Unrivaled Power (BBG)

Turkish President Recep Tayyip Erdogan has lambasted friend and foe alike in a campaign for vast new powers, but his political fate may hang on the one thing he’s stopped carping about: the price of money. With the April 16 vote on strengthening the presidency too close for pollsters to call, Erdogan is no longer berating the central bank and commercial lenders over borrowing costs they’ve pushed to a five-year high. He’s betting any measures taken to arrest the lira’s plunge will pay off at the ballot box. The lira’s value versus the dollar is more than just a pocketbook issue in Turkey, where millions of voters still remember the abrupt devaluations that ravaged their livelihoods in past decades and view the exchange rate as the most important indicator of the nation’s economic health.

Turkey’s trade deficit is the biggest of all top 50 economies relative to output and most of its imports and foreign debt are priced in dollars, so sharp declines in the lira can be ruinous for legions of entrepreneurs like Ramazan Saglam, who owns a print shop in a working-class neighborhood of Ankara. “I bitterly recall when the dollar jumped in 1994 and 2001 – my business collapsed both times,” Saglam said. “I’m supporting the new presidential system wholeheartedly because I don’t want to go bankrupt again.” Saglam nodded at the big red banner billowing from his second-story window to illustrate his point. The Chinese cloth and South Korean ink he used to make it were all bought with dollars, as was the American printer that produced Erdogan’s image and the slogan, “Yes. For my country and my future.”

Given the choice between paying more for credit to buy supplies and keeping the lira in check, he said he’d choose sound money every time. Supporters of the proposed constitutional changes say handing Erdogan sweeping new authority is the only way to achieve the stability that society craves and businesses need to thrive. But opponents say approving the referendum is an invitation to dictatorship, particularly since Erdogan, already the most dominant leader in eight decades, jailed or fired more than 100,000 perceived enemies after rogue army officers attempted a coup in July. “Everybody on the street tracks the exchange rate on a daily basis and Erdogan wins support as long as Turkey can keep the lira stable,” said Wolfango Piccoli, the London-based co-president of Teneo Intelligence, a political risk advisory firm. “But the challenge here is the external backdrop. They can’t really predict what’s coming.”

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The US must cease labeling the PKK a terrorist organization. Or stop backing the Kurds in Syria. Can’t have both.

Tillerson Will Not Meet Turkey Opposition In Ankara Visit This Week (R.)

U.S. Secretary of State Rex Tillerson will not meet members of Turkish opposition groups during a one-day visit to Ankara this week where talks with President Tayyip Erdogan will focus on the war in Syria, senior U.S. officials said on Monday. Thursday’s visit comes at a politically sensitive time in Turkey as the country prepares for a referendum on April 16 that proposes to change the constitution to give Erdogan new powers. A senior State Department official said Tillerson will meet with Erdogan and government ministers involved in the fight against Islamic State in Syria. “It is certainly something we are very acutely aware of and the secretary will be mindful of while he is there,” one State Department official told a conference call with reporters, referring to political sensitivities ahead of the referendum.

American officials expect Erdogan and others to raise the case of U.S.-based cleric Fethullah Gulen, whom the government accuses of orchestrating a failed coup last July. The focus of the Ankara talks is the U.S.-led offensive to retake Raqqa from Islamic State and to stabilize areas in which militants have been forced out, allowing refugees to return home, officials said. A major sticking point between the United States and Turkey is U.S. backing for the Syrian Kurdish YPG militia, which Turkey considers part of the Kurdistan Workers’ Party that has been fighting an insurgency for three decades in Turkey. But the United States has long viewed Kurdish fighters as key to retaking Raqqa alongside Arab fighters in the U.S.-backed Syrian Democratic Forces (SDF). “We are very mindful of Turkey’s concerns and it is something that will continue to be a topic of conversation,” a second U.S. official said.

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Fire sale. The minister actually called these practices ‘cannibalistic’, and rightly so. And that’s not even the best of it. A Greek paper details how a Greek bank, Alpha Bank, lends the money to German investors to buy up Greece’s Public Power Corp. That is about as close to cannibalism as you can get. Economic warfare 101.

Troika Pushes Greece To Sell Up To 40% Of State-Controlled Power Utility (R.)

A Greek minister on Monday accused international lenders of reneging on a 2015 bailout deal by trying to force a fire-sale of its main electricity utility PPC to serve “domestic and foreign business interests.” Under terms of a 2015 bailout deal for Greece worth up to €86 billion, Public Power Corp. (PPC) is obliged to cut its dominance in the Greek market to below 50% by 2020. Although it is not clearly specified in the deal, lenders want Greece to sell some of PPC’s assets. PPC, which is 51% owned by the state, now controls about 90% of the country’s retail electricity market and 60% of its wholesale market. Greece last year launched power auctions to private operators as a temporary mechanism and has proposed that PPC team up with private companies to help achieve this target. But lenders doubt the effectiveness of the measure.

