Jul 272020
 


Opening of Golden Gate Bridge May 27 1937

 

$1,200 Stimulus Check, Eviction Moratorium, and Reduced Unemployment Aid (ZH)
Gold Soars To All-Time High As Dollar Dive Boosts Safety Rush (R.)
Lockdown Has Made The Nation Happier – Study (Ind.)
Vietnam Orders Evacuation Of 80,000 People After Three Test Positive (Ind.)
Spain’s COVID19 Death Toll Could Be 60% Higher Than Reported – El Pais (RT)
The $52 Trillion Bubble That Has “Hijacked China’s Economy”
Britain Unveils Plans To Tackle ‘Obesity Time Bomb’ (R.)
Riots Are Driving Portland’s Small Businesses Under (RT)
Biden Campaign Declines ‘Fox News Sunday’ Interview (Fox)
More Willful Blindness By The Media On Spying By Obama Administration (Turley)

 

 

Don’t know why, is it because it’s Monday, or because I worked hard all weekend, but I had a bit of a hard time finding things today that I found interesting. That was mostly made up for when I saw these headlines in Britain’s Independent newspaper: “Lockdown Has Made The Nation Happier” and “Lockdown Took Away My Freedom But Set Me Free Spiritually”. That is genius. Especially when followed by the news that Vietnam is evacuating 80,000 people from Danang because three were infected. That’s 80,000 people about to be happier.

Plus more news that the dollar is diving. Nor sure against what. I still think it’s gold that is rising, not the other way around. One look at gold vs euro confirms it. But that’s just me. Then again, sure, there’s tons of people betting against the dollar right now. That doesn’t mean it’s smart bet, though.

 

And as I write this, there’s another Assange circus “trial” happening. Intensely sad.

 

 

Substantial declines in new cases for both the world and the US. I just wish I could be a bit happier about them, but it was only a Sunday yesterday.

 

 

 

 

 

 

 

 

 

 

Power, not people. From both sides. Down to the wire it is.

$1,200 Stimulus Check, Eviction Moratorium, and Reduced Unemployment Aid (ZH)

With the Trump Treasury sitting on $1.8 trillion and three months to spend it, the White House and Senate Republicans are set to introduce a $1 trillion spending bill on Monday which would be released in stages – angering Democrats who are pushing for an immediate, $3 trillion shotgun blast of stimulus. Speaking with ABC’s “This Week,” White House Chief of Staff Mark Meadows said “I see us being able to provide unemployment insurance, maybe a retention credit, to keep people from being displaced or brought back into the workplace, helping with our schools,” adding “we can negotiate on the rest of the bill in the weeks to come.” “The Trump administration opposes an extension of a $600-a-week enhanced unemployment payment that expired this month, Mnuchin and Meadows said.

Instead, White House officials favor a plan to reimburse an individual’s lost wages or salary by up to 70%”, said Mnuchin and Meadows.” -Newsday. House Speaker Nancy Pelosi (D-CA) popped a fuse at the GOP proposal, blaming Republicans for waiting too long to negotiate for more relief after House Democrats passed a fifth, $3 trillion relief bill which would have included immediate aid to state and local governments, expanded testing and contact tracing for COVID-19. Appearing on CBS’s “Face the Nation,” Pelosi said that Republicans are “in disarray and that delay is causing suffering for America’s families. So we have been ready for two months and 10 days. I’ve been here all weekend hoping they had something to give us.” Treasury Secretary Steven Mnuchin, meanwhile, says the White House is “prepared to act quickly.” We bet they are.

Mnuchin added that unemployment benefits would be extended, while schools and universities would receive protection against “frivolous” lawsuits – part of overall GOP support for protections that would also include corporations. “Within the trillion-dollar package, there’s certain things that have time frames that are a bigger priority, so we could look at doing an entire deal, we could also look at doing parts,” said Mnuchin, adding that he would push for a “technical fix” to unemployment insurance after many have criticized the $600 weekly benefit as being too high, and a disincentive to searching for a job.

Read more …

Oh wait, I covered this yesterday. This morning, gold rises about as much vs the euro as vs the USD. So what is the dollar “diving” against other than gold and silver?

Gold Soars To All-Time High As Dollar Dive Boosts Safety Rush (R.)

Gold surged to record highs on Monday as an intensifying U.S.-China row and a weaker dollar sent investors scurrying to the safety of bullion to hedge against the risks to a global economy already reeling from the COVID-19 pandemic. Spot gold rose 1.6% to $1,931.50 per ounce by 0627 GMT after hitting a record high of $1,943.93. U.S. gold futures gained 1.6% to $1,927.50. Silver too joined the rally, jumping more than 6% to $24.36, its highest since September 2013. Gold is in “perfect condition to move higher,” said ANZ commodity strategist Soni Kumari, amid the virus crisis and central banks pushing for liquidity.


“Further support is also coming from falling yields, weaker dollar and geopolitical tensions between the U.S. and China. The safe-haven demand (for gold) has been rising while there is none for USD anymore.” The dollar fell to a near two-year low on increased bets the U.S. Federal Reserve could flag another accommodative policy shift when it meets this week, implying lower interest rates for longer. China seized the U.S. consulate in Chengdu, retaliating to the closure of its own consulate in Houston. Meanwhile, COVID-19 cases surged to over 16.13 million globally, driving expectations of more stimulus to stem the economic blow. “As long as the (virus) situation gets worse, the market is discounting more stimulus for a longer period of time and in bigger quantities,” said Edward Meir, analyst at ED&F Man Capital Markets.

Read more …

Brilliant. Evokes the image of a guy pointing a gun at your forehead saying: I’m here to make you happy.

The Independent today also runs a story entitled “Lockdown Took Away My Freedom But Set Me Free Spiritually”. Just so you know.

Wonder what this pays.

Lockdown Has Made The Nation Happier – Study (Ind.)

Lockdown helped to restore people’s happiness after national levels fell when the pandemic began, new research suggests. According to a study by Cambridge University’s Bennett Institute for Public Policy, the number of Britons self-reporting as “happy” halved in just three weeks at the start of lockdown. Using data taken from YouGov Weekly Mood Tracker surveys and Google searches, the researchers found that the number of people declaring themselves as “happy” went from 51 per cent just before the UK’s first Covid-19 fatality to 25 per cent by the time lockdown began on 23 March. However, once lockdown restrictions started to be lifted, these figures reversed, with happiness levels increasing back to close to what they were pre-pandemic, reaching 47 per cent by the end of May.


The study also identified a distinction between life satisfaction among social groups, with those in wealthy categories experiencing a decline while the most deprived groups reported a relative rise in life satisfaction. Dr Roberto Foa, from Cambridge’s Department of Politics and International Studies and director of the YouGov-Cambridge Centre for Public Opinion Research, commented: “It was the pandemic, not the lockdown, that depressed people’s wellbeing. “Mental health concerns are often cited as a reason to avoid lockdown. “In fact, when combined with employment and income support, lockdown may be the single most effective action a government can take during a pandemic to maintain psychological welfare.”

Read more …

And here’s 80,000 more and happier Vietnamese.

Vietnam Orders Evacuation Of 80,000 People After Three Test Positive (Ind.)

Vietnam has ordered the evacuation of 80,000 people from the coastal city of Danang after three residents there tested positive for coronavirus. The government said the evacuation would take four days and involve flights chartered to 11 different Vietnamese cities. Vietnam, which has been praised for its pandemic response after reporting just 400 cases and no deaths, went back on high alert at the weekend as it confirmed its first local infections since April, all in the popular tourism destination of Danang. An aggressive and widespread testing regime plus a strict quarantine had helped the South-East Asian nation almost eradicate Covid-19 within its borders, but the authorities are now grappling with its first internal infections for months. Although foreign tourists are still barred from entering the country, there has been a surge of domestic travel as the Vietnamese take advantage of discounted flights and hotel deals.


Anyone who had recently returned home from a break in Danang would be required to quarantine at home for 14 days, the health ministry has said. In addition, the prime minister Nguyen Xuan Phuc has also ordered police to step up a crackdown on illegal immigration. It is not clear if the new Danang cases are connected to people entering Vietnam secretly but Vietnamese state media said on Sunday police had arrested a Chinese man accused of running a gang which smuggled people into the country from China. On Monday, the government announced more than 1,500 people had been caught illegally crossing the border from China into Ha Giang province in Vietnam since May. Most of those caught were Vietnamese citizens and had been sent into quarantine.

Read more …

Probably true in many places.

Spain’s COVID19 Death Toll Could Be 60% Higher Than Reported – El Pais (RT)

Spain’s Covid-19 death toll could be off by 60 percent, according to calculations by the country’s leading newspaper, El Pais, which suggest Spain has the second-highest number of deaths in Europe after the UK. An El Pais investigation published on Sunday found that the official figure of 28,432 deaths is likely far less than the true number of people who have died with the virus. Spain’s official death toll only includes people who had a confirmed Covid-19 diagnosis, and not those who were suspected of having it but were never tested. El Pais looked at regional statistics on all suspected and confirmed deaths from the virus and concluded that 44,868 people died with Covid-19.


This figure is close to the number of excess deaths recorded by the National Epidemiology Centre and National Statistics Centre (INE) in June. It found that there were 43,945 more deaths between January and May 2020 than the previous year. The Spanish Association of Professionals and Funeral Services and the Carlos III Health Institute also calculated similar excess mortality figures during this time. If El Pais’ figures are accurate, it would mean that Spain has seen the second most deadly outbreak in Europe after the UK, which has recorded over 45,000 deaths. There was a lack of widespread testing carried at the beginning of the outbreak, which might explain the discrepancy with the official figures. At the end of May, the country lowered its death toll by 2,000 as a result of duplicate records and some regions reporting suspected cases as confirmed cases.

Read more …

All our money on one horse.

The $52 Trillion Bubble That Has “Hijacked China’s Economy”

More than three years ago, we explained why “the fate of the world economy is in the hands of China’s housing bubble.” As we said at the time, “China has always been a serial bubble inflator courtesy of a closed (capital account) economy, and nearly $30 trillion in bank deposits [$40 trillion as of July 2020] which slosh from one asset class to another, be it the stock market, bitcoin, commodities, farm animals or – most often – housing. ” Why is it so important for China to consistently reflate this bubble? The answer is simple: for China’s middle class there is no more important asset than housing: as Deutsche’s Zhiewi Zhang wrote in 2017 when discussing the macro and market consequences of the Chinese bubble, it is nothing more (or less) than “a massive wealth effect.”


Furthermore, unlike the US, which is hyperfinancialized and the bulk of household net worth is in financial assets (less than 30% is in real estate), in China it is the opposite, and roughly three-quarters of all household worth is in real estate. And since a global healthy economy starts with a growing, stable and inflating Chinese economy, unless China’s housing bubble is growing at a steady, measured pace created a “wealth effect” illusion among several hundred million middle-class Chinese, we concluded three years ago that the global economy is just as reliant on China’s housing market as it is on the global – and certainly US – stock market. Fast forward a little over three years, when China’s housing bubble is bigger than ever, and now the WSJ has picked up on what we said three years ago, namely that China’s epic housing market is perhaps the world’s most defining bubble, and more importantly, not even the covid pandemic did anything to threaten the sanctity of this bubble.

First, some context why China’s housing bubble currently eclipses the one in U.S. housing in the 2000s: “At the peak of the U.S. property boom, about $900 billion a year was being invested in residential real estate. In the 12 months ended in June, about $1.4 trillion was invested in Chinese housing. More was invested last month in Chinese real estate than any other month on record.” Some more statistics: “the total value of Chinese homes and developers’ inventory hit $52 trillion in 2019, according to Goldman Sachs, twice the size of the U.S. residential market and outstripping even the entire U.S. bond market.” China’s housing market is certainly bigger than the US stock market, and at its current growth rate will surpass the total value of all global stocks (which is currently about $85 trillion) in just a few years!

Read more …

He’ll be forever known as Fat Boris now.

Britain Unveils Plans To Tackle ‘Obesity Time Bomb’ (R.)

Britain unveiled plans to tackle an “obesity time bomb” on Monday, banning TV and online adverts for junk food before 9.00 p.m., ending “buy one get one free” deals on such foods and putting calories on menus.
Prime Minister Boris Johnson, who has lost weight since he was in intensive care with COVID-19, wants to tackle obesity after research showed those who are obese or overweight are at increased risk of death or severe illness from the coronavirus. Last month, he said Britain was fatter than most European countries apart from Malta and his government described “tackling the obesity time bomb” as a priority.

Ditching his earlier stance as a non-believer of “nannying” politics, his government is announcing a new drive to help people to “take control of their own future by losing weight, getting active and adopting a healthier lifestyle”. Alongside the ban on adverts before 9.00 p.m. (2000 GMT), on food deals and plans for the calorific content of meals to be displayed on menus, the government will also launch a consultation on displaying calories on alcohol. “Losing weight is hard but with some small changes we can all feel fitter and healthier,” Johnson said in a statement. “If we all do our bit, we can reduce our health risks and protect ourselves against coronavirus – as well as taking pressure off the NHS (National Health Service).”

With more than 60% of adults in Britain considered overweight or obese, according to Public Health England, the coronavirus crisis has put the obesity issue at the forefront of the government’s thinking, with a “Better Health” campaign being launched alongside the new measures.

Read more …

Thought experiment: imagine this happening in a French or German city. How do you think their governments would react?

Riots Are Driving Portland’s Small Businesses Under (RT)

After nearly 60 straight nights of violence, business owners in Portland are sick and tired of riots. But as their stores go under, the coastal media treats the rioters to glowing coverage and city authorities do nothing. Portland is a liberal stronghold, and as ‘Black Lives Matter’ protests fizzle out around the country, anger remains at boiling point in the Oregonian city. The protests there have not been all banner-waving and slogan-chanting affairs though. Instead, droves of ‘Antifa’ types have laid siege to the city’s Justice Center for almost two months, tearing down barricades, lobbing fireworks, setting fires and stabbing each other.

Most of those involved in the riots would probably say they’re fighting police brutality or fascism, or something of the sort, but besides those injured in that fight there are other victims of the unrest – local business owners have repeatedly complained about the riots to the local media. In articles published every few days, these store owners, barmen and restaurateurs describe how the riots have driven them to the brink of bankruptcy. One clothing store manager told Oregon Live on Saturday that within days of coronavirus restrictions being lifted, he reopened his family’s store, only to watch rioters trash the premises in late May, days after the killing of George Floyd kicked off the season of unrest.

[..] While local news tells tales of shuttered stores and bankrupt businesses, national media outlets describe the violence in Portland as a good v evil showdown between protesters and federal “stormtroopers.” As store owners told their stories to local media, the New York Times ran an article last week celebrating the “diverse elements” taking part in the protests. The “mothers in helmets,” and “anti-fascist activists” are “largely peaceful,” the paper wrote, describing how they have been “galvanized” by the “militarized” feds on the streets. The Washington Post was even more effusive in its praise, describing the feds’ use of tear gas as a “chemical weapon,” and honoring the moms, dads, teachers and healthcare workers who refuse to disperse and willingly stride into the choking fumes. The motives of the protesters – beyond vague demands for “racial justice” – are never explained, but the Post painted a truly heroic image of one man using a leaf blower to fire gas back at the agents.

Read more …

For now, the basement is winning. So why change?

Biden Campaign Declines ‘Fox News Sunday’ Interview (Fox)

During his interview with Chris Wallace last week, President Trump questioned whether the Democrats’ presumptive presidential nominee, Joe Biden, could handle the barrage of questioning that Wallace posed to Trump. The answer to that question – at least for now – we may never know. Wallace on Sunday informed viewers that the Biden campaign told Fox News he was “not available” for an interview. “In our interview last week with President Trump, he questioned whether his Democratic opponent, Joe Biden, could handle a similar encounter,” Wallace said. “This week, we asked the Biden campaign for an interview and they said the former vice president was not available.” He added, “We’ll keep asking every week.”


The Trump campaign has hit Biden for months for abstaining from holding rallies and news conferences while continuing to do interviews amid the coronavirus pandemic. While Biden recently has returned to the stump, Trump and his allies continued to mock the former vice president for “hiding” in his home in Delaware. Biden’s reticence to do public events, however, has done little to hurt his candidacy as the latest polls had Biden comfortably ahead of Trump both nationally and in key battleground states.

Read more …

Wondering how the MSM will cover future indictments, subpoenas etc. Those will come.

More Willful Blindness By The Media On Spying By Obama Administration (Turley)

The Washington press corps seems engaged in a collective demonstration of the legal concept of willful blindness, or deliberately ignoring the facts, following the release of yet another declassified document which directly refutes prior statements about the investigation into Russia collusion. The document shows that FBI officials used a national security briefing of then candidate Donald Trump and his top aides to gather possible evidence for Crossfire Hurricane, its code name for the Russia investigation. It is astonishing that the media refuses to see what is one of the biggest stories in decades. The Obama administration targeted the campaign of the opposing party based on false evidence.

The media covered Obama administration officials ridiculing the suggestions of spying on the Trump campaign and of improper conduct with the Russia investigation. When Attorney General William Barr told the Senate last year that he believed spying did occur, he was lambasted in the media, including by James Comey and others involved in that investigation. The mocking “wow” response of the fired FBI director received extensive coverage. The new document shows that, in summer 2016, FBI agent Joe Pientka briefed Trump campaign advisers Michael Flynn and Chris Christie over national security issues, standard practice ahead of the election. It had a discussion of Russian interference. But this was different.

The document detailing the questions asked by Trump and his aides and their reactions was filed several days after that meeting under Crossfire Hurricane and Crossfire Razor, the FBI investigation of Flynn. The two FBI officials listed who approved the report are Kevin Clinesmith and Peter Strzok. Clinesmith is the former FBI lawyer responsible for the FISA surveillance conducted on members of the Trump campaign. He opposed Trump and sent an email after the election declaring “viva the resistance.” He is now under review for possible criminal charges for altering a FISA court filing. The FBI used Trump adviser Carter Page as the basis for the original FISA application, due to his contacts with Russians. After that surveillance was approved, however, federal officials discredited the collusion allegations and noted that Page was a CIA asset. Clinesmith had allegedly changed the information to state that Page was not working for the CIA.

Strzok is the FBI agent whose violation of FBI rules led Justice Department officials to refer him for possible criminal charges. Strzok did not hide his intense loathing of Trump and famously referenced an “insurance policy” if Trump were to win the election. After FBI officials concluded there was no evidence of any crime by Flynn at the end of 2016, Strzok prevented the closing of the investigation as FBI officials searched for any crime that might be used to charge the incoming national security adviser. Documents show Comey briefed President Obama and Vice President Joe Biden on the investigation shortly before the inauguration of Trump.