“What they want is that power production infrastructure of up to 40% – PPC’s coal-fired production- is sold. This is what they want right know, which is beyond the (2015) deal,” Interior Minister Panos Skourletis, a former energy minister, told Greek state television. Skourletis on Monday accused the lenders pressing the country to sell-off PPC units at a very low price to serve European and domestic competitors. “It is an assault which has set its sights on PPC’s assets to pass it on to specific European and domestic business interests at a humiliating price,” Skourletis said in an Op-Ed penned for the Efimerida Ton Syntakton daily.

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More warfare, more cannibalism. Airports also ‘privatized’, ‘reformed’. Alpha Bank is also the largest lender in this case. Nice partners too: “..the International Finance Corporation (€154.1 million), a member of the World Bank Group [..] is also the sole provider of euro interest rate hedging swaps..”

Fraport Greece Signs Funding Deal With 5 Lenders (K.)

Five leading financial institutions have signed a long-term financing agreement with German-Greek consortium Fraport Greece, which will soon be managing, operating, upgrading and maintaining 14 regional Greek airports under a 40-year concession contract. The agreement is for total financing of 968.4 million euros. The lenders are Alpha Bank (participating with €284.7 million), the Black Sea Trade & Development Bank (€62.5 million), the European Bank for Reconstruction & Development (€186.7 million), the European Investment Bank (€280.4 million), and the International Finance Corporation (€154.1 million), a member of the World Bank Group.

IFC is also the sole provider of euro interest rate hedging swaps to help Fraport Greece hedge potential fluctuations in interest rates through the term of the loan. Over two-thirds of the total amount (€688 million) will be used to cover the upfront payment (of €1.234 billion) due to state sell-off fund TAIPED upon the airports’ delivery, while €280.4 million will be used to finance upgrading work at the 14 airports. Meanwhile, Fraport Greece recently announced a capital increase raising the company’s total capital to €650 million, most of which will go toward the upfront payment.

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But domestic credit is still collapsing. And so is the economy, of course.

Contraction Of Credit Continues Unabated In Greece (K.)

Bank of Greece figures revealed on Monday a further contraction in the financing of the Greek economy last month, a result of the general uncertainty hanging over the economy and the drop deposits at the country’s banks. The total funding of the economy was down 2% YOY in February, from -1.5% in January, while the monthly net flow of total financing was negative by €801 million, against a negative flow of €1.261 billion in January. The main factor in that decline was the drop in funding to the state, as the annual rate concerning the general government sector posted a 3.7% contraction in February against a 0.1% increase in January. In the private sector it was negative by 1.6% as funding shrank by a net €101 million. The image was somewhat different for enterprises as there was an €82 million monthly increase in the net flow of funding last month, compared with a €643 million decline in January. However, the flow of credit to private clients and nonprofit organizations dipped by €153 million or 2.7% in February.

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Wise old genius. “As soon as three Greeks get together, they start talking of who’s going to be the leader..”

Mikis Theodorakis: ‘In Tough Times, Greeks Become Heroes or Slaves’ (GR)

“During tough times, a Greek can become a hero or a slave,” said legendary Greek composer Mikis Theodorakis in an interview published in Proto Thema Sunday newspaper. The 92-year-old musician, who is also an emblematic figure of the Greek Left, spoke about Greece’s current state, the leftist government, the main opposition party and the bailout agreements. Theodorakis said that he is not shocked about the current condition Greece is in because, historically, the country has been through turmoil several times. He said the Greek spirit, like a light, shines through at the end because Greeks have an inner harmony that prevails. However, Theodorakis said, this is a hard period for Greece and this time he is afraid for the future of the country: “When the Greek is with his back against the wall, he becomes a hero or a slave.”

When asked to compare the current state of the nation with the times of the German Occupation, Theodorakis said that what Greece is going through now is worse: “I don’t remember people going through the trash to find food. I don’t remember elderly people waiting in line to get a cabbage.” Theodorakis spoke in length about the time (2012) opposition leader Alexis Tsipras and leftist legend Manolis Glezos approached him and asked him to join SYRIZA and win the upcoming elections. He said he refused to join because the young candidate did not have a plan on how to get Greece going without supervision and financial aid from the EU and the IMF. He described Greece as a train rolling on tracks laid by the EU and the IMF.

“I told him ‘if you’re planning to come to power without having a plan to change the tracks and provide Greek people with what they need, then you are opportunists and you will only succeed in destroying the country and humiliating the Greek Left’,” the composer said about Tsipras. “With great sadness, I believe that the current plight of the country confirms exactly what I said to Alexis Tsipras, here in my house, in the meeting that I mentioned earlier,” Theodorakis said. The composer said that Greeks have a lust for power: “As soon as three Greeks get together, they start talking of who’s going to be the leader,” he said characteristically.

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A new issue has come to light: where are the NGOs picking up the refugees?

Nearly 1,200 Migrants Picked Up Off Libya, Heading To Italy (R.)

Humanitarian ships rescued almost 1,200 migrants who were crossing the Mediterranean Sea at the weekend on an array of small, tightly packed boats, Doctors Without Borders said on Sunday. A young woman was found unconscious on one of the vessels and later died, the group said. Some 412 people were crammed onto a single wooden boat, while the others were picked up from huge inflatable dinghies, which had set sail from the coast of Libya. The weekend rescues mean that about 22,000 mainly African migrants have been picked up heading to Italy so far this year, while around 520 have died trying to make the crossing.

An Italian prosecutor said last week that humanitarian ships operating off Libya were undermining the fight against people smugglers and opening a corridor that is ultimately leading to more migrant deaths. The chief prosecutor of the Sicilian port city of Catania, Carmelo Zuccaro, said he also suspected that there may be direct communication between Libya-based smugglers and members of charity-operated rescue vessels. NGOs deny any wrongdoing, saying they are simply looking to save lives, but they are facing criticism in Italy, which has taken in about half a million migrants since the start of 2014.

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Italy thinks George Soros is sponsoring this.

Italy Calls For Investigation Of NGO Supported Migrant Fleet (Dm.)

Italian authorities are calling for monitoring of the funding of an NGO fleet bussing migrants into the EU from the North African coast after a report released the European Border and Coast Guard Agency has determined that the members of the fleet are acting as accomplices to people smugglers and directly contributing to the risk of death migrants face when attempting to enter the EU. The report from regulatory agency Frontex suggests that NGOs sponsoring ships in the fleet are now acting as veritable accomplices to people smugglers due to their service which, in effect, provides a reliable shuttle service for migrants from North Africa to Italy. The fleet lowers smugglers’ costs, as it all but eliminates the need to procure seaworthy vessels capable making a full voyage across the Mediterranean to the European coastline.

Traffickers are also able to operate with much less risk of arrest by European law enforcement officers. Frontex specifically noted that traffickers have intentionally sought to alter their strategy, sending their vessels to ships run by the NGO fleet rather than the Italian and EU military. On March 25th, 2017, Italian news source Il Giornale carried remarks from Carmelo Zuccaro, the chief prosecutor of Catania (Sicily) calling for monitoring of the funding behind the NGO groups engaged in operating the migrant fleet. He stated that “the facilitation of illegal immigration is a punishable offense regardless of the intention.” While it is not a crime to enter the waters of a foreign country and pick them migrants, NGOs are supposed to land them at the nearest port of call, which would have been somewhere along the North African coast instead of in Italy.

The chief prosecutor also noted that Italy is investigating Islamic radicalization occurring in prisons and camps where immigrants are hired off the books. Italy has for some months been reeling under the pressure of massive numbers of migrants who have been moving from North Africa into the southern states of the European Union. In December 2016, The Express cited comments made by Virginia Raggi, the mayor of Vatican City, stating that Rome was on the verge of a “war” between migrants and poor Italians. The wave of migrants has also caused issues in southern Italy, where the Sicilian Cosa Nostra has declared a “war on migrants” last year amid reports that the Italian mafia had begun fighting with North African crime gangs who entered the EU among migrant populations.

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Mar 172017
 
 March 17, 2017  Posted by at 8:54 am Finance Tagged with: , , , , , , , ,  1 Response »


DPC Wall Street and Trinity Church, New York 1903

 

California Judge Seeks To Prevent Immigration Arrests Inside State Courts (R.)
Collapsing Pensions Will Fuel America’s Next Financial Crisis (MW)
Statoil CEO Warns of Globalization ‘In Reverse’ (BBG)
Treasury’s Mnuchin Says Trump Does Not Want Trade Wars (R.)
Would Trump Budget Cut Meals On Wheels Funding? (BI)
Dutch Election Puts Question Mark Over Eurogroup Chief Dijsselbloem (R.)
Congressman Huizenga Introduces Bill to Oppose IMF’s Third Greek Bailout (YV)
Senators Demand State Department Probe Into Soros Organizations (ZH)
Mounting Costs, Not PBOC, Could Slow China’s Bank Debt Binge (BBG)
Will Chrystia Freeland Finally Ruin Canadian-Russian Relations? (SCF)
The Energy Market Explained (Clarke and Dawe)
Greek Public Health System On Brink, Doctors Warn (K.)
First-Time Asylum Applicants In Greece Up 339% In 2016 (Amna)
Refugees In Greece Suffering After EU Deal With Turkey, Say NGOs (G.)
Child Refugees In Greece Self-Harming And Attempting Suicide (Ind.)
Ai Weiwei Slams ‘Shameful’ Politicians Ignoring Refugees (AFP)

 

 

One very big step over the decency line.

California Judge Seeks To Prevent Immigration Arrests Inside State Courts (R.)

Chief Justice Tani Cantil-Sakauye said she was gravely troubled by recent reports that federal agents were “stalking undocumented immigrants in our courthouses to make arrests,” in a letter addressed to U.S. Attorney General Jeff Sessions and Secretary of Homeland Security John Kelly. “Courthouses should not be used as bait in the necessary enforcement of our country’s immigration law,” Cantil-Sakauye wrote. Trump has vowed to increase deportations and has widened the net of illegal immigrants prioritized for detention and removal. “We will review the letter and have no further comment at this time,” Peter Carr, a spokesman for the U.S. Department of Justice, said in an email.