Read more …

 

 

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Jul 252020
 


Dorothea Lange for the Resettlement Admin. On highway No. 1 of the ‘OK’ state, Muskogee County, Oklahoma. Seven children and eldest son’s family 1938

 

CDC: 35% of Non-Hospitalized COVID19 Patients Have Long-Term Illness (NBC)
Fauci: I Would Not Get On A Plane Or Eat Inside A Restaurant (MW)
Hunger, Lack of Vaccine Could Trigger New Migration Wave – Red Cross Chief (RT)
Supreme Court Rejects Church Challenge To Nevada COVID Restrictions (Solomon)
Judge Refuses Oregon Restraining Order Against Federal Law Enforcement (OPB)
Wave Of Evictions Could Be Coming For Nation’s Renters (Hill)
FAA Orders Emergency Inspections Of 2,000 Boeing 737s Post-Lockdown (USAT)
A Second Round Of $1,200 Stimulus Checks Could Be Coming (CNBC)
Recovery Fund Will Take EU Another Step Towards Disintegration (Varoufakis)
Media Should Be ‘Pressuring’ Biden To ‘Answer Questions’ – Howard Kurtz (Fox)
As US Debt Rises, Biden’s Spending Proposals Near $10 Trillion (JTN)
Charlamagne Tha God Slams Biden For Calling Trump First Racist President (NYP) /span>
WaPo Settles $250 Million Lawsuit With Covington Teen Nick Sandmann (ZH)
Meet the Steele Dossier’s ‘Primary Subsource’ (RCI)

 

 

Whaddaya know? New daily new case records for both the US and the world. The first million took three months, the latest million 5 days.

This will have to turn around at some point, and just maybe that won’t happen by itself any time soon.

4th day in a row with over 1,000 deaths in the US: same recipe. Turn it around.

 

 

 

 

 

 

 

 

 

 

Ben Hunt: “There is zero bending of the Covid curve in India. Zero. Within a few months, the Covid crisis in India will dwarf anything happening in the rest of world.”

 

 

Stay away from COVID.

CDC: 35% of Non-Hospitalized COVID19 Patients Have Long-Term Illness (NBC)

The Centers for Disease Control and Prevention acknowledged Friday that a significant number of COVID-19 patients do not recover quickly, and instead experience ongoing symptoms, such as fatigue and cough. As many as a third of patients who were never sick enough to be hospitalized are not back to their usual health up to three weeks after their diagnosis, the report found. “COVID-19 can result in prolonged illness even among persons with milder outpatient illness, including young adults,” the report’s authors wrote. The acknowledgement is welcome news to patients who call themselves “long-haulers” — suffering from debilitating symptoms weeks and even months after their initial infection.

“This report is monumental for all of us who have been struggling with fear of the unknown, lack of recognition and many times, a lack of belief and proper care from medical professionals during our prolonged recovery from COVID-19,” Kate Porter, who is on day 129 of her recovery, wrote in an email to NBC News. Porter, 35, of Beverly, Massachusetts, has had low-grade fevers, fatigue, rapid heart beat, shortness of breath and memory and sleep issues since her diagnosis March 17. “This gives me hope that we will gain access to more resources throughout our recovery and hopefully, get our lives back to what they once were,” Porter wrote.

The CDC report is based on telephone surveys of 274 COVID-19 patients. Ninety-five of those patients, or 35 percent, said they “had not returned to their usual state of health” when they were surveyed, which was at least two to three weeks after their first test. Many with long-term symptoms are otherwise young and healthy: Among those surveyed between ages 18 and 34, about 20 percent experienced lasting symptoms.

Read more …

“..his position on face masks changed when the evidence showed asymptomatic transmission..”

Yeah, and that was way too late. With an unknown pathogen, you don’t first wait for evidence, you go back to zero and do at least the obvious; wearing a mask is exactly that. Plus, if you first say there’s no need, you already lost most of your credibility when you state afterward that there is.

Fauci didn’t know any more than anyone else what went on in the beginning. But still everyone called on him. Recipe for disaster, because he wasn’t going to admit he didn’t have a clue.

Fauci: I Would Not Get On A Plane Or Eat Inside A Restaurant (MW)

If the speed and duration of the coronavirus pandemic is getting you down, spare a thought for Fauci. Are we there yet? How far are we on this journey through the pandemic? Near the finish line? Halfway? Or are we back where we started? “It’s a moving target,” he said. “I certainly don’t think we’re near the end of this if you look at what’s going on in the United States, that’s for sure.” [..] Fauci is consistently rated as the country’s most trusted voice on coronavirus. His dealing with the fire and passion of Kramer may have helped to give Fauci a tough skin to deal with the slings and arrows in recent weeks, particularly from the White House.

Fauci maintains that his position on face masks changed when the evidence showed asymptomatic transmission. He is eager to point out that millennials and young adults need to wear masks and practice social distancing too. [..] I presume you are not hanging out in restaurants or bars. Is it really more dangerous to eat indoors at a restaurant than outdoors? Fauci: Yes, absolutely. Indoors is much worse than outdoors. If you’re going to go to a restaurant, try as best as you can to have outdoor seating that is properly spaced between the tables. MarketWatch: So you’re not going to restaurants? You wouldn’t risk it? Fauci: I am not going to restaurants right now.

[..] Do you have any estimate on how less likely people are to transmit coronavirus if they’re wearing a mask: 50%? 99%? Or…? Fauci: We don’t know exactly. There have been a number of meta analyses. One published in The Lancet on June 1, 2020 said masks and respirators reduced the risk of infection by anywhere from 78% to 85%. Your guess is as good as any: 50% to 75% or 80% is probably correct.

Read more …

Open borders?!

Hunger, Lack of Vaccine Could Trigger New Migration Wave – Red Cross Chief (RT)

Once borders are unsealed, a massive amount of people will set out for the wealthiest nations, fleeing Covid-related poverty, the Red Cross chief said. Migrants will also be driven by the search for a working vaccine.
Jagan Chapagain, the head of the International Federation of Red Cross and Red Crescent Societies (IFRC), made the grim prediction in a candid comment to AFP this Thursday. Lockdowns and border closures enforced in most parts of the world are already driving people beyond the edge of poverty. Desperation forces them to choose between exposure to Covid-19 and the risk of going hungry, Chapagain explained.

What we hear is that many people who are losing livelihoods, once the borders start opening, will feel compelled to move. It should not be a surprise if “a massive impact on migration” occurs in the years or even months to come. However, the potential migration crisis could be averted or eased if these grievances are tackled before migrants leave their home countries, the IFRC chief said, offering one bold economic argument to back up his point. “The cost of supporting the migrants, during the transit and of course when they reach the country of destination, is much more than supporting people in their livelihoods, education, health needs in their own country,” he said. European leaders made similar arguments in the wake of the major migrant influx that hit the continent in 2015 and 2016.

Germany, the prime destination for asylum seekers, pledged millions for reconstruction programs across the Middle East and North Africa. Another driving factor beyond the looming migration wave is also directly related to the pandemic, which has infected over 15.5 million and killed more than 633,000 people worldwide. Potential migrants could feel that their chances of survival are better “on the other side of the sea,” Chapagain said without indicating any particular destination. People will base their decision to move on “the availability of [Covid-19] vaccines.” “If people see that the vaccine is say, for example, available in Europe but not in Africa, what happens?” He also took a swipe at countries expected to keep reserves of promising vaccines for themselves first.

Read more …

“..In Nevada, it seems, it is better to be in entertainment than religion. ..”

Supreme Court Rejects Church Challenge To Nevada COVID Restrictions (Solomon)

The Supreme Court on Friday rejected a Christian church’s plea to ease Nevada’s COVID-19 restrictions and allow additional worshipers at Sunday services in a ruling that showcased a sharp divide among the justices. “The application for injunctive relief presented to JUSTICE KAGAN and by her referred to the Court is denied,” the court ruled without further explanation in rejecting an appeal by Calvary Chapel Dayton Valley. At issue was a Nevada rule that limited church services to 50 people – regardless of the size of the church building — while allowing other commercial entities like casinos and theaters to have customers up to 50 percent of their building capacity.


Four conservative justices — Samuel Alito, Clarence Thomas, Brett Kavanaugh and Neil Gorsuch — strongly dissented, arguing the differing standards created unequal protection under the law. “This is a simple case. Under the Governor’s edict, a 10-screen ‘multiplex’ may host 500 moviegoers at any time,” Gorsuch wrote. “….In Nevada, it seems, it is better to be in entertainment than religion. Maybe that is nothing new. But the First Amendment prohibits such obvious discrimination against the exercise of religion.” The Trump White House weighed in by siding with the justices, with chief of staff Mark Meadows tweeting “It’s a sad day for our country when the high court supports casinos and not churches. This Supreme Court ruling would be a supreme disappointment to our founding fathers.”

Read more …

Guess this will up in the Supreme Court as well.

Judge Refuses Oregon Restraining Order Against Federal Law Enforcement (OPB)

U.S. District Court Judge Michael Mosman rejected an effort by Oregon’s attorney general to restrict federal law enforcement agencies as they police protests in downtown Portland. Oregon asked a judge to make federal officers identify themselves and their agency before arresting or detaining a person and to prohibit arrests that lack probable cause. In his 14-page ruling, Mosman said the state lacked standing to bring the case, in part because Attorney General Ellen Rosenblum failed to show the interests of the state of Oregon itself had been harmed. “In the first place, although it involves allegations of harm done to protesters by law enforcement, no protester is a plaintiff here,” Mosman stated in his written order.


“In the second place, it is not seeking redress for any harm that has been done to protesters. Instead, it seeks an injunction against future conduct, which is also an extraordinary form of relief.” In a statement, Rosenblum said she was disappointed in Mosman’s decision, noting that her goal was to ensure people’s rights are protected. “While I respect Judge Mosman, I would ask this question: If the state of Oregon does not have standing to prevent this unconstitutional conduct by unidentified federal agents running roughshod over her citizens, who does?” Rosenblum asked. “Individuals mistreated by these federal agents can sue for damages, but they can’t get a judge to restrain this unlawful conduct more generally. Today’s ruling suggests that there may be no recourse on behalf of our state, and if so that is extremely troubling.”

Read more …

Renters AND mortgagees.

Meanwhile, protections against evictions are as scattered and confusing from state to state as the various COVID measures are.

Wave Of Evictions Could Be Coming For Nation’s Renters (Hill)

The federal moratorium on evictions signed into law in March as part of the CARES Act is set to expire Friday night at midnight, setting up the potential for a wave of evictions in the middle of a pandemic that President Trump acknowledged this week will get worse before it gets better. It’s possible that the moratorium will be extended as part of a new relief bill, but Congress is mired in negotiations and is not expected to finalize legislation until early August. Some Democrats are sounding the alarm. “Communities across this country need eviction protections and housing assistance in order to avert mass evictions and homelessness,” said Congressman Jesus “Chuy” Garcia (D-Ill.).

“If we fail to act, recovery from the coronavirus pandemic and the looming economic crisis will be impossible.” The most recent survey by the U.S. Census showed that 23.7 million Americans had little or no confidence in their ability to pay the coming month’s rent, accounting for a third of all renters. Over half that number already reported not paying their most recent month’s rent. Not everyone facing eviction has been protected by the federal moratorium. It only applied to people renting from units with federal mortgages, which accounts for just over a quarter of all rental units, according to an analysis from the Urban Institute.

Other renters have been protected by broader eviction moratoria issued at the state and local level, but some of those have already expired. In June, the Federal Housing Administration (FHA) announced that it is extending its foreclosure and eviction moratorium through August 31 for those with federally-insured single-family mortgages. “You just sort of have a patchwork across the country,” said Samantha Batko, senior research associate at the Urban Institute. But for those whose sole protection has come from the federal moratorium, a number which could amount to millions of renters, Saturday could start with a demand for months of delayed rent, or an eviction notice.

Read more …

2,000 planes a-rusting, and a partridge in a pear tree.

FAA Orders Emergency Inspections Of 2,000 Boeing 737s Post-Lockdown (USAT)

Airlines face another headache from the coronavirus pandemic: potentially dangerous corrosion on planes that have been in storage since travel demand evaporated five months ago. The Federal Aviation Administration on Friday issued an emergency Airworthiness Directive (AD) for 2,000 Boeing 737s that have been parked. The FAA issued the directive after inspectors found compromised air check valves when bringing the aircraft out of storage, agency spokesman Lynn Lunsford said. Corrosion on the “fifth stage bleed air check valve” could result in dual-engine failure, he said. Airlines must inspect the planes for valve corrosion, and if it is found, they must be replaced before the plane is returned to service, he said.

The FAA took the action after four recent reports of single-engine shutdowns due to check valves being stuck open, according to the Airworthiness Directive. It did not detail the incidents or name the airlines operating them. “If this valve opens normally at takeoff power, it may become stuck in the open position during flight and fail to close when power is reduced at top of descent, resulting in an unrecoverable compressor stall and the inability to restart the engine,” the agency said. “Corrosion of these valves on both engines could result in a dual-engine power loss without the ability to restart.”

[..] Boeing spokesman Peter Pedraza issued this statement in response to the FAA directive: “Out of an abundance of caution, Boeing has advised operators of 737 Classic airplanes (series -300 to -500) and Next-Generation 737s (series -600 to -900) to inspect an engine valve for corrosion,” the statement said. “With airplanes being stored or used infrequently due to lower demand during the COVID-19 pandemic, the valve can be more susceptible to corrosion. Boeing is providing inspection and replacement information to fleet owners if they find an issue.” The directive does not include the Boeing 737 Max, which has been grounded since March 2019 following two fatal crashes in less than six months.

Read more …

But Goldman expects it to be cut by 50%?! And Pelosi doesn’t want it, she wants something much bigger that will take much longer to pass?

A Second Round Of $1,200 Stimulus Checks Could Be Coming (CNBC)

Congress won’t move on the next round of stimulus legislation this week. Despite that, however, a second set of stimulus checks is still on the table. Draft legislation released by Senate Republicans states, “These will be included, but the amount of the payment and eligibility are TBA [to be announced].” Treasury Secretary Steven Mnuchin said this week that the size and scope of the payments will likely be the same as the first round. That is subject to change as negotiations with Democrats ensue. Those checks were up to $1,200 per individual or $2,400 per married couple, plus $500 for dependents under 17. Eligibility was based on income. Those earning up to $75,000 per individual, or $150,000 per married couple filing jointly, received the full amount.


Those who made more than that received reduced payments. Individuals who make more than $99,000 and married couples with over $198,000 in income were not eligible for the money. A second set of payments would be a concession for some Republicans, who are reluctant to send more money. Senate Majority Leader Mitch McConnell, R-Ky., previously suggested lowering the income threshold to those making $40,000 or less. The stimulus checks are part of President Donald Trump’s plan to get relief help to Americans quickly, Mnuchin said in a Thursday CNBC interview. While the president still likes the idea of a payroll tax cut, more direct payments would get money to people sooner, Mnuchin said. “The President’s preference is to make sure that we send out direct payments quickly so that in August, people get more money,” Mnuchin said.

Read more …

“..the whole continent will be treated to an intensification of the doom loop between austerity and recession…”

Recovery Fund Will Take EU Another Step Towards Disintegration (Varoufakis)

First, the recovery fund is a distraction from the elephant in the room: massive austerity. According to the IMF, the eurozone’s total 2020 income will fall by 10%, causing an average budget deficit of more than 11%, with weaker countries such as Italy and Greece facing a much larger drop. That would not be catastrophic per se, if it were not for the determination of Berlin and other governments to push member states to balance their books by 2021 (as witnessed by the 11 June Eurogroup communique). Even if the nascent recovery brings down, for example, Italy’s budget deficit to, say, 9%, to balance its books Rome must impose a cruel level of austerity equal to a new 9% of GDP in cuts and taxes. Similarly with Greece. Given that even Germany will have to practise austerity to balance its budget, the whole continent will be treated to an intensification of the doom loop between austerity and recession.

Second, the recovery fund is (macroeconomically) puny. For it to defend the union, it should pack a fiscal boost comparable in magnitude to the austerity tsunami down the line. It does not. Take Italy and Greece again, countries that must face down immense austerity. How much of this shock can the recovery fund monies help absorb? Not a lot, is the answer. To arrive at a precise answer, we must first ignore the new loans on offer from the recovery fund (since new debt has never helped the insolvent) and concentrate exclusively on net grants. Italy has been allocated around €80bn and Greece €23bn. However, every member state must take on part of the new €750bn EU debt. Italy, for example, is liable for just under 13% of this debt while poorer Greece is liable for 1.4%. Once we subtract these new debts, Italy’s and Greece’s net grants come to just over €30bn and €12bn respectively – or 0.6% and 2% of GDP on an annual basis between 2021 and 2023. Compared to the prospect of austerity equivalent to 9% of GDP, which will be required to balance their budgets, these are puny sums.

Third, the political conditions under which the funds will flow are a Eurosceptic’s dream. When a recession hits the UK, the government’s budget deficit rises automatically as benefits flow disproportionately towards the most affected regions. The beauty of such a proper fiscal union is that no politician can decide which region gets which transfer. Imagine the sheer awfulness if parliament had to debate how much would be transferred to Cumbria, to Norfolk or to north Wales from Surrey, Sussex and west London. Britain would be wrecked by divisions that make Brexit look like an amicable affair. And yet this divisiveness has been baked into the EU recovery fund, complete with country allocations drawn up even before we know the effects of the recession on each region. It is almost as if the whole thing were designed by a cunning Eurosceptic.

As if that were not enough, our great and good leaders also decided that each national government will have the right to freeze payments, for up to three months, to any other government while it scrutinises how the money is to be spent. Endless recriminations are guaranteed, as the Dutch lambast the Italian government’s pension payments and Rome returns the favour with reports on the Netherlands’ famous tax loopholes. Imagine the mood in the room when such a challenge is made to, say, Spain, by a prime minister whose government the EU bribed, in the form of Thatcher-like rebates, to get the recovery fund across the line.

Read more …

Not going to happen. The media are running his campaign.

Media Should Be ‘Pressuring’ Biden To ‘Answer Questions’ – Howard Kurtz (Fox)

Fox News media analyst Howard Kurtz called on the press to pressure presumptive Democratic presidential nominee Joe Biden to “answer questions,” saying it’s his responsibility as a candidate and that “playing it safe” could backfire. “Many Democrats seem convinced that while it’s a great strategy for [Biden] not to talk to the press, the press, by the way, should be pressuring the former vice president to answer questions because that’s part of the responsibility of a presidential candidate,” Kurtz said on “Bill Hemmer Reports.” Kurtz advised Biden not to commit to the strategy, saying that while many criticize President Trump, he is taking questions. He noted that Biden may reconsider it if his polling takes a hit.