Immigrant rights groups say federal agents have entered courthouses with increased frequency this year, including in California, Massachusetts, Maryland and Texas, said National Immigration Law Center staff attorney Melissa Keaney. “It’s definitely an issue we’re seeing a tremendous increase in under the new administration,” Keaney said by phone on Thursday. Cantil-Sakauye stopped short of questioning the legal right of federal agents to enter courthouses to locate and detain unauthorized immigrants. Her letter said the presence of immigration agents in California courthouses could undermine “public trust and confidence in our state court system,” which serves “millions of the most vulnerable Californians.”

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I don’t think pensions are in line to be the next crisis, but they will certainly cause one.

Collapsing Pensions Will Fuel America’s Next Financial Crisis (MW)

Washington has a knack for ignoring long-term financial shortfalls and painting overly rosy scenarios about the future to make their numbers work in the here and now. Case in point: Donald Trump’s unrealistic projection that the U.S. economy will grow at 3% this year, when the latest GDP forecasts have actually been reduced to 1.8% by a number of economists. Then there is Social Security. Many politicians are just too intimidated, uninformed or complacent to tackle the unsustainability of Social Security — which by the latest tally will see its trust fund go to zero just 17 years from now, in 2034. But while fudging GDP numbers is dangerous for America’s economic outlook and the demise of Social Security in two decades is a serious long-term concern, America faces a mathematical problem that dwarfs both of these items: A pending pension crisis that could leave millions of Americans high and dry in the very near future.

Sure, it would be difficult for many if the U.S. economy stumbles under misguided Trump policies. And yes, the idea of even modest cuts to Social Security in the coming decades could serious affect millions of seniors. But take a look South Carolina’s government pension plan, which covers roughly 550,000 people – one out of nine state residents – but is a staggering $24.1 billion in the red. This is not a distant concern, but a system already in crisis. Younger workers are being asked to do much more to support the pensions of retirees. An analysis by the The Post and Courier of Charleston noted recently that “Government workers and their employers have seen five hikes in their pension plan contributions since 2012, and there’s no end in sight.” (Most now contribute 8.66% of their pay, vs. 6.5% before the changes.) At the same time, the pension fund has been chasing more stocks and alternative investments instead of relying on stable investments like bonds that may be much less volatile but generate only meager returns.

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Of course Big Oil CEOs like globalization. But it’s still quite something to hear an oil exec claim: “Cross-border cooperation is also essential to solve climate change..”

Statoil CEO Warns of Globalization ‘In Reverse’ (BBG)

After the surprise election of Donald Trump, the head of Norway’s biggest oil company headed to Washington D.C. this month looking for reassurance. He came away as worried as ever. “I was looking for clarity, also some guidance, good advice, and also some people to talk to – new relationships within the administration,” Statoil CEO Eldar Saetre told a conference in Oslo on Thursday. “I have to be honest with you – I didn’t get much of any of it.” Saetre, whose company has stakes in three U.S. onshore areas and in the Gulf of Mexico, was concerned about the protectionist bent of the new president’s rhetoric. Combined with last year’s Brexit vote and looming elections in Europe where nationalists are gaining influence, he sees Trump’s victory as a threat to global free trade.

“From Brexit to Trump, we see warning signs that globalization could be going in reverse,” Saetre said at the annual Swedbank Energy Summit. “For our industry, I believe that would be very negative.” Trump’s energy policies could benefit oil producers in the U.S. by loosening regulations and freeing up more areas for drilling. However, his protectionist agenda could affect economic growth and trading relations with countries from neighboring Mexico to Asia. “Global collaboration and integrated markets have been and will remain key to make our industry prosper,” Saetre said. “Fair, open access to markets are keys to enable investments, value creation and jobs in our industry.” Cross-border cooperation is also essential to solve climate change, making it “more important than ever,” Saetre said.

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Schäuble and Mnuchin. Lovely pair.

Treasury’s Mnuchin Says Trump Does Not Want Trade Wars (R.)

U.S. Treasury Secretary Steven Mnuchin said on Thursday that the Trump administration has no desire to get into trade wars, but certain trade relationships need to be re-examined to make them fairer for U.S. workers. At a news conference with German Finance Minister Wolfgang Schaeuble, Mnuchin said that President Donald Trump views trade as important for economic growth. But when asked whether the Group of 20 finance ministers should explicitly reaffirm their past vow to resist protectionism, Mnuchin repeated his view that some U.S. trade relationships need to be re-examined to make them fairer and more reciprocal. “It is not our desire to get into trade wars,” Mnuchin said. “The president does believe in free trade but he wants free and fair trade.” Differences over trade could become a sticking point for G20 finance officials at a meeting in the spa town of Baden-Baden, Germany this weekend.

Schaeuble told Reuters in an interview that it was unclear whether the anti-protectionism language would remain in the G20 statement to be issued at the meeting’s close on Saturday. Given that Trump’s “America First” agenda, trade issues could be set aside for G20 leaders to tackle at a summit in July, Schaeuble said. But both Schaeuble and Mnuchin both said they had a constructive discussion ahead of the G20 meeting and pledged to work together through differences to promote growth. “It was a good start,” Schaeuble said of the meeting, adding that it was a positive sign for international cooperation and the G20 process. “We have found a good basis to talk openly about issues where we don’t have the same stance from the outset,” Schaeuble said. Mnuchin said the ministers agreed that they should fight currency manipulation.

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This viral story looks sensationalized. Meals on Wheels gets just part of its funding from the Community Development Block Grant program. I included the article anyway because we’re getting into Bizarro World territory here: “You’re only focusing on recipients of the money,” Mulvaney said. “We’re trying to focus on both the recipients of the money and the folks who give us the money in the first place. I think it’s fairly compassionate to go to them and say, ‘Look, we’re not going to ask you for your hard-earned money anymore.'”

Would Trump Budget Cut Meals On Wheels Funding? (BI)

President Donald Trump’s proposed budget, unveiled on Thursday, would cut federal funding for Meals on Wheels, a program that provides daily meals to millions of low-income seniors across the country. White House Office of Management and Budget Director Mick Mulvaney told reporters at a press conference Thursday that Meals on Wheels “sounds great.” But he said that along with other anti-poverty programs, it is “not showing any results.” “We can’t spend money on programs just because they sound good,” Mulvaney told reporters. “We’re not going to spend money on programs that cannot show that they actually deliver the promises that we’ve made to people.”

Trump’s budget would strip $3 billion from the Community Development Block Grant program, which supports a variety of community-development and anti-poverty programs. Those include Meals on Wheels, which provided 219 million meals to 2.4 million seniors in 2016. CNN reporter Jim Acosta asked Mulvaney if the funding cuts were “hard-hearted.” Mulvaney responded that reducing government spending on ineffective programs is “probably one of the most compassionate things we can do.” “You’re only focusing on half of the equation, right? You’re only focusing on recipients of the money,” Mulvaney said. “We’re trying to focus on both the recipients of the money and the folks who give us the money in the first place. I think it’s fairly compassionate to go to them and say, ‘Look, we’re not going to ask you for your hard-earned money anymore.'”

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Get rid of him already. Right now. Then again, Kazimir is probably next in line, and he’s just as bad. Cooler heads should demand a more reasonable, not neo-liberal choice. Fat chance.

Dutch Election Puts Question Mark Over Eurogroup Chief Dijsselbloem (R.)

Jeroen Dijsselbloem may have to stand down as president of the Eurogroup which coordinates policy in the eurozone if he cannot retain his role as Dutch finance minister in a new coalition after his party was routed in Wednesday’s election. The Labor Party crashed from second to seventh place in preliminary results, losing more than three-quarters of its seats and making it hard for victorious liberal Prime Minister Mark Rutte to retain Dijsselbloem in such a senior cabinet post, even though he has made clear his appreciation of his work. Neither man commented on the matter directly Thursday. Dijsselbloem is due to represent the Eurogroup at a G20 meeting in Germany Friday and to chair the monthly meeting of the 19 eurozone finance ministers in Brussels on Monday.

While other eurozone finance ministers may seek his role, there is a lack of obvious contenders, particularly given that many governments will resist appointing a politician from the right because conservatives hold most other top EU jobs. It is just possible Dijsselbloem might retain his Dutch portfolio. There has also been speculation that the Eurogroup could keep him on as chairman even if he loses his national job – although some senior officials say that is most unlikely. Dijsselbloem, whose second 30-month term ends in January, has been popular with fellow ministers, balancing a background on the left with support from conservative Wolfgang Schaeuble, who wields Germany’s power on the Eurogroup and insists on strict terms for Greece and other states awarded bailout loans.

The Dutchman will remain in office for weeks, and possibly months, as Rutte struggles to put together a new coalition after Wednesday’s election. Rutte’s own party lost seats and the anti-immigration party of Geert Wilders finished in second place. Eurogroup rules do not stipulate that its president must be a serving finance minister. But senior eurozone officials have said lately that they do not believe fellow ministers would keep Dijsselbloem on if he lost his main job in The Hague. In the longer term, there has been talk of making the position a full-time one, with its own staff. But that is not yet agreed.

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Dijsselbloem’s ‘friend’ Varoufakis found this.

Congressman Huizenga Introduces Bill to Oppose IMF’s Third Greek Bailout (YV)

Anyone who doubted that the IMF is in deep trouble over its inane involvement in the toxic Greek bailout, and Berlin’s policy of extending Greece’s insolvency ad infinitum while the country’s social economy shrinks, should now have no more doubts. Congressman Bill Huizenga (R-MI), a senior member of the House Financial Services Committee, yesterday introduced the IMF Reform and Integrity Act, which would require the U.S. to oppose the International Monetary Fund’s (IMF) co-financing of a third Greek bailout with the European Stability Mechanism. If such co-financing were to go forward, the bill would prohibit the U.S. from supporting an IMF quota increase until funds are repaid in full.

“The IMF is supposed to be a lender of last resort, not a fig leaf of first resort for Eurozone members,” said Congressman Huizenga. “The IMF isn’t a fund to rescue political parties in creditor nations, nor should it be a junior partner to outside organizations that lack the commitment to do their work. For seven years now, the IMF has been used to shield Eurozone officials from their voters, which has tarnished the Fund’s reputation, prolonged Greece’s misery, and put off hard choices about Europe’s future that must be made regardless. As the IMF’s largest shareholder, the U.S. should ensure that the Fund remains independent and free from politicization that could put taxpayer dollars at risk. This bill will help make that a reality.”