“Look, not just as a journalist, but as an American, I think that Biden shouldn’t adopt this posture, that I’m just going to do the canned speeches, teleprompter speeches, so forth,” Kurtz said. “President Trump, like him or don’t like him, he is out there doing interviews, talking to reporters. He’s got the daily briefings now all the time. Joe Biden is not doing that.” The media analyst also commented on Biden’s release of a socially distanced conversation with former President Barack Obama where they ripped Trump for his response to the coronavirus pandemic. “The Obama card is, in fact, the strongest card that Joe Biden has to play,” Kurtz said. “And the reason he’s playing it now is that President Trump has been ramping up his attacks against the former V.P. and in a virtual campaign, Biden wants to connect with Obama’s 120 million Twitter followers.

Joe is kind of a dot on social media. So he had been sitting on his lead with the stay at home strategy until now.” Kurtz speculated that using Obama’s legacy could backfire on the candidate. “Using Barack Obama, Bill, as a character witness is a double edged sword, because as we saw from that White House pushback, President Trump would love nothing more than to run against the Obama administration’s record on policing, on immigration and other issues,” Kurtz said. “And it could change the contest from what is now, quite frankly, a referendum on Donald Trump, who dominates the media spotlight to a future versus past comparison. You know, do you really want to go back to the old days?”

Read more …

Let it roll. Who’s paying attention anymore?

As US Debt Rises, Biden’s Spending Proposals Near $10 Trillion (JTN)

Democratic presidential candidate Joe Biden’s spending proposals are nearing $10 trillion, even as U.S. debt continues to rise amid new coronavirus spending. In the past month alone, Biden has proposed nearly $3.48 trillion in new taxes and spending. Biden’s new childcare and eldercare proposal released Tuesday calls for $775 billion in taxes and new government spending. The Biden campaign’s energy plan released last week will cost taxpayers $2 trillion. “Biden will make a $2 trillion accelerated investment, with a plan to deploy those resources over his first term, setting us on an irreversible course to meet the ambitious climate progress that science demands,” stated the Biden campaign’s website. During a speech in Pennsylvania earlier this month, Biden also promised a $700-billion “buy American” manufacturing plan.


Adding the $3.48 trillion in spending proposed in the past month to the more than $6 trillion Biden had already proposed, brings Biden’s total proposed costs to almost $10 trillion. An analysis by the Committee for a Responsible Federal Budget estimated that Biden’s healthcare plan has a gross cost of $2.25 trillion and would add a net $800 billion after offsets to deficits over ten years. Biden has vowed to raise taxes by $4 trillion, according to an analysis by the nonpartisan Tax Policy Center. Biden’s proposed $4 trillion in new taxes more than doubles the $1.4 trillion that Hillary Clinton proposed in 2016, according to a 2016 analysis by the Tax Policy Center, which is a joint venture of the left-leaning Urban Institute and Brookings Institution.

Read more …

“How the hell can Donald Trump be the first racist president in a country where 12 presidents before him owned slaves?”

Easy, because that’s what you get when you let white people speak for black people. The whole movement’s been hijacked, and we’re going to pretend we don’t know that?

Charlamagne Tha God Slams Biden For Calling Trump First Racist President (NYP)

The presumptive Democratic nominee made the comment during a virtual town hall Wednesday in response to concerns voiced by a health care worker about the president referring to the coronavirus pandemic as the “China virus.” “The way he deals with people based on the color of their skin, their national origin, where they’re from, is absolutely sickening,” the former veep said. “No sitting president has ever done this. Never, never, never. No Republican president has done this. No Democratic president. We’ve had racists, and they’ve existed, they’ve tried to get elected president. He’s the first one that has,” Biden added.

Charlamagne, co-host of “The Breakfast Club,” reacted to Biden’s characterization by declaring him Thursday’s “Donkey of the Day,” Fox News reported. “I really wish Joe Biden would shut the f–k up forever and continue to act like he’s starring in the movie ‘A Quiet Place’ because as soon as he opens his mouth and makes noise, he gets us all killed, OK?” he said. Charlamagne also accused Biden of “revisionist history,” describing his claim about the commander-in-chief as “a lie” that “relinquishes America of all responsibility of its bigotry.” “How are we ever going to atone for America’s original sins if we don’t acknowledge them?” he said. “How the hell can Donald Trump be the first racist president in a country where 12 presidents before him owned slaves?”

“Joe, you got to hurry up and announce your black woman VP so I can be enthused about voting for her because I will never be enthused about voting for you, and you know America is a terrible place when Kanye West seems like a viable option,” Charlamagne added. Charlamagne made headlines during his recent interview with Biden, who suggested that African American voters “ain’t black” if they were still considering voting for Trump in November. Biden walked back his remarks later.

Read more …

Distorting reality to go after a 17-year old kid is pretty low. But he’s not defenseless. In fact, he could be very rich when all is said and done.

Why was he targeted? Because he wore a MAGA hat. With WaPo and CNN having forked over, ABC, CBS, The Guardian, The Hill and NBC Universal well have to as well. Good.

WaPo Settles $250 Million Lawsuit With Covington Teen Nick Sandmann (ZH)

The Washington Post has settled a $250 million defamation lawsuit filed by Covington Catholic High School student Nick Sandmann for an undisclosed amount, after the teen claimed the left-leaning news outlet ‘led the hate campaign’ against him following a racially charged January, 2019 incident at the March for Life Rally at the Lincoln Memorial. Sandmann was viciously attacked by left-leaning news outlets over a deceptively edited video clip from the incident, in which the teenager, seen wearing a MAGA hat, appeared to be mocking a Native American man beating a drum (a known political grifter who lied about the incident, and stole valor). The following day, a longer version of the video revealed that Sandmann did absolutely nothing wrong – as the Native American, Nathan Phillips, aggressively approached Sandmann and beat a drum in his face.


In a tweet on his 18th birthday, Sandmann wrote “On 2/19/19, I filed $250M defamation lawsuit against Washington Post. Today, I turned 18 & WaPo settled my lawsuit.”

Sandmann is also suing ABC, CBS, The Guardian, The Hill and NBC Universal.

Read more …

Please read the whole thing. This story is getting wilder by the day. Remember Fiona Hill? Well, she’s front and center in the whole scheme.

Meet the Steele Dossier’s ‘Primary Subsource’ (RCI)

The mysterious “Primary Subsource” that Christopher Steele has long hidden behind to defend his discredited Trump-Russia dossier is a former Brookings Institution analyst — Igor “Iggy” Danchenko, a Russian national whose past includes criminal convictions and other personal baggage ignored by the FBI in vetting him and the information he fed to Steele, according to congressional sources and records obtained by RealClearInvestigations. Agents continued to use the dossier as grounds to investigate President Trump and put his advisers under counter-espionage surveillance.

The 42-year-old Danchenko, who was hired by Steele in 2016 to deploy a network of sources to dig up dirt on Trump and Russia for the Hillary Clinton campaign, was arrested, jailed and convicted years earlier on multiple public drunkenness and disorderly conduct charges in the Washington area and ordered to undergo substance-abuse and mental-health counseling, according to criminal records. In an odd twist, a 2013 federal case against Danchenko was prosecuted by then-U.S Attorney Rod Rosenstein, who ended up signing one of the FBI’s dossier-based wiretap warrants as deputy attorney general in 2017.

Danchenko first ran into trouble with the law as he began working for Brookings — the preeminent Democratic think tank in Washington — where he struck up a friendship with Fiona Hill, the White House adviser who testified against Trump during last year’s impeachment hearings. Danchenko has described Hill as a mentor, while Hill has sung his praises as a “creative” researcher. Hill is also close to his boss Steele, who she’d known since 2006. She met with the former British intelligence officer during the 2016 campaign and later received a raw, unpublished copy of the now-debunked dossier.

It does not appear the FBI asked Danchenko about his criminal past or state of sobriety when agents interviewed him in January 2017 in a failed attempt to verify the accuracy of the dossier, which the bureau did only after agents used it to obtain a warrant to surveil Trump campaign adviser Carter Page. The opposition research was farmed out by Steele, working for Clinton’s campaign, to Danchenko, who was paid for the information he provided. A newly declassified FBI summary of the FBI-Danchenko meeting reveals agents learned that key allegations in the dossier, which claimed Trump engaged in a “well-developed conspiracy of cooperation” with the Kremlin against Clinton, were largely inspired by gossip and bar talk among Danchenko and his drinking buddies, most of whom were childhood friends from Russia.

The FBI memo is heavily redacted and blacks out the name of Steele’s Primary Subsource. But public records and congressional sources, who spoke on condition of anonymity, confirm the identity of the source as Danchenko. In the memo, the FBI notes that Danchenko said that he and one of his dossier sources “drink heavily together.” But there is no apparent indication the FBI followed up by asking Danchenko if he had an alcohol problem, which would cast further doubt on his reliability as a source for one of the most important and sensitive investigations in FBI history.

Read more …

 

 

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Apr 242020
 


Banksy Girl With a Pierced Eardrum (and face mask) 2020

 

Americans Prioritize Staying Home, Worry Restrictions Will Lift Too Fast (CBS)
Doctors Rethink Rush To Ventilate (R.)
First Known US COVID19 Death Occurred On Feb. 6 In Santa Clara County (SFC)
Chinese Scientists ‘Unable To Judge’ If US Lab Is Virus Source (Global Times)
House Passes $484 Billion Coronavirus Relief Package (Hill)
Fed Balance Sheet Increases To Record $6.62 Trillion (R.)
No, Trump Did Not Put A Labradoodle Breeder In Charge Of Covid19 Response (DN)
Lawmaker Who Thanked Trump To Face Censure Vote From Michigan Democrats (JTN)
News Outlets Have Received Millions In Forgivable Stimulus Loans (JTN)
Ousted US Health Official To File Whistleblower Complaint (R.)
WTO Report Says 80 Countries Limiting Exports Of Face Masks, Other Gear (R.)
Biden Campaign’s Outside Economic Advisers Include Larry Summers (R.)
Steele Testified Emails Were Wiped, No Docs Related To Primary Source (DC)
Insect Numbers Down 25% Since 1990 (G.)
Banksy’s ‘Girl with a Pierced Eardrum’ Gains A Coronavirus Face Mask (R.)

 

 

• US records 3,176 #coronavirus deaths in 24 hours – total fatalities near 50,000: Johns Hopkins tally

• The US has 866,646 confirmed cases, up 26,971 from the previous day

 

 

Yaneer Bar-Yam
@yaneerbaryam

• Our Getting to Zero list:
Yesterday new cases:
South Korea +11
Greece +7
Iceland +7
Estonia +7
Australia +4
Hong Kong +4
New Zealand +3
Jordan +2
Taiwan +1
Vietnam 0

 

 

 

Cases 2,745,469 (+ 89,078 from yesterday’s 2,656,391)

Deaths 191,791 (+ 6,635 from yesterday’s 185,156 )

 

 

 

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

 

 

From Worldometer – NOTE: among Active Cases, Serious or Critical fell to 3%. Among Closed Cases, Deaths have fallen to 20%

 

 

From SCMP:

 

 

From COVID19Info.live: Note: Turkey, Russia, UK are the biggest risers

 

 

 

 

Or maybe it’s simply too soon?

Americans Prioritize Staying Home, Worry Restrictions Will Lift Too Fast (CBS)

Health concerns still take precedence over economic concerns by a wide margin for Americans in their views on when to reopen the economy — both in what they want for the nation, and in what they’d do themselves. Many say they need to be confident the coronavirus outbreak is over before returning to public places, and big majorities of all partisans agree the stay-at-home orders are effective. The health concerns may be so salient that even for those whose finances have been impacted and even for those concerned about job loss, most of them still worry the country will open up too fast. 63% of Americans are more worried about restrictions lifting too fast and worsening the outbreak — than worry about lifting restrictions too slowly and worsening the economy.

And what would Americans actually do if restrictions were lifted right now? Would anyone show up to public places or would they be too worried about health risks? That could be the most important factor in the economy. Only 13% say they would definitely return to public places over the next few weeks if restrictions were lifted right now, regardless of what else happened with the outbreak. Almost half — 48% — say they would not return to public places until they were confident the outbreak was over. Another 39% are “maybes”: they’d return depending on whether they saw the outbreak getting better. These views are not decidedly partisan: most Republicans are “maybes” at best, as are most Democrats and independents.

Small numbers for specific things:
• Only 13% would be comfortable going to a large sports or entertainment event.
• Only 15% would be comfortable getting on an airplane.
• 29% would be comfortable going to restaurants or bars.

Read more …

Just a few lines from a long Reuters piece, which leaves you realizing there are as many doctors and studies as there are opinions. And when you read that in some cases 90% of people put on ventilators die, it’s obvious some people got some things pretty wrong.

Doctors Rethink Rush To Ventilate (R.)

Luciano Gattinoni, a guest professor at the Department of Anaesthesiology, Emergency and Intensive Care Medicine, University of Göttingen in Germany, and a renowned expert in ventilators, was one of the first to raise questions about how they should be used to treat COVID-19. “I realised as soon as I saw the first CT scan … that this had nothing to do with what we had seen and done for the past 40 years,” he told Reuters. In a paper published by the American Thoracic Society on March 30, Gattinoni and other Italian doctors wrote that COVID-19 does not lead to “typical” respiratory problems. Patients’ lungs were working better than they would expect for ARDS, they wrote – they were more elastic. So, he said, mechanical ventilation should be given “with a lower pressure than the one we are used to.”

Ventilating some COVID-19 sufferers as if they were standard patients with ARDS is not appropriate, he told Reuters. “It’s like using a Ferrari to go to the shop next door, you press on the accelerator and you smash the window.” The Italians were swiftly followed by Cameron Kyle-Sidell, a New York physician who put out a talk on YouTube saying that by preparing to put patients on ventilators, hospitals in America were treating “the wrong disease.” Ventilation, he feared, would lead to “a tremendous amount of harm to a great number of people in a very short time.” This remains his view, he told Reuters this week. When Spain’s outbreak erupted in mid-March, many patients went straight onto ventilators because lung X-rays and other test results “scared us,” said Delia Torres, a physician at the Hospital General Universitario de Alicante.

They now focus more on breathing and a patient’s overall condition than just X-rays and tests. And they intubate less. “If the patient can get better without it, then there’s no need,” she said. In Germany, lung specialist Voshaar was also concerned. A mechanical ventilator itself can damage the lungs, he says. This means patients stay in intensive care longer, blocking specialist beds and creating a vicious circle in which ever more ventilators are needed. Of the 36 acute COVID-19 patients on his ward in mid-April, Voshaar said, one had been intubated – a man with a serious neuro-muscular disorder – and he was the only patient to die. Another 31 had recovered.

Read more …

The virus was in the US in January.

First Known US COVID19 Death Occurred On Feb. 6 In Santa Clara County (SFC)

A person who died at home in Santa Clara County on Feb. 6 was infected with the coronavirus at the time of death, a stunning discovery that makes that individual the first recorded COVID-19 fatality in the United States, according to autopsy results released by public health officials late Tuesday. That death — three weeks before the first fatality was reported in the U.S., in Washington state on Feb. 28 — adds to increasing evidence that the virus was in the country far earlier than once thought. Santa Clara County on Tuesday announced three previously unidentified deaths from the coronavirus: the Feb. 6 case; one on Feb. 17, which also predates the death that was earlier believed to be the first; and one on March 6. Initially, the first death in the county had been reported March 9.

“What it means is we had coronavirus circulating in the community much earlier than we had documented and much earlier than we had thought,” said Dr. Sara Cody, Santa Clara County’s public health officer. “Those deaths probably represent many, many more infections. And so there had to be chains of transmission that go back much earlier.” Cody did not provide details about the people who died in February but said the deaths “tell us we had community transmission – probably significant community transmission – far before we realized it and documented it.” “From what we understand, neither of the cases had a history of travel,” Cody said. “So we assume that they were acquired locally.”

People typically die of COVID-19 about a month after they are infected with the coronavirus, suggesting that the person who died Feb. 6 likely was infected in early January. At that time, the virus had been reported only in China — the U.S. Centers for Disease Control and Prevention had not yet issued any advisories to Americans about the potential threat.

Read more …

Predictably, Chinese state media strike back. What caught my eye is:

“..infected more than 2.6 million Americans with nearly 20,000 deaths as of 4:30 pm Thursday.”

Worldometer, as I write this, says 886,000 infections and 50,000 deaths.

Chinese Scientists ‘Unable To Judge’ If US Lab Is Virus Source (Global Times)

Responding to viral reports alleging that the novel coronavirus was leaked from a US military biochemical laboratory, Chinese scientists said that they could not make a judgment on the allegation, as the US had not given any public response on the issue. Shi Yi, a research fellow from the Institute of Microbiology, Chinese Academy of Sciences, made the remarks at a press conference Thursday, noting that the origin of the virus is a scientific issue requiring a long period of research and involves a great deal of uncertainty. The remarks came amid circulating reports alleging that the Fort Detrick laboratory, which handles high-level disease-causing materials such as Ebola, in Fredrick, Maryland, may be the origin of the deadly novel coronavirus, which has infected more than 2.6 million Americans with nearly 20,000 deaths as of 4:30 pm Thursday.


The lab was ordered to shut down in July 2019, reportedly for multiple causes, including failure to follow local procedures and a lack of periodic recertification training for workers in the biocontainment laboratories. Some other posts on social media platforms also alleged that a US armed diplomatic driver and cyclist who was in Wuhan in October 2019 for the cycling competition in the Military World Games, could be patient zero for COVID-19 in Wuhan. Netizens from both China and the US have called on the US government to respond to public concerns over the above mentioned issues. Some have even launched a petition on the White House website, but the US government has not made any comment so far.

Read more …

The US political system is inherently incapable of getting this right. Not going to happen.

House Passes $484 Billion Coronavirus Relief Package (Hill)

The House on Thursday voted overwhelmingly to pass legislation providing roughly $484 billion in coronavirus relief for small businesses, hospitals and expanded medical testing, capping weeks of contentious negotiations that had stalled Washington’s latest round of emergency aid. The vote was 388-5-1, with four conservative Republicans breaking with GOP leaders to oppose the measure, citing its effect on federal deficit. Rep. Alexandria Ocasio-Cortez (D-N.Y.) also voted against the measure, while Rep. Justin Amash (I-Mich.) voted present. The four Republicans who voted “no” were House Freedom Caucus Chairman Andy Biggs (Ariz.) and Reps. Ken Buck (Colo.), Jody Hice (Ga.) and Thomas Massie (Ky.).


The legislation, which the Senate passed unanimously on Tuesday, now goes to the desk of President Trump, who has promised to sign it quickly into law. The massive package is the fourth coronavirus bill to move through Congress over the last seven weeks, and brings the federal response to the global pandemic up to a whopping $2.8 trillion — by far the largest emergency relief effort in modern U.S. history. It came after two weeks of tense talks between the White House, led by Treasury Secretary Steven Mnuchin and the top Democrats in both chambers, Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles Schumer (D-N.Y.), over the scope and direction of the latest infusion of emergency funds.