In addition, the IMF Reform and Integrity Act cancels supplementary IMF funds that have already been deactivated, rescinding them and sending those resources back to the U.S. Treasury. The bill also clarifies existing law to require the U.S. Executive Director of the Fund to oppose any loan to a country whose debt is unsustainable.

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Why Putin threw out Soros, and America should too.

Senators Demand State Department Probe Into Soros Organizations (ZH)

Senator Mike Lee (R-UT) and a group of his colleagues are calling on the newly appointed Secretary of State Rex Tillerson to immediately investigate how US taxpayer funds are being used by the State Department and the United States Agency for International Development (USAID) to support Soros-backed, leftist political groups in several Eastern European countries including Macedonia and Albania. According to the letter, potentially millions of taxpayer dollars are being funneled through USAID to Soros’ Open Society Foundations with the explicit goal of pushing his progressive agenda. “Unfortunately, we have received a credible report that, over the past few years, the U.S. Mission there has actively intervened in the party politics of Macedonia, as well as in the shaping of its media environment and civil society, often favoring left-leaning political group over others. We find these reports discoraging and, if true, highly problematic.”

“Much of the concerning activity in Macedonia has been perpetuated through USAID funds awarded to implementing entities such as George Soros’ Open Society Foundations. As the recipient of multiple grant awards and serving as a USAID contractor implementing projects in this small nation of 2.1 million people, our taxpayer funded foreign aid goes far, allowing Foundation Open Society – Macedonia (FOSM) to push a progressive agenda and invigorate the political left. Our foreign aid should only be used to promote a political agenda if it is in the security or economic interests of our country to do so, and even at that, we must be cautious and respectful in such an endeavor. We should be especially wary of promoting policies that remain controversial even in our own country and that have the potential to harm our relationship with the citizens of recipient countries.”

As Fox News pointed out, USAID gave nearly $15 million to Soros’ Foundation Open Society – Macedonia, and other Soros-linked organizations in the region, in the last 4 years of Obama’s presidency alone. “The USAID website shows that between 2012 and 2016, USAID gave almost $5 million in taxpayer cash to FOSM for “The Civil Society Project,” which “aims to empower Macedonian citizens to hold government accountable.” USAID’s website links to www.soros.org.mk, and says the project trained hundreds of young Macedonians “in youth activism and the use of new media instruments.” The State Department told lawmakers that in addition to that project, USAID has recently funded a new Civic Engagement Project which partners with four organizations, including FOSM. The cost is believed to be around $9.5 million. A citizen’s initiative called “Stop Operation Soros” has also published a white paper alleging U.S. money has been funding violent riots in the streets [..]

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Can the shadow sector step in once again?

Mounting Costs, Not PBOC, Could Slow China’s Bank Debt Binge (BBG)

China may avoid having to pull out the big stick when it comes to reining in a record short-term borrowing spree by its smaller banks. The increased cost to lenders of issuing so-called negotiable certificates of deposit will naturally deflate a market that jumped by 90% in February from a year earlier, according to Ping An Securities. Demand is also waning for the securities, used by Chinese banks as a way of leveraging up investments and expanding their balance sheets, with mutual funds cutting their holdings to the lowest level in at least a year in January. “It’s unsustainable for commercial banks to take such high costs,” said Shi Lei at Ping An, a unit of China’s second-largest insurer. “NCDs are now even more expensive than short-term commercial paper. It will be corrected as lenders complete their adjustments in the term structure of the debt.”

Introduced by the People’s Bank of China in 2013 as a fresh source of money for smaller lenders which have difficulty competing for savings against big state banks, NCDs have morphed into a way for them to fund purchases of each other’s wealth-management products. That boosts refinancing risks in a banking system that will see a record 3.65 trillion yuan ($529 billion) of the notes maturing this quarter. This hasn’t escaped the attention of the authorities, with the PBOC looking at classifying NCDs as interbank liabilities, Caixin.com reported in January, a move that would quell growth in the market given limits on how much in interbank debt Chinese lenders are allowed to hold relative to their overall liabilities. The central bank has been ramping up its campaign to contain leverage since August, tightening money-market rates as a way of discouraging borrowing. The PBOC boosted borrowing costs for lenders Thursday, just hours after the Federal Reserve lifted benchmark interest rates.

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It’s remarkable that she still has her job. What a blemish on Canada she is.

Will Chrystia Freeland Finally Ruin Canadian-Russian Relations? (SCF)

On 10 January 2017 Canadian PM Justin Trudeau fired his minister of external affairs, Stéphane Dion, and replaced him with Chrystia Freeland, who was then minister of international trade. This cabinet shuffle might not have gotten much public notice except that Dion is a distinguished parliamentarian, former leader of the party and leader of the opposition, and a former key minister in the Liberal government of Jean Chrétien. Freeland, on the other hand, is a well-known Ukrainian ultra-nationalist and self-declared Russophobe and hater of Russian President Vladimir Putin. The sacking of Dion was also noteworthy because Trudeau had run on an electoral platform in 2015 promising, inter alia, to improve Canadian relations with Russia, spoilt by the Conservative government of Stephen Harper. When Dion became minister of external affairs, he confirmed the Liberal commitment to re-establish more constructive Canadian-Russian relations.