Read more …

By now fully meaningless numbers for 99% of the population.

Fed Balance Sheet Increases To Record $6.62 Trillion (R.)

The Federal Reserve’s balance sheet increased to a record $6.62 trillion this week as the central bank used its nearly unlimited buying power to soak up assets to keep markets functioning amid an abrupt economic free fall due to the coronavirus pandemic. Since early March, the Fed has slashed interest rates to zero, restarted bond purchases and rolled out an unprecedented range of programs to keep credit flowing and shore up business and household confidence. The central bank’s balance sheet as of Wednesday rose about $200 billion from $6.42 trillion a week earlier. That is up from just $4.29 trillion in the first week of March. It is now the equivalent of roughly 30% of the size of the U.S. economy before the crisis struck, and will certainly grow larger in the weeks ahead as the Fed keeps piling on assets and the economy shrinks.


The central bank continued to snap up Treasury securities, mortgage bonds and other assets, according to data released on Thursday. The Fed’s holdings of mortgage-backed securities rose to $1.62 trillion from $1.57 trillion. Treasury holdings rose to $3.91 trillion from $3.79 trillion. Use of the Fed’s central bank liquidity swap lines, which allow foreign central banks to exchange their local currencies for dollars, rose to $409.7 billion on Wednesday from $378.3 billion the previous week. Loan balances for the Fed’s discount window, its last-resort lending program for banks, fell to $33.7 billion from $36.3 billion a week ago.

Read more …

Worked for CNN though. They need new stories every day, or people will switch off.

No, Trump Did Not Put A Labradoodle Breeder In Charge Of Covid19 Response (DN)

No, the Trump administration did not put a professional dog breeder from Dallas in charge of COVID-19 response. Yes, the chief of staff at the Department of Health and Human Services briefly owned a family business raising Labradoodles. But he’s also served three administrations in high level posts at HHS, the White House and the Pentagon. Colleagues who hired Harrison and served with him in government were appalled to see him disparaged Thursday as a mere “dog breeder,” as if Joe Exotic had catapulted from tiger king to head of the Centers for Disease Control and Prevention.


“This is so silly. He went home and worked in a family business,” said Jack Kalavritinos, who served with Harrison at HHS during the administrations of both George W. Bush and President Donald Trump, most recently as director for intergovernmental and external affairs, working on the opioid crisis and drug prices. “Brian was a no-brainer pick,” said another colleague, Michael Reilly, who hired Harrison for his first job at HHS under Bush. “His private sector experience is irrelevant.…He was a complete known commodity who had extensive experience.” Trump’s irritation with Harrison’s current boss, Secretary Alex Azar, has been apparent for months and some confidants suspect that he’s has gotten caught in the crossfire of a classic Washington ritual: finger pointing.

Read more …

“At the end of the day, we have political systems,” Jonathan Kinloch, district chair of Michigan 13th Congressional District Democratic Party said according to The Detroit News. “We have political parties, and political parties exist for a reason.”

Lawmaker Who Thanked Trump To Face Censure Vote From Michigan Democrats (JTN)

Michigan Democratic state Rep. Karen Whitsett, publicly expressed her gratitude toward President Trump for her coronavirus recovery, and now she is facing possible censure from her fellow Democrats. Whitsett has indicated that the president may have helped save her life by publicly discussing the drug hydroxychloroquine, which she says helped her to recover. The Detroit Free Press reported that when questioned about “whether she thinks Trump may have saved her life, Whitsett said: ‘Yes, I do,’ and ‘I do thank him for that.'” Whitsett earlier this month met with the president at a meeting of coronavirus survivors and expressed her gratitude. “At the end of the day, we have political systems,” Jonathan Kinloch, district chair of Michigan 13th Congressional District Democratic Party said according to The Detroit News.


“We have political parties, and political parties exist for a reason.” “I’m a Democrat, and I plan on continuing to be a Democrat, but they will change their ways,” Whitsett said according to the outlet. “I have my First Amendment right, and no one will take that away from me.” The Detroit News reports that one of the items mentioned in the resolution to censure Whitsett says she “‘has repeatedly and publicly praised the president’s delayed and misguided COVID-19 response efforts in contradiction with the scientifically based and action-oriented response’ from Michigan’s Democratic leadership, ‘endangering the health, safety and welfare of her constituents, the city of Detroit and the state of Michigan.'”

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Shouldn’t they be able to sell more papers? If not now, when?

News Outlets Have Received Millions In Forgivable Stimulus Loans (JTN)

News outlets are receiving tens-of-millions in federal stimulus money as part of the $2.2 trillion coronavirus stimulus package that President Trump signed into law, among them such venerable newspapers as The Seattle Times and Tampa Bay Times. The money is coming through forgivable Paycheck Protection Program loans under the CARES Act that Congress passed last month. According to the Small Business Administration, businesses with under 500 employees can apply for PPP loans, which are forgivable if they are used for qualifying expenses such as payroll costs and rent. However, it’s unclear whether any of the news outlets intend to repay the money, or how much they’ll repay.


The Tampa Bay newspaper, which received an $8.5 million loan, told Just the News on Thursday that its chairman and CEO, Paul Tash, says the federal government will “likely forgive much of the loan” and that the “remaining balance” will carry an interest rate of 1 percent. The Seattle Times received a $9.9 million PPP forgivable loan from the federal government. In its voluntary announcement of the loan, the Seattle Times stated that the loan is forgivable but didn’t specify whether the company plans to repay any of the money. The paper did not respond to a request for comment before publication. The media outlet Axios, based in Arlington, Va., disclosed that it had received a forgivable PPP loan of roughly $5 million. Axios did not respond when asked if it plans to repay the loan.

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Why has the word whistleblower been injected here? Wrongful dismissal doesn’t sound catchy enough?

Ousted US Health Official To File Whistleblower Complaint (R.)

Lawyers for the ousted director of a U.S. agency responsible for the development of drugs to fight the COVID-19 pandemic said on Thursday he will file a whistleblower’s complaint with two government offices over his reassignment. Rick Bright said on Wednesday he was replaced as director of the Biomedical Advanced Research and Development Authority, or BARDA, because he resisted the Trump administration’s efforts to push hydroxychloroquine and the related chloroquine as cures for COVID-19, the respiratory illness caused by the coronavirus. U.S. President Donald Trump has repeatedly touted the malaria drugs as a treatment for coronavirus though few studies suggest a possible benefit.


“In our filing we will make clear that Dr. Bright was sidelined for one reason only — because he resisted efforts to provide unfettered access to potentially dangerous drugs, including chloroquine, a drug promoted by the administration as a panacea, but which is untested and possibly deadly when used improperly,” his lawyers said in a statement. His lawyers said they will file the complaint with the Office of Special Counsel and the Department of Health and Human Services’ Inspector General. Bright hopes he will be reinstated in his post at BARDA once the facts of the case become known, his lawyers said. The Office of Special Counsel, an independent U.S. government agency, investigates and can prosecute abuses against federal employees.

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Wonder how this will evolve when food gets scarce.

WTO Report Says 80 Countries Limiting Exports Of Face Masks, Other Gear (R.)

Eighty countries and customs territories have banned or limited the export of face masks, protective gear, gloves and other goods to mitigate shortages since the coronavirus outbreak began, the World Trade Organization reported on Thursday. It said the bans were imposed by 72 WTO members and eight non-WTO member countries, but only 13 WTO members had notified the global trade body as required by its regulations. Lack of transparency about restrictions and failure to cooperate internationally could undermine efforts to slow the spread of the COVID-19 disease, which has infected 2.64 million people around the world and killed 184,910, the WTO said.


“While the introduction of export-restrictive measures is understandable, the lack of international cooperation in these areas risks cutting off import-reliant countries from desperately needed medical products and triggering a supply shock,” the WTO report said. “And by interfering with established medical supply chains, such measures also risk hampering the urgently required supply response.” Export bans and restrictions are generally prohibited in the WTO, although there are exceptions which allow temporary measures to “prevent or relieve critical shortages of foodstuffs or other products essential to the exporting contracting party.” Travel restrictions had already slowed the flow of goods needed to fight the pandemic, but export restrictions made it difficult for governments and businesses to adjust purchasing decisions and find new suppliers, the report said.

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As someone remarked: Jeffrey Epstein wasn’t available.

Biden Campaign’s Outside Economic Advisers Include Larry Summers (R.)

Former U.S. Treasury Secretary Larry Summers, an academic and longtime economic aide to Democratic presidents, is among the people now advising Joe Biden’s presidential campaign, according to two people familiar with the matter. Summers is a renowned economist with long ties to presidential administrations, including Barack Obama’s. Biden, the presumptive Democratic nominee, served as Obama’s vice president. Summers is viewed critically by some liberals, who view his policy prescriptions as too centrist. Dozens of economic and public health policy officials are briefing Biden ahead of the Nov. 3 election, when Republican President Donald Trump hopes to win a second term.


If he is elected, Biden would be faced with a U.S. economy scarred by a pandemic that has brought large segments to a standstill, forced more than 26 million people to seek unemployment benefits since March 21, and raised the prospect of job losses not seen since the Great Depression of the 1930s. Before then, Biden has to bring together his own party behind his candidacy, including liberals who once backed Senators Bernie Sanders and Elizabeth Warren. The two senators have both endorsed Biden, but it is not clear how many of their supporters will turn out to vote for Biden. [..] “Joe Biden’s will be the most progressive agenda of any president in generations, and he looks forward to his continuing engagement with progressive leaders to build on his existing policies and further the bold goals driving his campaign,” [an] adviser said.

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Simple question: who did the wiping and deleting?

Steele Testified Emails Were Wiped, No Docs Related To Primary Source (DC)

The former MI6 officer made the disclosures during a March 17-18 deposition in a defamation case related to the dossier. The DCNF obtained a transcript of the deposition. Steele suggested in a Dec. 10 statement that he had evidence that would shed light on what his main dossier source told him back in 2016, when Steele was working for the firm Fusion GPS to investigate the Trump campaign. Steele’s statement was a response to an IG report released the day before that said that Steele’s source — dubbed the “Primary Sub-Source” — told the FBI in January 2017 that Steele misrepresented or embellished information in the dossier. That bombshell severely undermined Steele’s report, which the FBI used as part of its investigation into the Trump campaign.

In a rebuttal to the IG, Steele’s lawyers disputed what the dossier source purportedly told the FBI, and said that the source’s debriefings to Steele “were meticulously documented and recorded.” They also asserted that if Steele had been given a chance to respond to the IG report, “the statements by the ‘Primary Sub-Source’ would be put in a different light.” It is unclear if Steele made audio or video recordings of the debriefings with the source, or if the retired spy was referring to written or electronic documents. It is also unclear whether Steele got rid of the information himself, or if it was lost through other means. Steele’s lawyer did not respond to a request for comment.

The status of the information was revealed during an exchange Steele had on March 18 with Hugh Tomlinson, a lawyer for Petr Aven, German Khan, and Mikhail Fridman, the owners of Alfa Bank. The three Russian bankers are suing Steele for defamation over a memo in the dossier that accused them of making illicit payments to Vladimir Putin. Tomlinson pressed Steele over the accuracy of his memo, as well as his relationship with “Primary Sub-Source,” the transcript shows. The lawyer asked Steele about the existence of the documents and recordings that his attorneys mentioned in their rebuttal to the IG report. “But none of these documents exist, so they have all been destroyed?” a lawyer asked Steele. “They no longer exist,” Steele said.

Steele indicated that many other records related to the dossier were deleted, including from a personal email account he used for the Fusion GPS project. “As I understand your position, you have no contemporaneous notes or emails, save for your notes of interactions with the FBI; is that right?” Tomlinson asked. “I believe that is true, yes,” Steele replied. Steele said he had no records related to the creation of his dossier memos, including “Report 112” from the dossier, which dealt with the Alfa Bank owners. “You have no record of anything, have you?” Tomlinson asked. “I haven’t got any records relating to the creation of 112,” said Steele.

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So 75% in Germany, France, but only a third of that overall? Anything to do with population density?

Insect Numbers Down 25% Since 1990 (G.)

The biggest assessment of global insect abundances to date shows a worrying drop of almost 25% in the last 30 years, with accelerating declines in Europe that shocked scientists. The analysis combined 166 long-term surveys from almost 1,700 sites and found that some species were bucking the overall downward trend. In particular, freshwater insects have been increasing by 11% each decade following action to clean up polluted rivers and lakes. However, this group represent only about 10% of insect species and do not pollinate crops. Researchers said insects remained critically understudied in many regions, with little or no data from South America, south Asia and Africa.

Rapid destruction of wild habitats in these places for farming and urbanisation is likely to be significantly reducing insect populations, they said. Insects are by far the most varied and abundant animals, outweighing humanity by 17 times, and are essential to the ecosystems humanity depends upon. They pollinate plants, are food for other creatures and recycle nature’s waste. The previous largest assessment, based on 73 studies, led scientists to warn of “catastrophic consequences for the survival of mankind” if insect losses were not halted. Its estimated rate of decline was more than double that in the new study. Other experts estimate 50% of insects have been lost in the last 50 years. Recent analyses from some locations have found collapses in insect abundance, such as 75% in Germany and 98% in Puerto Rico.

The new, much broader study found a lower rate of losses. However, Roel van Klink, of the German Centre for Integrative Biodiversity Research in Leipzig, who led the research, said: “This 24% is definitely something to be concerned about. It’s a quarter less than when I was a kid. One thing people should always remember is that we really depend on insects for our food.” The research, published in the journal Science, also examined how the rate of loss was changing over time. “Europe seems to be getting worse now – that is striking and shocking. But why that is, we don’t know,” said van Klink. In North America, the declines are flattening off, but at a low level.

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Ever seen him do anything wrong?

Banksy’s ‘Girl with a Pierced Eardrum’ Gains A Coronavirus Face Mask (R.)

Banksy’s “Girl with a Pierced Eardrum” has been updated for the coronavirus era with the addition of a blue surgical face mask. The mural, a take on Dutch artist Johannes Vermeer’s “Girl with a Pearl Earring” but with a security alarm replacing the pearl, was painted on a harbourside building in the street artist’s home city of Bristol in west England in 2014. It is not known whether Banksy, whose identity is a closely guarded secret, or somebody else attached the fabric face mask to the painted girl.


The newly adorned mural did not appear on Banksy’s Instagram page where he usually posts images of his work. The COVID-19 pandemic has already inspired the artist. He unveiled a scene of his trademark stencilled rats running amok in a bathroom rather than on the streets last week, reflecting official advice form the British government to stay at home. “My wife hates it when I work from home,” he commented alongside the photos.

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We would like to run the Automatic Earth on people’s kind donations. Since their revenue has collapsed, ads no longer pay for all you read, and your support is now an integral part of the process.

Thanks for your generosity.

 

 

From Upton Sinclair’s 1927 book “Oil!”, which inspired the movie There Will Be Blood

 

 

 

 

 

 

 

Support the Automatic Earth for your own good.

 

Sep 122019
 


Joan Miro Montroig, la iglesia y el pueblo 1918

 

 

Ok, the mailing lists still don’t work, and now the site layout is skewed too after a WordPress update. Lovely. Apologies. Working on it.

 

 

How the UK Security Services Neutralised The Guardian (Declassified)
The Consequences of the Bush-Era Assault on Civil Liberties (Taibbi)
No-Deal Brexit Papers Warn Of Shortages And Riots (BBC)
£8 Billion Bet on No Deal Crash-Out by Boris Johnson’s Leave Backers (Byline)
ECB To Turn Stimulus Taps Back On To Prop Up Ailing Economy (R.)
Ridiculous EU Commissioner Roles Show Why People Hate Brussels Bureaucracy (RT)
Trump Blasts ‘Mr. Tough Guy’ Bolton (Hill)
Three Bolton Aides Resign From Trump White House After His Exit (Hill)
Investors Concerned Over China’s Capital Controls, Lack Of Transparency (SCMP)
The Rich Can’t Get Richer Forever, Can They? (New Yorker)

 

 

Excellent from Declassified on how and why the Guardian started setting up vicious smear campaigns of Assange, Jeremy Corbyn and others.

How the UK Security Services Neutralised The Guardian (Declassified)

On 20 July 2013, GCHQ officials entered The Guardian’s offices at King’s Cross in London, six weeks after the first Snowden-related article had been published. At the request of the government and security services, Guardian deputy editor Paul Johnson, along with two others, spent three hours destroying the laptops containing the Snowden documents. The Guardian staffers, according to one of the newspaper’s reporters, brought “angle-grinders, dremels – drills with revolving bits – and masks”. The reporter added, “The spy agency provided one piece of hi-tech equipment, a ‘degausser’, which destroys magnetic fields and erases data.”

Johnson claims that the destruction of the computers was “purely a symbolic act”, adding that “the government and GCHQ knew, because we had told them, that the material had been taken to the US to be shared with the New York Times. The reporting would go on. The episode hadn’t changed anything.”

Yet the episode did change something. As the D-Notice Committee minutes for November 2013 outlined: “Towards the end of July [as the computers were being destroyed], The Guardian had begun to seek and accept D-Notice advice not to publish certain highly sensitive details and since then the dialogue [with the committee] had been reasonable and improving.” The British security services had carried out more than a “symbolic act”. It was both a show of strength and a clear threat. The Guardian was then the only major newspaper that could be relied upon by whistleblowers in the US and British security bodies to receive and cover their exposures, a situation which posed a challenge to security agencies.

[..] In 2018, however, The Guardian’s attempted vilification of Assange was significantly stepped up. A new string of articles began on 18 May 2018 with one alleging Assange’s “long-standing relationship with RT”, the Russian state broadcaster. The series, which has been closely documented elsewhere, lasted for several months, consistently alleging with little or the most minimal circumstantial evidence that Assange had ties to Russia or the Kremlin. [..] The string of Guardian articles, along with the vilification and smear stories about Assange elsewhere in the British media, helped create the conditions for a deal between Ecuador, the UK and the US to expel Assange from the embassy in April.

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Security Services rule the world.

The Consequences of the Bush-Era Assault on Civil Liberties (Taibbi)

A judge last week ruled the federal government’s Terrorist Screening Database (TSDB), which secretly categorized more than 1 million people as “known or suspected terrorists,” is unconstitutional. Like a number of “War on Terror” reforms instituted in the Bush years, the TSDB’s unconstitutionality was obvious from its inception. Indeed, the very idea that we needed to “take the gloves off” in our post-9/11 “State of Exception” was an original selling point of some of these programs.

The TSDB is cousin to the No-Fly List (a different and more restrictive list ruled unconstitutional in 2014), the Distribution Matrix (the drone assassination program also known as the “Kill List”), the STELLAR WIND warrantless surveillance program, multiple expansions of the Foreign Intelligence Surveillance Act, the broadened use of National Security Letters to obtain private data without warrant, the “Enhanced Interrogation” program the rest of the world calls torture, and countless other War on Terror initiatives that were and are clear violations of the spirit of the constitution.

[..] The Kill List, the TSDB, and all the secret surveillance programs pose the same problem: they exist more or less completely apart from meaningful public oversight. They’re bureaucratic states within states. For instance, part of the PATRIOT Act governing the issue of National Security Letters (NSLs) – by which the FBI can demand that private companies turn over subscriber information, billing records, and other private data – allows the government to place gag orders on recipients of such letters. Because of this, we only have a faint idea of what NSLs look like. In one rare case, a man named Nicholas Merrill balked and sued when his company was issued a National Security Letter. In that case, the government argued that even releasing the existence of the letter would compromise national security.

This is frightening given that a) no courts need to approve the issuance of such letters, and b) the quantity of such demands is massive. Over a ten-year period, the government reportedly issued over 300,000 NSLs, at one point reaching a pace of 60,000 issued per year. The Merrill case in 2015 represented the first time a gag order was lifted on one of these operations. The recent watchlist lawsuit should remind us we’re assassinating, torturing, snooping on, and blacklisting people all over the world, by means of a continually expanding federal bureaucracy that exists outside of any specific mission, and refuses to recognize the oversight authority of courts or congress.

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They’re ignoring Parliament. Risky strategy. Especially since a first court has now declared prorogation is unlawful. Before Supreme Court next week.

No-Deal Brexit Papers Warn Of Shortages And Riots (BBC)

Riots on the streets, food price rises and reduced medical supplies are real risks of the UK leaving the EU without a deal, a government document has said. Ministers have published details of their Yellowhammer contingency plan, after MPs voted to force its release. It outlines a series of “reasonable worst case assumptions” for the impact of a no-deal Brexit on 31 October. Labour leader Jeremy Corbyn said the paper confirmed the PM “is prepared to punish those who can least afford it”.


Michael Gove, one of Boris Johnson’s senior cabinet colleagues who has been given responsibility for no-deal planning, said “revised assumptions” will be published “in due course alongside a document outlining the mitigations the government has put in place and intends to put in place”. However, ministers have blocked the release of communications between No 10 aides about Parliament’s suspension. Mr Gove said MPs’ request to see e-mails, texts and WhatsApp messages from Dominic Cummings, Boris Johnson’s chief aide, and eight other advisers in Downing Street were “unreasonable and disproportionate”. Publishing the information, he added, would “contravene the law” and “offend against basic principles of fairness”.

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“Under the Ministerial Code, Government ministers must have “no actual or perceived conflicts of interest”.

£8 Billion Bet on No Deal Crash-Out by Boris Johnson’s Leave Backers (Byline)

From the financial data publicly available, Byline Times can reveal that currently £4,563,350,000 (£4.6 billion) of aggregate short positions on a ‘no deal’ Brexit have been taken out by hedge funds that directly or indirectly bankrolled Boris Johnson’s leadership campaign. Most of these firms also donated to Vote Leave and took out short positions on the EU Referendum result. The ones which didn’t typically didn’t exist at that time but are invariably connected via directorships to companies that did. Another £3,711,000,000 (£3.7 billion) of these short positions have been taken out by firms that donated to the Vote Leave campaign, but did not donate directly to the Johnson leadership campaign.


Currently, £8,274,350,000 (£8.3 billion) of aggregate short positions has been taken out by hedge funds connected to the Prime Minister and his Vote Leave campaign, run by his advisor Dominic Cummings, on a ‘no deal’ Brexit. Does this £8 billion bet explain why the Prime Minister has said that he would rather “die in a ditch” before asking the EU for an extension? Is it the reason why Johnson is willing to defy the Benn Act that stops a ‘no deal’ Brexit? Is the £8 billion any kind of motivation to prorogue Parliament? Under the Ministerial Code, Government ministers must have “no actual or perceived conflicts of interest”. But what could be a bigger conflict of interest than those bankrolling the Prime Minister also having a vast financial interest in a catastrophe for Britain?

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How big will Draghi be?

ECB To Turn Stimulus Taps Back On To Prop Up Ailing Economy (R.)

The European Central Bank is set to unveil fresh stimulus measures on Thursday to prop up the ailing euro zone economy, but its exact moves are far from certain and a decision that underwhelms markets risks pushing up borrowing costs. With other major central banks easing monetary policy, Germany at risk of falling into recession and inflation expectations sliding, ECB President Mario Draghi has all but promised more support, putting all of the bank’s remaining tools in play. However Draghi, who hands over the leadership of the central bank to Christine Lagarde at the end of October, will face push back from more conservative members of his Governing Council.


Some policymakers have voiced concerted, public opposition to more radical stimulus measures, particularly the restarting of bond purchases, known as quantitative easing. Also, Draghi’s dovish talk has raised investors’ expectations so high that it will be difficult to fully deliver on them, leaving the ECB at risk of disappointing. This could see market interest rates increase, rather than fall. While the ECB has a wide range of policy instruments at its disposal, each comes with complications, from questionable efficacy and big side effects.

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No, seriously, they have a “Commissioner for Protecting our European Way of Life”

Ridiculous EU Commissioner Roles Show Why People Hate Brussels Bureaucracy (RT)

Ursula von der Leyen has unveiled her new team of EU Commissioners. Their job descriptions and responsibilities are nebulous, oddly overlapping and bound to cause confusion. This is European bureaucracy at its worst.
Most Europeans pay scant attention to the detailed inner workings of Brussels politics, precisely because of the bewildering nature of its bloated bureaucracy. Von der Leyen, the EU Commission President, has gone and made it worse. The former German defense minister has steered away from traditional ministerial titles and opted for more Orwellian-sounding names – the kind you need to google to decipher what they actually mean.


Instead of getting a commissioner for dealing with defense or foreign policy, for instance, we are getting a “Commissioner for a Stronger Europe in the World.” There will also be a “Commissioner for Inter-institutional Relations and Foresight” who will apparently deal with policy-making and regulation and a “Commissioner for an Economy that Works for People.” It’s all very ‘Ministry of Truth’-esque. One particular title has backfired spectacularly. The “Commissioner for Protecting our European Way of Life” will be dealing, partially, with immigration policy. The name has already been slammed as “fascist,” “grotesque” and, my favorite, an “infelicitous semantic choice” due to the alleged implication that Europeans need to be “protected” from immigrants.

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Riddance. Good.

Trump Blasts ‘Mr. Tough Guy’ Bolton (Hill)

President Trump blasted his former national security adviser John Bolton from the White House on Wednesday, saying he had been fired after making “some very big mistakes” and that he did not get along with others in the administration. In a public rebuke of a top aide that would have been extraordinary before the Trump White House, Trump said Bolton had “set us back” and that the adviser had disagreed with the president on various national security issues. He slammed a mistake Bolton made early in his tenure at the White House when he discussed a “Libyan model” in the context of North Korea — which that country took as a sign that its leadership could meet the fate of former Libyan strongman Moammar Gadhafi.


While he insisted he had gotten along with the adviser, he also ridiculed Bolton for getting the United States involved in the Iraq War. “So, John is somebody that I actually got along with very well. He made some very big mistakes,” Trump said a day after his abrupt ousting of Bolton. He said the “Libyan model” remark had set back talks with North Korea and was “not a good statement to make.” “And it set us back, and frankly he wanted to do things — not necessarily tougher than me — You know John’s known as a tough guy. He’s so tough he got us into Iraq … but he’s actually somebody I had a very good relationship with. But he wasn’t getting along with people in the administration that I consider very important.”


Bolton to spend more time with his family

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What kind of job is that anyway?

Three Bolton Aides Resign From Trump White House After His Exit (Hill)

Three aides to national security adviser John Bolton are resigning from the White House a day after news broke of Bolton’s high-profile departure from the Trump administration, Reuters reported. According to the news agency, the White House received resignations on Wednesday from the trio of staffers, who have reportedly worked with Bolton for years: Bolton’s former spokesman, Garrett Marquis; his former communications director, Sarah Tinsley; and Christine Samuelian, who served as Bolton’s scheduler. Marquis said in a statement obtained by Reuters Wednesday that “it was an honor to serve my country, and I wish the president and the administration success moving forward.”


The Hill has not yet confirmed the departures with the White House. The departures came a day after Trump announced that he had fired Bolton via Twitter, citing disagreements they had over “many of his suggestions.” “I informed John Bolton last night that his services are no longer needed at the White House. I disagreed strongly with many of his suggestions, as did others in the Administration, and therefore I asked John for his resignation, which was given to me this morning,” Trump said in a pair of tweets on Tuesday morning.

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If you can’t get your money out, why invest?

Investors Concerned Over China’s Capital Controls, Lack Of Transparency (SCMP)

China’s biggest investment fair was intended to project the image that the country is fully open for business, but instead it has been dominated by foreign firms complaining that local governments are still making it a difficult place to operate. Delegates in Xiamen this week suggested that local governments are ignoring advice from Beijing as it aims to increase market access and level the playing field with domestic companies, meaning that the implementation of reforms to make it easier for foreign firms to operate in China still have not gone far enough. As it undergoes pressures caused in the most part by the trade war with the United States, Beijing is redoubling its efforts to woo investment by lavishing promises of fair treatment on foreign investors and giving VIP treatment to the likes of Telsa CEO Elon Musk.

But capital controls that restrict the flow of money into and out of the country, as well as lack of transparency in the bidding processes involving local governments, were among specific concerns raised during a panel discussion at the annual China International Fair for Investment and Trade. “In the past, when it comes to tenders and bidding, everyone would immediately turn to the company identity. This happened very often. This is a foreign company, that is a state company and this is a private company,” said Wang Jie, vice-president of Schneider Electric China, which manufactures and distributes electrical components. “Sometimes it’s not explicit, but it would be like, ‘This is an important project, maybe it isn’t appropriate for a foreign company.’”

[..] Zhou Bing, vice-president for Dell Greater China, said that it is important to have more flexibility in cross-border capital flows to boost trade, with China currently maintaining strict controls that can effectively shut off outflows. This can prove to be a major disadvantage for overseas investors who want to know that they can transfer their money out of China after it has been invested. “We are a typical company in the processing trade business here,” said Zhou, referring to a company that imports components into China to assemble them into finished goods before being exported. “So, it means there’s massive amount of capital flowing in and out [of China]. Right now, it’s still relatively smooth, but in the long term, do we want to keep our capital in China, do we keep our profit in China? It depends on how open the policy is.”

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It’s not just America, the whole world should think this over. Inequality doesn’t last.

The Rich Can’t Get Richer Forever, Can They? (New Yorker)

In 1831, Alexis de Tocqueville, at the age of twenty-five, was sent by France’s Ministry of Justice to study the American penal system. He spent ten months in the United States, dutifully visiting prisons and meeting hundreds of people, including President Andrew Jackson and his predecessor, John Quincy Adams. On his return to France, he wrote a book about his observations, “Democracy in America,” the first volume of which was published in 1835. Many of the observations have weathered well (he noted, for instance, how American individualism coexisted with conformism). Others have not. For example, Tocqueville, who was the youngest son of a count, was deeply impressed by how equal the economic conditions in the United States were. It was, at the time, an accurate assessment.


The United States was the world’s most egalitarian society. Wages in the young nation were higher than in Europe, and land in the West was abundant and cheap. There were rich people, but they weren’t super-rich, like European aristocrats. According to “Unequal Gains: American Growth and Inequality Since 1700,” by the economic historians Peter H. Lindert and Jeffrey G. Williamson, the share of national income going to the richest one per cent of the population was more than twenty per cent in Britain but below ten per cent in America. The prevailing ideology of the country favored equality (though, to be sure, only for whites); Americans were proud that there was a relatively small gap between rich and poor. “Can any condition of society be more desirable than this?” Thomas Jefferson bragged to a friend.

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Jan 172019
 


Pablo Picasso Nude female standing 1922

 

Theresa May Survives Confidence Vote, Britain Remains In Brexit Deadlock (G.)
Corbyn: No Talks With May Until No-Deal Brexit Is Off The Table (G.)
Markets Expect Brexit To Be Delayed, Bank Of England Governor Says (G.)
More Than 170 UK Business Leaders Join Call For 2nd Brexit Referendum (G.)
German Carmakers Warn Hard Brexit Would Be ‘Fatal’ (R.)
Trump ‘Inclined’ To Impose New US Auto Tariffs (R.)
Chinese Unemployment Worries Grow As Beijing Beefs Up Stimulus (CNBC)
China Injects Gargantuan 1.1 Trillion In Liquidity This Week (ZH)
Greek PM Tsipras Wins Confidence Vote After FYROM Name Crisis (R.)
DOJ Official Warned Steele Dossier Biased, Connected To Clinton (Solomon)
The New York Times Smears the President (Stockman)
Fake Washington Post Copies Announcing Trump Resignation Handed Out In DC (RT)
Plastic Pollution Of The Oceans Is Set To Treble In The Next Decade (G.)

 

 

Brexit will be delayed, quite possibly indefinitely. May’s looking for a way to achieve this while putting the blame on anyone but herself. She survived this votes only becasue of the DUP, whose votes she bought. Welcome to democracy.

Theresa May Survives Confidence Vote, Britain Remains In Brexit Deadlock (G.)

Theresa May has survived as prime minister after weathering a dramatic no-confidence vote in her government, but was left scrambling to strike a Brexit compromise that could secure the backing of parliament. In a statement in Downing Street on Wednesday night, the prime minister exhorted politicians from all parties to “put aside self-interest”, and promised to consult with MPs with “the widest possible range of views” in the coming days. It followed her announcement that she would invite Jeremy Corbyn and other party leaders for immediate talks on how to secure a Brexit deal, something she had declined to do earlier in the day, although Labour later said Corbyn would decline the invitation unless no-deal was taken off the table.

A day after overwhelmingly rejecting her Brexit deal, rebel Conservatives and Democratic Unionist party (DUP) MPs swung behind the prime minister to defeat Labour’s motion of no confidence by 325 votes to 306 – a majority of 19. In her late-night statement, the prime minister said: “I am disappointed that the leader of the Labour party has not so far chosen to take part – but our door remains open … It will not be an easy task, but MPs know they have a duty to act in the national interest, reach a consensus and get this done.”

The Scottish National party’s leader in Westminster, Ian Blackford, met May on Wednesday night, and the Liberal Democrat leader, Vince Cable, also accepted her invitation. Blackford later wrote to May, urging her to make a “gesture of faith” to show that she was serious. He said the SNP would take part in cross-party talks if she was able to confirm “that the extension of article 50, a ruling out of a no-deal Brexit and the option of a second EU referendum would form the basis of those discussions”.

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Corbyn is gambling on new elections. That, too, delays any solution.

Corbyn: No Talks With May Until No-Deal Brexit Is Off The Table (G.)

Jeremy Corbyn has said he will not hold talks with Theresa May until the prime minister agrees to remove the threat of a no-deal Brexit, ruling out any meeting with the prime minister in the immediate aftermath of the no-confidence vote. Responding to May’s offer of swift talks to break the Brexit impasse, the Labour leader told MPs that before he would entertain “positive discussions about the way forward” she had to agree to his precondition. “The government must remove clearly once and for all the catastrophe of a no-deal exit from the European Union and all the chaos that would result from that,” Corbyn said minutes after the opposition party was defeated in the confidence vote.

Minutes after the exchanges in the Commons, with Downing Street refusing to take no deal off the table, Corbyn’s spokesman said that as things stood, the Labour leader would not take up May’s offer of an evening Brexit meeting. The two sides were still in discussions, but in light of such a fundamental difference, appeared unlikely to come to an agreement to speak in the immediate future – even though only 10 weeks remain until the UK’s planned departure date. When asked directly if Corbyn was going to No10, the spokesman added: “As I understand it that is not going to take place.”

Labour is willing to support a Brexit deal if May will accept a customs union, a close relationship with the single market and enhanced protections for workers and consumers rights. However, this would represent a massive shift for the prime minister and risk splits in her own party, making it hard to see how a deal could be agreed. Corbyn’s spokesman acknowledged this, saying, “Any change in the government red lines will cause them internal splits.”

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Times headline said 2020.

Markets Expect Brexit To Be Delayed, Bank Of England Governor Says (G.)

Investors expect a delay to Britain’s exit from the EU following the crushing defeat of the prime minister’s Brexit deal, the Bank of England governor has said. Mark Carney said the reaction of financial markets in the wake of the vote showed a degree of confidence that a no-deal Brexit was unlikely on 29 March. The pound bounced back against the dollar on Tuesday night amid optimism that article 50 would be prolonged and that the prospect of a disorderly severance from Brussels had receded. “Public market commentary, consistent with our market intelligence, is that a rebound appears to reflect some expectation that the process of resolution would be extended and that the prospect of no-deal may have been diminished,” said Carney.

Speaking to MPs on the Treasury select committee on Wednesday, the governor said investors were following developments in parliament closely to detect shifts in the direction of Brexit. The reaction of EU officials and governments across the continent was also being watched closely. Carney said a “sharp rebound in sterling following the vote” was the main indicator that some investors believed Brexit could be delayed beyond the end of March.

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2nd referendum is poison. General elections not so much. But the Tories will cling to power no matter what.

More Than 170 UK Business Leaders Join Call For 2nd Brexit Referendum (G.)

More than 170 business leaders, including Terence Conran and Norman Foster, have thrown their weight behind the campaign for a second referendum on Brexit. In a step designed to indicate growing support for a “people’s vote” after Theresa May suffered the heaviest parliamentary defeat in the modern era over her Brexit plan, the letter due to be published in the Times on Thursday asks both main party leaders in Westminster to support a second referendum. Conran, the renowned designer, who was knighted in 1983, and Lord Foster, the architect behind the Gherkin skyscraper in the City of London, were among 172 signatories from the world of business urging a second referendum on the final Brexit deal.

The architect Sir David Chipperfield and the noble laureate and research scientist Paul Nurse were also among new names on the list of supporters. Several other captains of industry, including Mike Rake, the former chairman of BT, had previously backed the campaign and were also included as signatories. The figures from business, together representing more than £100bn in annual contributions to the UK economy, warned that a bad Brexit deal or Britain leaving without any deal at all could damage the economy. While admitting that many business leaders had initially backed May’s deal, even though they believed it was far from perfect, the group stated that the priority after the prime minister’s defeat in parliament was to stop a “chaotic crash-out from the EU”.

The letter said: “The only viable way to do this is by asking the people whether they still want to leave the EU. With the clock now ticking rapidly before we are due to quit, politicians must not waste any more time on fantasies. We urge the leadership of both the main parties to support a people’s vote.” Both May and the Labour frontbench under Jeremy Corbyn have so far dismissed the idea of a second referendum. The prime minister has said she will speak to senior MPs to find a compromise deal, while Corbyn is pushing for a general election.