[..] Why should Canadians care one way or another whether their government supports the Ukraine and sends arms and advisors there to strengthen Ukrainian military forces? Well, the most important reason is that the present government in Kiev is illegitimate in spite of democratic appearances. It is the spawn of a violent coup d’état in February 2014, brokered and supported by the United States and the European Union, which overthrew the democratically elected president Viktor Yanukovich. The vanguard of the Kiev coup d’état are neo-Nazi, fascist or ultra nationalist political and paramilitary organisations, notably the political party Svoboda, the paramilitary Pravyi sektor and various other paramilitary forces such as the so-called Azov and Aidar battalions. These paramilitary units were and are used to crush opposition in those parts of the Ukraine controlled by Kiev.

Neo-Nazi violence and intimidation worked in many places, but not in others. In the Crimea, the population united almost to the last man and woman, to toss out the putschist authorities and to vote for reunification with Russia. In the east, in the Donbass, the anti-fascist resistance repulsed Kiev punitive forces with heavy losses. These remarkable feats of arms, redolent of so many others in Russian history, were wasted by Moscow, which disregarded a first principle of war that one never lets an enemy withdraw to fight another day. «He who spares the aggressor», Stalin once remarked, «wants another war.» It may shock some people to hear Stalin quoted, but Plutarch, Sun Tzu, or Clausewitz might have said the same thing. Moscow supported the so-called Minsk peace accords which were never respected by the Kiev authorities. Ultra-nationalists even boasted that they had agreed to Minsk solely in order to rest and refit their beaten forces. It was only a ruse de guerre.

These are the forces which the Canadian government now supports with the enthusiastic backing of Minister Freeland. For her, it must be a lifelong dream-come-true. There has been much press comment during the last week or so about Freeland’s Ukrainian grandfather, Mykhailo Chomiak, a Nazi collaborator during World War II. Freeland claimed that he was only a refugee from Stalinist violence. He might have been, but he also collaborated with Nazi Germany. In many places in Europe, France and Italy, for example, collaborators were summarily shot or imprisoned after the war. In France, more than 5,000 were executed including Pierre Laval, a prominent French politician, who sided with Nazi Germany and vaunted collaboration to oppose the USSR. Another 38,000 French collaborators were jailed. Chomiak was lucky he was not hanged and that he ended up in northern Alberta, to die a well-to-do farmer.

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More brilliance. “We don’t have en energy system. We have an energy market.”

The Energy Market Explained (Clarke and Dawe)

“Wal Socket. Energy Consultant”

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A European crime. One of many perpetrated on Greece.

Greek Public Health System On Brink, Doctors Warn (K.)

The National Health System (ESY) is on the the brink of collapse, according to the Panhellenic Medical Association (PIS), which cited chronic shortages in staff and equipment at public hospitals around the country due to limited finances, and disruptions in the primary healthcare system. The association added that the only reason the health system is still running is due to the efforts of existing staff, whose endurance levels, however, are being put to the test. “The average age of ESY doctors is 60. And these people will be leaving in a few years,” said PIS president Michail Vlastarakos, adding that public hospitals need 6,500 additional permanent medical staff.

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And the EU still hasn’t supplied the promised help for dealing with the applications.

First-Time Asylum Applicants In Greece Up 339% In 2016 (Amna)

There was a 339% increase of in the number of first-time asylum applicants in Greece in 2016, which rose to 49,875 in 2016 from 11,370 in 2015, according to figures released by Eurostat on Thursday. On the basis of these figures, Greece ranks second among EU countries for the total number of asylum applications filed in relation to its population. Germany is first with 8,789 applications per million population, followed by Greece with 4,525 applications per million population. Third is Austria with 4,587, followed by Malta (3,989), Luxembourg (3,582) and Cyprus (3,350). The number of new asylum applicants on an EU level dropped to 1.204 million in 2016, for a percentage change of -4%, but were more than double the number of applicants in 2014. Most asylum applicants in EU member-states were Syrians (28%), Afghans (15%) and Iraqis (11%). In Greece, Syrians accounted for more than half of asylum applicants (53%), Iraqis for 10% and Pakistanis 9%.

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The NGOs themselves are part of the problem too.

Refugees In Greece Suffering After EU Deal With Turkey, Say NGOs (G.)

Greece is being used as a testing ground for degrading asylum policies that fall short of the democratic values Europe would normally uphold, say refugee groups marking the first anniversary of a deal designed to slow arrivals to the continent. The accord struck last year between Turkey and the EU has been praised in some quarters for having slowed arrivals into Europe and reduced deaths in the Aegean sea. But basic human rights were lost in the process, the organisations claim. “Greece has become a testing ground for policies that are eroding international protection standards,” said the Norwegian Refugee Council, International Rescue Committee and Oxfam, in a joint report based on extensive fieldwork on Aegean islands where more than 14,000 men, women and children are trapped in abysmal conditions.