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German economy is under severe pressure. Still, I don’t see what’s so wrong about fewer cars.

German Carmakers Warn Hard Brexit Would Be ‘Fatal’ (R.)

German carmakers on Wednesday warned of fatal consequences if Britain left the European Union without a divorce deal, predicting job losses in Britain and Europe and urging lawmakers to redouble efforts to ensure tariff-free trade can continue. Prime Minister Theresa May’s deal to leave the EU suffered an overwhelming defeat in parliament on Tuesday, leaving the country’s future in limbo and manufacturers bracing for their “worst-case scenario”, a no-deal Brexit. Britain would suffer most if it lost free trade with European markets since 80 percent of vehicles assembled in the country are exported, mostly to the European Union. But for Germany the stakes are also high.

In 2016, Britain was the largest single export market for German manufacturers, who sold 800,000 new cars there, or 20 percent of their overall global exports. Fewer cars are exported to China and U.S. because German carmakers have factories there. “The consequences of a ‘no deal’ would be fatal,” German auto industry association VDA said after the vote. “Without an orderly and practical solution for business, jobs in the car industry, particularly on the British side, are on the line.”

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Cars is not the big one, agriculture is. But Europe won’t budge on chlorinated chickens.

Trump ‘Inclined’ To Impose New US Auto Tariffs (R.)

U.S. President Donald Trump is likely to move ahead with tariffs on imported vehicles, a move that could prompt the European Union to agree a new trade deal, said Senate Finance Committee Chairman Charles Grassley on Wednesday. “I think the president’s inclined to do it,” the Republican senator told reporters. “I think Europe (is) very very concerned about those tariffs … It may be the instrument that gets Europe to negotiate.” U.S. Commerce Department recommendations into whether Trump should impose tariffs of up to 25% on imported cars and parts on national security grounds are due by mid-February. Grassley, who has had regular talks with Trump and U.S. Trade Representative Robert Lighthizer on trade issues, said he did not like new tariffs but “they are a fact of life when Trump is in the White House.”

He said they may have been an “effective tool” in getting China, Canada, Mexico and others to negotiate on trade. Iowa senator Grassley also wants the EU to agree to include agricultural issues in trade talks, although EU trade commissioner Cecilia Malmström said last week the 28-country bloc could not negotiate on agriculture. The White House has pledged not to move forward with imposing tariffs on the EU or Japan as long as it is making constructive progress in bilateral trade talks. Trump has urged the EU to drop its 10% tariff on imported vehicles. The U.S. passenger car tariff is 2.5%, while it imposes 25% tariffs on pickup trucks. Trump has repeatedly threatened to impose new auto tariffs. “Cars is the big one,” Trump said last year.

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The economy grows 6% amid widespread job losses?!

Chinese Unemployment Worries Grow As Beijing Beefs Up Stimulus (CNBC)

Beijing is working hard to stop a slowing Chinese economy from hitting its workforce. In the last several weeks authorities have made a flurry of announcements, including tax cuts, monetary policy loosening and plans to support public spending. The push comes as economic data points to sagging domestic growth and the U.S. looks set to keep up the pressure on trade. Amid that environment, worries of widespread job losses won’t help the already gloomy sentiment that’s giving consumers a second thought on spending. The overarching worry for China’s leaders is that unemployment could lead to social unrest, and deeper questioning of the Communist Party’s claim to having a handle on the best interests of the country.

Already, the economy is widely expected to slow from around 6.5% growth to just above 6%. “We think the biggest risk in the near term is rising unemployment around the Lunar New Year,” Haibin Zhu, chief China economist and head of China equity strategy, J.P. Morgan, said in a Monday report. [..] Gavekal Dragonomics’ China Consumer Analyst Ernan Cui pointed out in a Jan. 9 report that an official survey covering 374,000 large industrial firms shows total employment declined by about 2.8 million people in the 12 months through November. [..] [A UBS] survey in November found that 23% of 125 Chinese respondents in manufacturing have already laid off employees due to the negative effect of U.S.-China trade tensions. Some 34% planned to lay off employees in the next six months, and 18% had cut wages, the report said.


Job losses in Chinese manufacturing accelerated in mid-2018 after the U.S. imposed tariffs Note: Employment in large industrial enterprises, three-month moving average. December excluded for data anomalies.

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“..a panicked “spasm”..”

China Injects Gargantuan 1.1 Trillion In Liquidity This Week (ZH)

Following what Bloomberg calculated was a record net reverse repo liquidity injection on Wednesday, when the PBOC injected a whopping 560 billion yuan of liquidity into the financial system via open market operations, the Chinese central bank has done it again and in Thursday’s open market operation, it sold 250BN yuan in 7 Day repos (slightly below yesterday’s record 350BN), and 150BN in 28 Day repos, which net of maturities resulted in a whopping net 380BN yuan ($56.2BN) liquidity injection. This brings the net liquidity injection this week to a near record 1.14 Trillion yuan (Monday 20BN, Tuesday 180BN, Wednesday 560BN and Thursday 380BN) and the week is not even over yet – should tomorrow’s reverse repo be of similar magnitude, then this week will go down in history as China’s biggest liquidity injection on record.

As yesterday, today’s massive liquidity injection was aimed at “keeping reasonable and sufficient liquidity in banking system as liquidity falls relatively fast during peak season for tax payments,” according to a statement from the PBOC, although why this year should be such a significant outlier, even when factoring in the liquidity needs ahead of the Lunar new year, to prior periods was not exactly clear. There is, of course, a much simpler explanation: with Chinese economic and trade data turning from bad to worse with every passing day, Beijing’s response is increasingly one of a panicked “spasm”, as Nomura’s Charlie McElligott wrote today when he noted that with regard to the response of Chinese authorities in addressing their economic slowdown and credit crunch, “it had to get worse before it got better”—recently collapsing Chinese data has now clearly forced an escalation of easing-/stimulus-/liquidity- policies.

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He ‘won’ by one vote. And now has to win another vote on the name deal itself. Funny to see western media all say Macedonia is set to change its name. Who likes homework, after all? There is no country named Macedonia, that’s the whole point.

Greek PM Tsipras Wins Confidence Vote After FYROM Name Crisis (R.)

The Greek prime minister, Alexis Tsipras, has won a confidence vote in parliament, clearing a major hurdle for Greece’s approval of an accord to end a dispute over Macedonia’s name and averting the prospect of a snap election. Tsipras called the confidence motion after his rightwing coalition partner Panos Kammenos quit the government on Sunday in protest at the name deal signed between Athens and Skopje last year. Parliament gave Tsipras 151 votes, meeting the threshold he required in the 300-member assembly. His leftist party, Syriza, has 145 seats in parliament. Additional support was given by defectors of Kammenos’s Independent Greeks party (ANEL) and independents.

Tsipras told parliament: “I call upon you with hand on heart to give a vote of confidence to the government which gave battle, which bled, but managed to haul the country out of memorandums and surveillance,” referring to Greece’s international lenders, who kept the country on a tight leash for years. [..] Greek opponents of the agreement say Macedonia’s new name – the Republic of North Macedonia, reached after decades of dispute between Athens and Skopje – represents an attempt to appropriate Greek identity.

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There are far too many questions for this to go away. Bill Barr to the rescue.

DOJ Official Warned Steele Dossier Biased, Connected To Clinton (Solomon)

When the annals of mistakes and abuses in the FBI’s Russia investigation are finally written, Bruce Ohr almost certainly will be the No. 1 witness, according to my sources. The then-No. 4 Department of Justice (DOJ) official briefed both senior FBI and DOJ officials in summer 2016 about Christopher Steele’s Russia dossier, explicitly cautioning that the British intelligence operative’s work was opposition research connected to Hillary Clinton’s campaign and might be biased. Ohr’s briefings, in July and August 2016, included the deputy director of the FBI, a top lawyer for then-Attorney General Loretta Lynch and a Justice official who later would become the top deputy to special counsel Robert Mueller.

At the time, Ohr was the associate attorney general. Yet his warnings about political bias were pointedly omitted weeks later from the Foreign Intelligence Surveillance Act (FISA) warrant that the FBI obtained from a federal court, granting it permission to spy on whether the Trump campaign was colluding with Russia to hijack the 2016 presidential election. Ohr’s activities, chronicled in handwritten notes and congressional testimony I gleaned from sources, provide the most damning evidence to date that FBI and DOJ officials may have misled federal judges in October 2016 in their zeal to obtain the warrant targeting Trump adviser Carter Page just weeks before Election Day.

They also contradict a key argument that House Democrats have made in their formal intelligence conclusions about the Russia case. Since it was disclosed last year that Steele’s dossier formed a central piece of evidence supporting the FISA warrant, Justice and FBI officials have been vague about exactly when they learned that Steele’s work was paid for by the law firm representing the Clinton campaign and the Democratic National Committee (DNC). A redacted version of the FISA application released last year shows the FBI did not mention any connection to the DNC or Clinton.

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David guts the entire narrative. Well done.

The New York Times Smears the President (Stockman)

The Donald has been on a red hot twitter rampage, and he’s completely justified. Actually, we didn’t think the Russian Collusion Hoax could get any stupider until we saw the New York Times’ Friday evening bushwhack. The trio of authors, apparently self-tortured victims of the Trump Derangement Syndrome, actually had the gall to print a story in the once and former Gray Lady of journalistic rectitude which was nothing more than an ugly smear on the sitting President of the United States—one that would have done Joe McCarthy proud. [..] the trio —one of whom graduated from Harvard in 2015 and the other two not much older—don’t seem to even know that foreign policy is a debatable issue.

Or that the American people actually voted into office a candidate who took the other side of Imperial Washington’s unwarranted demonization of Putin and made no bones about his desire for a rapprochement with Russia. Actually, as to pursuing rapprochement, so did: • JFK, after the near catastrophe of the Cuban Missile Crisis; • Lyndon Johnson, after the Seven Days War during his meeting with Kosygin at Glassboro NJ; • Richard Nixon, with the ABM Treaty, detente and his visit with Brezhnev in Moscow; • Jimmy Carter, when he signed the SALT-II agreement; • Ronald Reagan, when he went to Moscow to virtually end the Cold War; and • Bill Clinton, when he sent a multi-billion IMF aid package to Yeltsin to help him get re-elected in 1996.

The fact is, all of the above presidential policy initiatives were heatedly debated in Washington during a period when the US and Soviet Union each had roughly 9,000 nuclear warheads pointed at the other. But that did not lead to FBI counter-intelligence investigations of politicians—to say nothing of sitting Presidents—who took the “wrong” side of these thoroughly democratic debates.

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Wonder who they’re mocking. Is it Bezos?

Fake Washington Post Copies Announcing Trump Resignation Handed Out In DC (RT)

Taking the art of fake news to new heights, a non-profit has circulated mock Washington Post issues near the White House, telling readers that President Donald Trump fled to Crimea on the back of women-led protests. Activists giving out fake copies of the Washington Post commuters were spotted near the White House on Wednesday morning. Vigilant readers immediately alerted the newspaper, which said that the copies, dated May 1, 2019, were “not Post products” and that it was “looking into this.” The fake copies include an eye-catching headline for the lead story: “UNPRESIDENTED. Ending Crisis, Trump Hastily Departs White House,” complete with a picture of a glum Trump on his way to “slip in a private car in the wee hours of the morning.”

The paper “reports” that Trump abruptly left his office at 3:15am on May 1, leaving a message on a napkin in the Oval Office that blamed “crooked Hillary,” the mysterious “Hfior,” and “the Fake News Media” for his flight. The report, meticulously mimicking the Washington Post’s source-based reporting style, cites “four White House aides” speaking on condition of anonymity, that they found the napkin two days before events took a dramatic turn. Trump’s fictional resignation and the subsequent swearing-in of Vice President Mike Pence, who instantly promises to keep as low a profile as possible, comes amidst “massive protests” staged by a grassroots movement with #MeToo as its backbone.

[..] The news of Trump’s resignation sparks a wave of celebrations across the globe, with European countries refusing to shelter him. The creators of the fake diligently stick to the Washington Post’s style, fanning the Russia collusion narrative just like their prototype by sending Trump to seek safe haven in Russia – namely, Crimea. While there has been speculation that radical liberal political activist group MoveOn or CODEPINK, a women-led grassroots NGO, might be behind the stunt since they promoted the action, later in the day, The Yes Men, a progressive non-profit group, claimed responsibility in a press release.

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UK MPs want action. I say don’t depend on politicians if you want to get things done. Britain has a target date of 2042 for phasing out avoidable plastic waste. As its volume is set to treble by 2030. That is so insane, forget about the rest too. Politics won’t solve this.

Plastic Pollution Of The Oceans Is Set To Treble In The Next Decade (G.)

A new global agreement to protect the seas should be a priority for the government to stop our seas becoming a “sewer”, according to a cross-party group of MPs. Plastic pollution is set to treble in the next decade, the environmental audit committee warned, while overfishing is denuding vital marine habitats of fish, and climate change is causing harmful warming of the oceans as well as deoxygenation and acidification. The effects of plastic pollution are particularly poorly understood, the committee found in its report, published on Thursday. It found “a lack of data on the serious long-term harm and health implications of plastic particles entering the food chain” and accused the government of treating the oceans as “out of sight, out of mind”.

One way of tackling the problem would be through a “Paris agreement for the sea”, the MPs recommended. Governments are still working on a possible new ocean protection treaty, under the UN. The MPs also called for the government to bring forward the target date of phasing out avoidable plastic waste from 2042, and urged greater action to reduce greenhouse gas emissions. Labour MP Mary Creagh, chair of the committee, said: “We have to stop treating our seas as a sewer. Plastic, chemicals and sewage are choking our oceans, polluting our water and harming every ocean species from plankton to polar bears. Supporting Indonesia and Malaysia to reduce plastic while simultaneously exporting our contaminated plastics to them shows the lack of a joined-up approach at the heart of the government’s strategy.”

[..] A UK government spokesperson said: “The UK is already a global leader in protecting our seas and oceans. We have recently proposed 41 new marine conservation zones, led calls to protect 30% of the world’s oceans by 2030, and we are going further and faster to tackle the plastic that harms marine life with our ambitious resources and waste strategy. “We know there is more to do, and we will soon publish an international ocean strategy to drive global action to conserve the world’s oceans.”

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Jun 142018
 
 June 14, 2018  Posted by at 8:42 am Finance Tagged with: , , , , , , , , , , , , ,  5 Responses »


Wassily Kandinsky Free Curve to the Point – Accompanying Sound of Geometric Curves 1925

 

This Fed Grows Relentlessly More Hawkish (WS)
ECB Gets Ready To Pull The Plug On Stimulus Scheme (R.)
The ECB, Not The Fed, Is The Match That Will Spark Bond Market Volatility (MW)
China Holds Fire On Rates, Posts ‘Shockingly Weak’ Activity Growth (R.)
Riskiest Junk Bonds Completely Blow Off the Fed, Face “Sudden” Reckoning (WS)
Cryptocurrency Bloodbath Continues, Tether Accused Of Manipulating Bitcoin (MW)
The Tories’ Chaotic Brexit Has Lost The Trust Of Business – Jobs Will Go (G.)
The North Korea Summit Through the Looking Glass (Jacobin)
Italy-France Relations Collapse Amid North-African Migrant Spat (ZH)
Apple Steps Up Encrytion To Thwart Police Cracking of iPhones (AFP)
FYROM and Greece Fail To Resolve Bitter Naming Dispute (G.)
Antarctic Ice Melting Faster Than Ever (G.)

 

 

Is there anyone alive who thinks that the US, EU, global economies are strong enough to withstand large scale liquidity withdrawal?

This Fed Grows Relentlessly More Hawkish (WS)

“The economy is in great shape,” Fed Chairman Jerome Powell said today at the press conference after the FOMC meeting. Inflation as measured by the Fed’s preferred low-ball measure “core PCE” has hit the Fed’s target of 2%, and the Fed expects it to hit 2.1% by year-end. Inflation as measured by CPI jumped to 2.8%. “Job gains have been strong,” today’s statement said. The “unemployment rate has declined,” while “growth of household spending has picked up,” and “business fixed investment has continued to grow strongly.” This is no longer the crisis economy of yore. But the interest rates are still low and stimulative, befitting for a crisis economy. So something needs to be done, and it’s getting done, if “gradually.”

There were all kinds of intriguing elements in the FOMC’s increasingly hawkish but “gradual” hoopla today. By unanimous vote, the FOMC raised its target for the federal funds rate by a quarter percentage point to a range between 1.75% and 2.0%. This was expected; what’s intriguing is the unanimous vote, unlike prior rate hikes. Four rate hikes in 2018 (two more this year) are now gradually being baked in, according to the median expectation of the 15 members of the FOMC, per the infamous “dot plot” with which the Fed tries to communicate potential rate moves: One member expects 5 rate hikes in 2018; seven members expect 4 hikes; five members expect 3 hikes, and two members expect no more hikes.

At the March meeting, four rate hikes had appeared in the dot plot as a real but more distant possibility. Two more hikes this year would bring the top end of the target range to 2.5% by year-end. This shows the 2018 section of the dot plot:

Rates are expected to continue to rise, three times in 2019 and once in 2020, nudging the federal funds rate to nearly 3.5%. A presser after every meeting – oh boy. During the press conference, Powell said that, starting next January, there will be a press conference after every FOMC meeting. This idea has been mentioned a couple of times recently to prepare markets for it. Now it’s official. As in every Fed announcement, it’s no biggie, really, trust us. The move is designed to “explain our actions and answer your questions,” Powell said. It was “only about improving communications.” It didn’t mean at all that the Fed would be speeding up its rate hikes, he said.

[..] Interest paid to the banks on excess reserves gets a makeover. Banks have about $1.89 trillion in “excess reserves” on deposit at the Fed. The Fed has been paying banks interest on these excess reserves at a rate that was equal to the top of the Fed’s target range – so 1.75% since the last rate hike, which amounts to an annual rate of $33 billion of easy profits for the banks. In theory with today’s rate hike, the FOMC would also have increased the rate it pays on excess reserves to 2.0%.

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But the European economy is not ready. What now, accelerate Target2 even more?

ECB Gets Ready To Pull The Plug On Stimulus Scheme (R.)

The ECB will debate on Thursday whether to end its huge asset purchases by year-end, in what would be its biggest step towards dismantling crisis-era stimulus credited with pulling the euro zone economy out of recession. Financial investors are coming to terms with the end of a decade of easy money from the world’s top central banks, with the Federal Reserve on Wednesday raising interest rates for a seventh time in 3-1/2 years in a further shift from policies used to battle the 2007-2009 financial crisis and recession. Meeting as growth is slowing and political populism threatens to set off market turbulence, the ECB is expected to argue that its 2.55 trillion euro bond-buying scheme has done its job in bringing the 19-member currency bloc back from the brink of collapse.

Whether policymakers take the actual decision at their meeting in Riga on Thursday or hold off until July appears secondary as they have long argued that the scheme, commonly known as quantitative easing (QE), should be concluded and the policy focus shift to the expected path of interest rates. The biggest complication could be the increasingly murky economic outlook, weighed down by a developing trade war with the United States, a populist challenge from Italy’s new government and softening export demand. But these factors could actually hasten the ECB’s decision rather than hold it back as the bank has little policy firepower left and a further weakening of the outlook could make a later exit more difficult.

“We believe the ECB may be in a hurry to close the QE chapter,” Bank of America Merrill Lynch said in a note to clients. “We think this is essentially political, as the ECB would not want its monetary policy to be affected by claims of supporting or conversely impairing the new policy course in Italy.”

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Don’t forget the BOJ and China.

The ECB, Not The Fed, Is The Match That Will Spark Bond Market Volatility (MW)

Rising real interest rates haven’t yet made for a sustained pickup in Treasury volatility, leaving some investors to ask what it would take to spark some turbulence. Danielle DiMartino Booth of Quill Intelligence said the European Central Bank, and not the Federal Reserve, holds the key as it looks to set a timetable for winding down its ultra-accommodative policies. With the Federal Reserve’s shrinking balance sheet unable to offset easy global financial conditions on its own, investors should closely watch the ECB at Thursday’s meeting where the central bank is expected to discuss the end of quantitative easing, though the actual wind-down almost certainly remains several months away at the earliest. “The culmination of ECB QE will remove a bond-volatility governor,” said Booth, in a note published on Tuesday.

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And there comes China. Xi fighting the shadows is like Don Quixote and the windmills.

China Holds Fire On Rates, Posts ‘Shockingly Weak’ Activity Growth (R.)

China’s economy is finally starting to cool under the weight of a multi-year crackdown on riskier lending that is pushing up borrowing costs for companies and consumers, with data on Thursday pointing to a broad slowdown in activity in May. China’s central bank sparked concerns over the health of the economy earlier in the day when it left short-term interest rates unchanged, surprising markets which had expected it to follow a hike by the Federal Reserve, as it has tended to do. Industrial output, investment and retail sales all grew less than expected, suggesting further weakness ahead if Beijing perseveres with its crackdowns on pollution, questionable local government spending and off-balance sheet “shadow” financing.

The data, which showed the slowest investment growth in over 22 years, “was all shockingly weak by Chinese standards,” economists at Rabobank said, adding that the readings may explain the central bank’s decision to keep rates on hold. “Get ready for headlines talking about Chinese deleveraging hitting the economy – except it isn’t even deleveraging yet! China is walking more of a tightrope than markets believe – and the data underline that issue clearly,” they said. China has been walking a fine line between rolling out measures to curb financial risks and pollution and tapping the brakes so hard that business activity slows sharply.

Much of their effort so far has focused on the banking sector rather than corporate debt reduction or deleveraging – possibly explaining why China’s headline growth has been so surprisingly solid. GDP has expanded at a steady 6.8 percent for three straight quarters. But official and unofficial gauges are now showing the regulatory crackdown is starting to filter through to the broader economy, with companies complaining it is harder to get financing and a growing number of firms defaulting on bonds.

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In a world of their own.

Riskiest Junk Bonds Completely Blow Off the Fed, Face “Sudden” Reckoning (WS)

High-grade corporate bonds are “gradually” – the key word in everything the Fed says – and reluctantly coming to grips with the new era: Yields are rising and bond prices are falling. The Fed has been laboring to accomplish that. With high-grade debt, the Fed’s plan is working “gradually.” But investors in the riskiest corporate junk debt are totally blowing off the Fed. They’re floating around in their own dream world, facing a very rude awakening. In terms of high-grade corporate bonds, the sell-off has been significant, even if it’s just the beginning. The S&P index for AA-rated bonds is down 2.7% so far this year. As prices have declined, yields have surged, with the average AA yield now at 3.51%, up from around 2.2% in mid to late-2016 (data via ICE BofAML US AA Effective Yield Index):

These are the types of bonds that Apple and other large companies hold in their “cash or cash equivalent” accounts that are registered overseas, and that are now being “repatriated” and sold, and the proceeds from the sales are now being plowed into mega-share buyback programs. These corporations, once avid buyers of this high-grade corporate debt, have turned into sellers.

[..] at the riskiest end of the corporate bond spectrum, with bonds rated CCC or below (deep junk), the party that started at the end of the oil bust in February 2016 simply continued. The S&P bond index for CCC-rated bonds has risen 4.5% so far this year (compared to a 2.7% decline for AA-rated index). Since February 2016, when Wall Street decided to plow new money into junk-rated energy companies, the CCC-rated index has skyrocketed 82%. The average yield of bonds rated CCC or lower is now at 9.56%, down from 12.5% in December 2016, when the Fed got serious, and down from 22% during the peak of the oil bust. This is the lowest yield since the bygone era of “QE Infinity” in June 2014:

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“Less than 1% of hours with such heavy Tether transactions are associated with 50% of the meteoric rise in bitcoin and 64% of other top cryptocurrencies..”

Cryptocurrency Bloodbath Continues, Tether Accused Of Manipulating Bitcoin (MW)

The bloodbath in the digital currency market showed no sign of abating, with all major coins trading in the red Wednesday. In the past 24-hours, a further $25 billion has been wiped off the total value of all cryptocurrencies, led by bitcoin, the world’s biggest digital currency, which reached its lowest level since Feb. 5. A single bitcoin traded to an intraday low of $6,133.31 and has since bounced to $6,280.18, down 3.8%, since Tuesday 5 p.m. Eastern Time on the Kraken Exchange. The total value of all cryptocurrencies dipped below $270 billion in late afternoon New York trading, the lowest level since April 11, according to data from CoinMarketCap. The move lower came after a research report found data that it said suggested the price of bitcoin may have been manipulated in late 2017.

In the University of Texas paper, researchers said they uncovered data that they believe shows Tether, a stable coin that is pegged to the U.S. dollar, was used to artificially push up the price of bitcoin during its late 2017 rally towards $20,000. “Less than 1% of hours with such heavy Tether transactions are associated with 50% of the meteoric rise in bitcoin and 64% of other top cryptocurrencies,” wrote John M. Griffin, a finance professor and Amin Shams, a graduate student. Questions have surrounded Tether and crypto exchange Bitfinex, which were both subpoenaed by the Commodity Futures Trading Commission in 2017 seeking data on Tether and its backing of U.S. dollars. Today’s findings will bring the 11th most traded cryptocurrency back into the spotlight.

“Overall, we find that Tether has a significant impact on the cryptocurrency market. Tether seems to be used both to stabilize and manipulate bitcoin prices,” they said.

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Losing business support may prove fatal for May.

The Tories’ Chaotic Brexit Has Lost The Trust Of Business – Jobs Will Go (G.)

[..] away from parliament, and far from the tabloid front pages, a serious breach is opening up in British politics. Last week some of the most senior business leaders in Britain came out of a Brexit meeting at No 10, and promptly tore the prime minister to shreds. “We’re playing economics; [the politicians] are playing politics,” said Paul Drechsler, president of the bosses’ organisation, the Confederation of British Industry. “In the world of business, we’re frustrated. We’re angry.” An extraordinary statement, especially from an executive invited to tea and biscuits with May. If supposedly tame industrialists now talk like this, you have to wonder what sounds come out of the feral lot.

Yet the CBI’s impatience is shared by many. Once the long-haul arm of the Tory movement, the Freight Transport Association lashed out at May last week for “playing chicken with crucial parts of the British economy and the livelihoods of … 7 million Britons”. These are close friends of the Conservative party.As one senior representative of a leading business organisation says: “Over the past two years, most company bosses would never risk saying openly that Brexit is turning out to be a disaster, in case it scared off their best staff.” With fewer than 290 days before Britain formally leaves the EU, their caution is running out.

This is a far bigger story than the one on the front pages about who promised which amendment to which band of Tories. One of the fundamental relationships in the establishment is fracturing – and the consequences for government and economy could prove to be historic.

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“Not Trump” is not an identity.

The North Korea Summit Through the Looking Glass (Jacobin)

On Tuesday, as Donald Trump and Kim Jong-un shook hands for their much-anticipated summit in Singapore, one Korean reporter observed a curious episode. Koreans watching the scene unfold on a TV screen at a railway station in Seoul began applauding. Meanwhile, some nearby Western tourists, perturbed by this development, scratched their heads in confusion. “I am actually baffled to see them clapping here,” said one British tourist. There’s perhaps no better symbol of the gulf in worldwide reactions to the summit than this episode. While South Koreans cautiously celebrated a historic step in the thawing of hostilities that have hung over them for almost seventy years, the Western media seemed to look on with alarm — even anger.

Hostility to the summit, much of it from Democrats and liberals, had been a staple of press coverage in the months leading up to it, often from commentators who just a few months earlier had been panicking about exactly the opposite outcome. But it reached a fever pitch over the last few days. There was, for example, the collective hyperventilation over a symbolic arrangement of North Korean and US flags. There was MSNBC’s Nicole Wallace, who warned that the whole summit was actually a “Trumpian head fake,” a mere artifact of Trump’s “midterm strategy” and his “get out of sitting with Bob Mueller strategy.” Sue Mi Terry of the defense contractor–funded Center for Strategic and International Studies cautioned that “a peace treaty is not okay” and should “come at the end of the process” because it “undermines the justification of our troops staying in South Korea.”

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Let’s see what happens when the next ship comes.

Italy-France Relations Collapse Amid North-African Migrant Spat (ZH)

Italy has postponed high-level discussions with France on Wednesday after French President Emmanuel Macron criticized Rome for refusing to take in a migrant rescue ship full of 629 shipwrecked North Africans – forcing it to divert to Valencia, Spain. After the ship ran out of supplies, the Italian Navy agreed to escort them across the Mediterranean. “Italy’s new Economy Minister Giovanni Tria said he was cancelling a meeting with his French counterpart Bruno le Maire in Paris. The French economy ministry later said the ministers had “agreed that Mr Tria will come to Paris in the coming days”. -AFP

Italy’s decision to refuse the migrants came after their new Interior Minister, Matteo Salvini, said in early June that “the good times for illegals are over” – writing an urgent letter ordering Malta to accept the 629 migrants picked up by the non-governmental organization (NGO) ship MV Aquarius, run by the group SOS Mediterranee. Salvini called Malta the “safest port” for the passengers, advising that Rome would not offer refuge. After Malta refused leading to several days in limbo, Spain agreed to take the passengers. In response to the ordeal, French President Emmanuel Macron accused Italy of “cynicism and irresponsibility,” adding that their EU neighbor is “playing politics” with the refugees.

Meanwhile Gabriel Attal, the spokesman for Macron’s party, called Italy’s actions “nauseating”. Italian Interior Minister Matteo Salvini responded – saying on Tuesday that he would not “accept hypocritical lessons from countries that have preferred to look the other way on immigration,” and adding on Wednesay that unless France issues an “official apology” for Macron’s inflammatory comments, a Friday meeting between Italian Prime Minister Guiseppe Conte and Macron should be canceled.

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What will the police do when quantum computing gets involved?

Apple Steps Up Encrytion To Thwart Police Cracking of iPhones (AFP)

Apple said Wednesday it was strengthening encryption on its iPhones to thwart police efforts to unlock handsets without legitimate authorization. The move by Apple, the latest in an ongoing clash with law enforcement, comes amid reports of growing use of a tool known as GrayKey which can enable police to bypass iPhone security features. Apple said the new features are not designed to frustrate law enforcement but prevent any bypassing of encryption by good or bad actors. “At Apple, we put the customer at the center of everything we design,” the company said in a statement.

“We’re constantly strengthening the security protections in every Apple product to help customers defend against hackers, identity thieves and intrusions into their personal data. We have the greatest respect for law enforcement, and we don’t design our security improvements to frustrate their efforts to do their jobs. Apple said it was working a fix to mitigate the possibility of accessing data from GrayKey or similar tools. Apple said that it has a team that responds to law enforcement and national security requests 24 hours a day. But the company has been a target of some in law enforcement for rejecting efforts to allow easy access to iPhones.

Two years ago, Apple went to court to block an FBI effort to force it to weaken iPhone encryption on the device of a mass shooter in San Bernardino, California, but officials dropped the case after finding a tool to unlock the phone.

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As square pegs and round holes go, this one will linger… Greeks don’t want the name Macedonia used in any way, Skopje wants nothing else.

FYROM and Greece Fail To Resolve Bitter Naming Dispute (G.)

Governments in Skopje and Athens have faced a furious backlash as the challenge of solving one of the world’s most bitter diplomatic feuds hit home just a day after Macedonia announced it was willing to change its name. Hours after the two neighbours declaring they had reached a landmark accord that would see the tiny Balkan state rename itself the Republic of North Macedonia, the nation’s president refused point-blank to sign the deal. “My position is final and I will not yield to any pressure, blackmail or threats,” president Gjorge Ivanov, who is backed by the nationalist opposition, told a news conference in Skopje. The agreement had conceded far too much to Greece – even if its ultimate aim was the country’s future membership of Nato and the EU, he said.

The backlash came despite officials in Brussels, London and Washington reacting with unbridled enthusiasm to the breakthrough. Nato secretary general, Jens Stoltenberg welcomed the accord, saying: “This is really an historical agreement by [politicians] who have shown courage and great political leadership.” Greece has long argued that the state’s name – adopted when it broke away from Yugoslavia in 1991 – conveys thinly disguised irredentist claims on its own northern province of Macedonia. The appropriation of figures associated with ancient Greek history – not least Alexander the Great – had reinforced fears in a region prone to shifting borders.

But opposition to the deal was also pronounced in Greece. As in Skopje – where prime minister Zoran Zaev’s leftist coalition was accused of leading the country to national humiliation – prime minister Alexis Tsipras and his leftist Syriza party was also charged with surrendering cherished national rights. One newspaper ran a front-page graphic showing Tsipras, the Greek foreign minister and president being shot by firing squad for treason.

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84 scientists from 44 international organisations..

Antarctic Ice Melting Faster Than Ever (G.)

Ice in the Antarctic is melting at a record-breaking rate and the subsequent sea rises could have catastrophic consequences for cities around the world, according to two new studies. A report led by scientists in the UK and US found the rate of melting from the Antarctic ice sheet has accelerated threefold in the last five years and is now vanishing faster than at any previously recorded time. A separate study warns that unless urgent action is taken in the next decade the melting ice could contribute more than 25cm to a total global sea level rise of more than a metre by 2070. This could lead eventually to the collapse of the entire west Antarctic ice sheet, and around 3.5m of sea-level rise.

Prof Andrew Shepherd, from Leeds University and a lead author of the study on accelerating ice loss, said: “We have long suspected that changes in Earth’s climate will affect the polar ice sheets. Thanks to our satellites our space agencies have launched, we can now track their ice losses and global sea level contribution with confidence.” He said the rate of melting was “surprising.” “This has to be a cause for concern for the governments we trust to protect our coastal cities and communities,” Shepherd added. The study, published in Nature, involved 84 scientists from 44 international organisations and claims to be the most comprehensive account of the Antarctic ice sheet to date.

It shows that before 2012, the Antarctic lost ice at a steady rate of 76bn tonnes per year – a 0.2mm per year contribution to sea-level rise. However since then there has been a sharp increase, resulting in the loss of 219bn tonnes of ice per year – a 0.6mm per year sea-level contribution. The second study, also published in Nature, warns that time is running out to save the Antarctic and its unique ecosystem – with potentially dire consequences for the world. The scientists assessed the probable state of Antarctica in 2070 under two scenarios. The first in which urgent action on greenhouse gas emissions and environmental protection is taken in the next few years, the second if emissions continue to rise unabated and the Antarctic is exploited for its natural resources.

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Sep 012017
 
 September 1, 2017  Posted by at 9:40 am Finance Tagged with: , , , , , , , , ,  5 Responses »


Vincent van Gogh Seine with Pont de Clichy 1887

 

Monetary Stimulus: How Much Is Too Much? (Lebowitz)
Yes, You Should Be Concerned With Consumer Debt (Roberts)
Why We’re Doomed: Stagnant Wages (CHS)
US Fuel Shortages From Harvey To Hamper Labor Day Travel (R.)
Wells Fargo Says 3.5 Million Accounts Involved In Scandal (AP)
World’s Biggest Wealth Fund Reveals Bleak View on Global Trade (BBG)
New Math Deals Minnesota’s Pensions the Biggest Hit in the US (BBG)
Six Big Banks To Create A Blockchain-Based Cash System (R.)
Putin Warns Of ‘Major Conflict’ Over North Korea, Urges Talks (AFP)
Trump, Nuclear War And Climate Change Among Gravest Threats To Humanity (PA)
Greece Doesn’t Want Any More Rescues – But It Does Need Something Else (CNBC)
Hurricane Irma Turning Into Monster (ZH)

 

 

Take their power away or else.

Monetary Stimulus: How Much Is Too Much? (Lebowitz)

The amount of monetary stimulus increasingly imposed on the financial system creates false signals about the economy’s true growth rate, causing a vast misallocation of capital, impaired productivity and weakened economic activity. To help quantify the amount of stimulus, please consider the graph. Federal Reserve (Fed) monetary stimulus comes in two forms. First in the form of targeting the Fed Funds interest rate at a rate below the nominal rate of economic growth (blue). Second, it stems from the large scale asset purchases QE) by the Fed (orange). When these two metrics are quantified, it yields an estimate of the average amount of monetary stimulus (red) applied during each post-recession period since 1980. It has been almost ten years since the 2008 financial crisis and the Fed is applying the equivalent of 5.25% of interest rate stimulus to the economy, dwarfing that of prior periods.

The graph highlights that the Fed has been increasingly aggressive in both the amount of stimulus employed as well as the amount of time that such monetary stimulus remains outstanding. Amazingly few investors seem to comprehend that despite the massive level of monetary stimulus, economic growth is trending well below recoveries of years past. Additionally, as witnessed by historically high valuations, the rise in the prices of many financial assets is not based on improving economic fundamentals but simply the stimulative effect that QE and low interest rates have on investor confidence and financial leverage. Now consider the ramifications of a Fed that continues to increase the Fed Funds rate and moves forward with plans to slowly remove QE.

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America: the House that Debt Built.

Yes, You Should Be Concerned With Consumer Debt (Roberts)

First, the calculation of disposable personal income, income less taxes, is largely a guess and very inaccurate due to the variability of income taxes paid by households. Secondly, but most importantly, the measure is heavily skewed by the top 20% of income earners, needless to say, the top 5%. As shown in the chart below, those in the top 20% have seen substantially larger median wage growth versus the bottom 80%.