“Over the course of the year, there have been deaths, suicide attempts, people engaging in self harm, and children, women and men exposed to abuse and sexual violence.” The withering assessment, coming almost 12 months to the day since the agreement was reached between Ankara and Brussels, is in stark contrast to the official view of an accord hailed by the EU, at the time, as a breakthrough in the migration crisis. Agreed in exchange for €6bn in refugee aid to Ankara, it was seen as a vital step in resolving a crisis that at its height threatened to tear the bloc apart. Since its implementation, the number of refugees and migrants going to Europe via Turkey has dropped dramatically.

Islands such as Lesbos, which is near Turkey, are reporting 100 arrivals or fewer a day, while in 2015, when more than 1 million people streamed into Europe, it received 10,000 men, women and children over one weekend. But NGOs say the reality on the ground is that the deal has prolonged and exacerbated human suffering. The report found that, incarcerated on Greek islands, asylum seekers had been made to live in substandard and overcrowded conditions for months on end. With limited access to fair and effective asylum procedures they were subject to “a convoluted and constantly changing process” that lacked oversights and checks and balances. Often legal experts were unable to keep track of a system that was impossible for people to navigate alone.

A separate report by Save the Children and Médecins Sans Frontières warned that there were worrying levels of mental health problems among migrants and refugees in the Greek camps. It said people including children as young as nine were cutting themselves, attempting suicide and using drugs to cope with the “endless misery”. Mental health was “rapidly deteriorating due to the conditions created as a result of this deal”, Save the Children said. [..] The report expressed the NGOs’ fears that the deal would become a blueprint for crises elsewhere. “Beyond the deeply concerning situation in Greece, the EU is looking to replicate this model elsewhere, and, in so doing, risks setting a dangerous precedent for the rest of the world,” said the report.

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Creating child zombies.

Child Refugees In Greece Self-Harming And Attempting Suicide (Ind.)

Desperate refugees trapped in Greece are self-harming and attempting suicide as a result of “disastrous” EU policies, aid agencies have warned. More refugees are dying than ever before while attempting to reach Europe, almost a year after a controversial deal was struck with Turkey in an effort to prevent boat crossings across the Aegean Sea. The agreement has stranded thousands of asylum seekers in Greece, where aid agencies say children are among rising numbers of migrants trying to kill themselves after months trapped in squalid camps. Research by Save the Children found more than 5,000 minors are living in “appalling conditions” that are driving a mounting mental health crisis. It has recorded children as young as nine self-harming and 12-year-olds attempting suicide, sometimes filming themselves in the act, as well as a spike in drug and alcohol abuse by teenagers who are exploited by dealers in camps.

Violent protests and deaths are traumatising the youngest and most vulnerable refugees, whose families say they are too scared to let their children play out of sight in case they are hurt or abused. Save the Children staff report that some unaccompanied children live in “24-hour survival mode” and sleep in shifts to try to stay safe, while others disappear or pay smugglers to leave the Greek islands. “The EU-Turkey deal was meant to end the flow of ‘irregular migrants’ to Greece, but at what cost?” said Andreas Ring, Save the Children’s humanitarian representative. “Many of these children have escaped war and conflict only to end up in camps many of them call ‘hell’ and where they say they are made to feel more like animals than humans.” Since 20 March 2016, all migrants arriving on Greek islands have been held, under threat of deportation to Turkey, while their asylum applications are processed, but legal blocks have slowed transfers and left refugees in overcrowded tent camps for up to a year.

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“..you cannot be so short-sighted, you cannot have no vision, you cannot sacrifice human dignity and human rights for political gain..”

Ai Weiwei Slams ‘Shameful’ Politicians Ignoring Refugees (AFP)

Chinese dissident artist Ai Weiwei on Thursday slammed “shameful” politicians who ignore refugees as he launched a giant art installation centered on their fate at the National Gallery in Prague. Called “Law of the Journey”, the show features a 70-metre-long (230-foot-long) inflatable boat with 258 oversize refugee figures. A tribute to the thousands who have drowned crossing the Mediterranean, the piece is Ai’s biggest-ever installation. It will be on display until the end of the year. “My message is very clear: being a politician or a political group, you cannot be so short-sighted, you cannot have no vision, you cannot sacrifice human dignity and human rights for political gain,” Ai told AFP. “I think this is very, very shameful behaviour,” he added.

The Czech Republic and the other post-Communist central European members have rejected EU plans to allow Muslim refugees on their territories throughout the migrant crisis. Immigration from Muslim countries has become a hot political topic in these states, although most refugees have opted for wealthier western countries like Germany or Sweden. “If we see somebody who has been victimised by war or desperately trying to find a peaceful place, if we don’t accept those people, the real challenge and the real crisis is not of all the people who feel the pain but rather for the people who ignore to recognise it or pretend that it doesn’t exist,” said Ai. “That is both a tragedy and a crime,” said the 59-year-old painter, sculptor and photographer. Ai spent the last year visiting such migrant and refugee hotspots as the US-Mexican border badlands to the Turkish-Syrian frontier and crowded holding camps on Greek islands.

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