Lastly, disposable incomes and discretionary incomes are two very different animals. Discretionary income is what is left of disposable incomes after you pay for all of the mandatory spending like rent, food, utilities, health care premiums, insurance, etc. According to a Gallup survey, it requires about $53,000 a year to maintain a family of four in the United States. For 80% of Americans, this is a problem even on a GROSS income basis.

This is why record levels of consumer debt is a problem. There is simply a limit to how much “debt” each household can carry even at historically low interest rates. It is also the primary reason why we can not have a replay of the 1980-90’s. “Beginning 1983, the secular bull market of the 80-90’s began. Driven by falling rates of inflation, interest rates, and the deregulation of the banking industry, the debt-induced ramp up of the 90’s gained traction as consumers levered their way into a higher standard of living.”

“While the Internet boom did cause an increase in productivity, it also had a very deleterious effect on the economy. As shown in the chart above, the rise in personal debt was used to offset the declines in personal income and savings rates. This plunge into indebtedness supported the ‘consumption function’ of the economy. The ‘borrowing and spending like mad’ provided a false sense of economic prosperity. During the boom market of the 1980’s and 90’s consumption, as a%age of the economy, grew from roughly 61% to 68% currently. The increase in consumption was largely built upon a falling interest rate environment, lower borrowing costs, and relaxation of lending standards. (Think mortgage, auto, student and sub-prime loans.) In 1980, household credit market debt stood at $1.3 Trillion. To move consumption, as a% of the economy, from 61% to 67% by the year 2000 it required an increase of $5.6 Trillion in debt. Since 2000, consumption as a% of the economy has risen by just 2% over the last 17 years, however, that increase required more than a $6 Trillion in debt.

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Doomed growth projections.

Why We’re Doomed: Stagnant Wages (CHS)

Despite all the happy talk about “recovery” and higher growth, wages have gone nowhere since 2000–and for the bottom 20% of workers, they’ve gone nowhere since the 1970s. GDP has risen smartly since 2000, but the share of GDP going to wages and salaries has plummeted: this is simply an extension of a 47-year downtrend. [..] .. our system requires ever-higher household incomes to function–not just in the top 5%, but in the top 80%. Our federal social programs–Social Security, Medicare and Medicaid–are pay-as-you-go: all the expenditures this year are paid by taxes collected this year. As I have detailed many times, the so-called “Trust Funds” are fictions; when Social Security runs a deficit, the difference between receipts and expenses are filled by selling Treasury bonds in the open market–the exact same mechanism ther government uses to fund any other deficit.

The demographics of the nation have changed in the past two generations. The Baby Boom is retiring en masse, expanding the number of beneficiaries of these programs, while the number of full-time workers to retirees is down from 10-to-1 in the good old days to 2-to-1: there are 60 million beneficiaries of Social Security and Medicare and about 120 million full-time workers in the U.S. Meanwhile, medical expenses per person are soaring. Profiteering by healthcare cartels, new and ever-more costly treatments, the rise of chronic lifestyle illnesses–there are many drivers of this trend. There is absolutely no evidence to support the fantasy that this trend will magically reverse.

Costs are skyrocketing and the number of retirees is ballooning, but wages are going nowhere. Do you see the problem? All pay-as-you-go programs are based on the assumption that the number of workers and the wages they earn will both rise at a rate that is above the underlying rate of inflation and equal to the rate of increase in pay-as-you-go programs. If 95% of the households are earning less money when adjusted for inflation, and their wealth has also declined or stagnated, then how can we pay for programs which expand by 6% or more every year? The short answer is you can’t.

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Are we going to add this to the cost of Harvey?

US Fuel Shortages From Harvey To Hamper Labor Day Travel (R.)

Travelers and fuel suppliers across the United States braced for higher prices and shortages ahead of the Labor Day holiday weekend as the country’s biggest fuel pipelines and refineries curb operations after Hurricane Harvey. Just six days after Harvey slammed into the heart of the U.S. energy industry in Texas, the effects are being felt not just in Houston, but also in Chicago and New York, and prices at the pump nationwide have hit a high for the year. Supply shortages have developed even though there are nearly a quarter of a billion barrels of gasoline stockpiled in the United States. But much of it is held in places where it cannot be accessed due to massive floods, or too far away from the places it is needed. Some of it is unfinished, meaning it needs to be blended before it can go to gas stations.

Harvey has highlighted another weakness in the system: pipeline terminals typically only have a five-day supply in storage to load into the lines. Some of the biggest pipelines in the United States, supplying the northeast market and the Chicago area, have already shut down or reduced operations because they have no fuel to pump. “Gasoline is very much a ‘just-in-time’ fuel, for as many million barrels as they think we have,” said Patrick DeHaan, petroleum analyst at GasBuddy. “Sure, they are somewhere, but they still have to be mixed and blended together.” At least two East Coast refiners, including Philadelphia Energy Solutions and Irving Oil, have already run out of gasoline for immediate delivery as they have rushed to send supplies to the U.S. Southeast, Caribbean, Mexico and South America to offset the lack of exports since Harvey.

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Lock them up!

Wells Fargo Says 3.5 Million Accounts Involved In Scandal (AP)

The scope of Wells Fargo’s fake accounts scandal grew significantly on Thursday, with the bank now saying that 3.5 million accounts were potentially opened without customers’ permission between 2009 and 2016. That’s up from 2.1 million accounts that the bank had cited in September 2016, when it acknowledged that employees under pressure to meet aggressive sales targets had opened accounts that customers might not have even been aware existed. People may have had different kinds of accounts in their names, so the number of customers affected may differ from the account total. Wells Fargo said Thursday that about half a million of the newly discovered accounts were missed during the original review, which covered the years 2011 to 2015.

After Wells Fargo acknowledged the fake accounts last year, evidence quickly appeared that the sales practices problems dated back even further. So Wells Fargo hired an outside consulting firm to analyze 165 million retail bank accounts opened between 2009 and 2016. Wells said the firm found that, along with the 2.1 million accounts originally disclosed, 981,000 more accounts were found in the expanded timeline. And roughly 450,000 accounts were found in the original window. The scandal was the biggest in Wells Fargo’s history. It cost then-CEO John Stumpf his job, and the bank’s once-sterling industry reputation was in tatters. The company ended up paying $185 million to regulators and settled a class-action suit for $142 million. New managers have been trying to amends with customers, politicians and the public.

But it’s been tough, as new revelations keep coming. Wells Fargo said last month that roughly 570,000 customers were signed up for and billed for car insurance that they didn’t need or necessarily know about. Many couldn’t afford the extra costs and fell behind in their payments, and in about 20,000 cases, cars were repossessed. Other customers have filed lawsuits against Wells Fargo saying they were victims of unfair overdraft practices. Wells Fargo is also still under several investigations for its sales practices problems, including a congressional inquiry and one by the Justice Department. Wells Fargo said Thursday that of the 3.5 million accounts potentially opened without permission, 190,000 of those incurred fees and charges. That’s up from 130,000 that the bank originally said. Wells Fargo will refund $2.8 million to customers, in addition to the $3.3 million it already agreed to pay.

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Wise.

World’s Biggest Wealth Fund Reveals Bleak View on Global Trade (BBG)

Yngve Slyngstad, chief executive officer of Norges Bank Investment Management, as the fund is known, says the heyday of cross-border trade is probably behind us. “The question investors are asking themselves is if the easy wins already have been made,” Slyngstad said in an Aug. 29 interview from his office on the top floor of Norway’s central bank in Oslo. “The global supply chains have in a way had a one-time gain primarily through outsourcing of multinationals to China.” Norway’s wealth fund owns 1.3% of globally listed stocks, spread out over almost 80 countries. And with interest rates at record lows, the investor has cut its long-term return expectations to about 3% from 4%, even after winning approval from parliament to raise its share of equities to 70% from 60%.

Slyngstad, who became CEO in 2008 just as the global economy was sinking into the worst crisis since the Great Depression, noted that back then the fund rode out the turmoil by dumping bonds and buying stocks. “I don’t expect that we will act differently in any similar crisis in the future,” he said. During a recent conference on globalization, the fund’s chief strategist, Bjorn Erik Orskaug, suggested the world might be at an “inflection point” in trade, with shallower value chains and less cross-border production. And then there’s the protectionist agenda some governments are pursuing. “Is there also a political situation that could make it more challenging?” Slyngstad said. “Time will tell, but there’s of course a risk on the horizon.” He says the wealth fund’s extremely long-term investment timeline allows it to look past the noise coming from governments that come and go.

The fund will probably stay over-weighted in Europe, where it’s more of an active investor. But the only two economies that really matter are the U.S. and China, Slyngstad said. [..] As the fund approaches $1 trillion in value, its stated goal is to safeguard today’s oil wealth for future generations of Norwegians. It has surged in size since its inception two decades ago, generating an annual nominal return of 5.89%. Norway’s government last year started taking cash out of the fund for the first time, to make up for lower oil revenue. Withdrawals are set to hit about 72 billion kroner ($9.3 billion) in 2017, and remain at that level in coming years amid stricter fiscal rules.

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Once the creative accounting is removed, there won’t be much left.

New Math Deals Minnesota’s Pensions the Biggest Hit in the US (BBG)

Minnesota’s debt to its workers’ retirement system has soared by $33.4 billion, or $6,000 for every resident, courtesy of accounting rules. The jump caused the finances of Minnesota’s pensions to erode more than any other state’s last year as accounting standards seek to prevent governments from using overly optimistic assumptions to minimize what they owe public employees decades from now. Because of changes in actuarial math, Minnesota in 2016 reported having just 53% of what it needed to cover promised benefits, down from 80% a year earlier, transforming it from one of the best funded state systems to the seventh worst, according to data compiled by Bloomberg. “It’s a crisis,” said Susan Lenczewski, executive director of the state’s Legislative Commission on Pensions and Retirement.

The latest reckoning won’t force Minnesota to pump more taxpayer money into its pensions, nor does it put retirees’ pension checks in any jeopardy. But it underscores the long-term financial pressure facing governments such as Minnesota, New Jersey and Illinois that have been left with massive shortfalls after years of failing to make adequate contributions to their retirement systems. The Governmental Accounting Standards Board’s rules, ushered in after the last recession, were intended to address concern that state and city pensions were understating the scale of their obligations by counting on steady investment gains even after they run out of cash – and no longer have money to invest. Pensions use the expected rate of return on their investments to calculate in today’s dollars, or discount, the value of pension checks that won’t be paid out for decades.

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Everybody wants their share of the pie.

Six Big Banks To Create A Blockchain-Based Cash System (R.)

Six new banks have joined a UBS-led effort to create a digital cash system that would allow financial markets to make payments and settle transactions quickly via blockchain technology. The group aims to launch the system late next year. Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG and State Street have joined the group developing the “utility settlement coin” (USC), a digital cash equivalent of each of the major currencies backed by central banks, UBS said on Thursday. The group is in discussions with central banks and regulators and is aiming for a “limited ’go live’” in the latter part of 2018, UBS’s head of strategic investment and fintech innovation told the Financial Times.

The Swiss bank first launched the concept in September 2015 with London-based blockchain company Clearmatics, and was later joined on the project by BNY Mellon, Deutsche Bank, Santander and brokerage ICAP. The USC would be convertible at parity with a bank deposit in the corresponding currency, making it fully backed by cash assets at a central bank. Spending a USC would be the same as spending the real currency it is paired with. Blockchain works as a tamper-proof shared ledger that can automatically process and settle transactions using computer algorithms, with no need for third-party verification. Because it does not require manual processing, nor authentication through intermediaries, the technology can make payments faster, more reliable and easier to audit.

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Better talk with him.

Putin Warns Of ‘Major Conflict’ Over North Korea, Urges Talks (AFP)

Russian President Vladimir Putin warned Friday of a “major conflict” looming on the Korean Peninsula, calling for talks to alleviate the crisis after Pyongyang fired a missile over Japan this week. “The problems in the region will only be solved via direct dialogue between all concerned parties, without preconditions,” Putin said. “Threats, pressure and insulting and militant rhetoric are a dead end,” a statement from his office said, adding that heaping additional pressure on North Korea in a bid to curb its nuclear programme was “wrong and futile.” Tensions on the Korean Peninsula are at their highest point in years after a series of missile tests by Pyongyang.

Early on Tuesday, the reclusive state fired an intermediate-range Hwasong-12 over Japan, prompting US President Donald Trump to insist that “all options” were on the table in an implied threat of pre-emptive military action. The UN Security Council denounced North Korea’s latest missile test, unanimously demanding that Pyongyang halt the programme. US heavy bombers and stealth jet fighters took part in a joint live fire drill in South Korea on Thursday, intended as a show of force against the North, Seoul said. Putin said he feared the peninsula was “on the verge of a major conflict” and called for all sides to sign up to a mediation programme drawn up by Moscow and Beijing. He echoed comments by Foreign Minister Sergei Lavrov who in a Wednesday telephone call with US counterpart Rex Tillerson “underscored… the need to refrain from any military steps that could have unpredictable consequences.”

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Prime candidate for worst report ever. The Independent tweeetd: “12 Nobel Prize winners just warned Trump is one of the gravest threats to humanity “. But that’s not what the article by the Press Association says. It says two.

Trump, Nuclear War And Climate Change Among Gravest Threats To Humanity (PA)

Nobel Prize winners consider nuclear war and US President Donald Trump as among the gravest threats to humanity, a survey has found. More than a third (34%) said environmental issues including over-population and climate change posed the greatest risk to mankind, according to the poll by Times Higher Education and Lindau Nobel Laureate Meetings. But amid rising tensions between the US and North Korea, almost a quarter (23%) said nuclear war was the most serious threat. Of the 50 living Nobel Prize winners canvassed, 6% said the ignorance of political leaders was their greatest concern – with two naming Mr Trump as a particular problem. Peter Agre, who won the Nobel Prize for chemistry in 2003, described the US President as “extraordinarily uninformed and bad-natured”. He told Times Higher Education: “Trump could play a villain in a Batman movie – everything he does is wicked or selfish.”

Laureates for chemistry, physics, physiology, medicine and economics took part in the survey, with some highlighting more than one threat. Peace Prize and Literature Prize recipients were not canvassed. Infectious diseases and drug resistance were considered the gravest threats to humankind by 8% of respondents, while 8% cited selfishness and dishonesty and 6% cited terrorism and fundamentalism. Another 6% spoke of the dangers of “ignorance and the distortion of truth”. Despite high-profile figures Elon Musk and Professor Stephen Hawking expressing concern about the dangers associated with artificial intelligence, just two of those surveyed identified it as among the biggest threats facing humans.

John Gill, editor of Times Higher Education, said the survey offers “a unique insight into the issues that keep the world’s greatest scientific minds awake at night”. He said: “There is a consensus that heading off these dangers requires political will and action, the prioritisation of education on a global scale, and above all avoiding the risk of inaction through complacency.”

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Stockholm Syndrome?

Greece Doesn’t Want Any More Rescues – But It Does Need Something Else (CNBC)

Greece wants nothing more than to avoid another bailout — which means it needs debt relief. And so far, that’s the sticking point. “There is now light at the end of the tunnel,” Greek Finance Minister Euclid Tsakalotos said hopefully in June. After months of wrangling, the European Union and International Monetary Fund had just agreed to release more rescue funds to the perennially troubled nation, bringing the total from its third bailout alone to €40.2 billion ($47.75 billion). Euro zone finance ministers took very light steps toward debt relief at that time — they said they were willing to keep deferring interest on financial assistance Greece had already received — but those measures fell short of the relief Greek Prime Minister Alexis Tsipras was pressing for.

The current bailout program is set to end in September of next year. Greece has been wracked by perennial financial crises since 2010, and it even appeared at risk of leaving the euro zone altogether in 2015. Tsipras’s objective is to re-gain full market access to international bond markets and to leave institutional help behind, so the subject of long-term debt is one that will continue to dominate discussions as it draws closer to September 2018. In July, Greece dipped into bond markets after a 3-year hiatus, issuing 5-year debt at an average yield of 4.66%. Greece is expected to return to the market again in the next 12 months. But Greece’s debt isn’t manageable in the long-run without being either extended or forgiven, according to the IMF, which is pressing for easier budgetary targets for Greece while simultaneously undertaking reforms.

Its European creditors currently require it to achieve a primary surplus before debt service of 3.5% of gross domestic product. The ECB has also been emphatic that it will not include Greek government bonds in its own debt-buying mechanism, the Public Sector Purchase Program. In a June letter, ECB President Mario Draghi ruled out that possibility, saying the central bank’s staff wasn’t in a position to fully analyze Greece’s public debt. Analysts at Barclays have estimated that the inclusion of Greek debt into ECB’s bond-buying program would entail monthly purchases of around 115 million euros ($136.5 million).

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Not looking good.

Hurricane Irma Turning Into Monster (ZH)

Hurricane Irma continues to strengthen much faster than pretty much any computer model predicted as of yesterday or even this morning. Per the National Hurricane Center’s (NHC) latest update, Irma is currently a Cat-3 storm with sustained winds of 115 mph but is expected to strengthen to a devastating Cat-5 with winds that could top out at 180 mph or more. Longer term computer models still vary widely but suggest that Irma will make landfall in the U.S. either in the Gulf of Mexico or Florida. Meteorological Scientist Michael Ventrice of the Weather Channel is forecasting windspeeds of up to 180 mph, which he described as the “highest windspeed forecasts I’ve ever seen in my 10 yrs of Atlantic hurricane forecasting.”

In a separate tweet, Ventrice had the following troubling comment: “Wow, a number of ECMWF EPS members show a maximum-sustained windspeed of 180+mph for #Irma, rivaling Hurricane #Allen (1980) for record wind”. The Weather Channel meteorologist also calculated the odds for a landfall along the eastern seaboard at 30%. Meanwhile, the Weather Channel has the “most likely” path of Irma passing directly over Antigua, Puerto Rico and Domincan Republic toward the middle of next week.

Read more …

Apr 232017
 
 April 23, 2017  Posted by at 2:31 pm Finance Tagged with: , , , , , , , , , ,  11 Responses »


René Magritte Le Cri du Coeur 1960

 

Austerity is over, proclaimed the IMF this week. And no doubt attributed that to the ‘successful’ period of ‘five years of belt tightening’ a.k.a. ‘gradual fiscal consolidation’ it has, along with its econo-religious ilk, imposed on many of the world’s people. Only, it’s not true of course. Austerity is not over. You can ask many of those same people about that. It’s certainly not true in Greece.

IMF Says Austerity Is Over

Austerity is over as governments across the rich world increased spending last year and plan to keep their wallets open for the foreseeable future. After five years of belt tightening, the IMF says the era of spending cuts that followed the financial crisis is now at an end. “Advanced economies eased their fiscal stance by one-fifth of 1pc of GDP in 2016, breaking a five-year trend of gradual fiscal consolidation,” said the IMF in its fiscal monitor.

In Greece, the government did not increase spending in 2016. Nor is the country’s era of spending cuts at an end. So did the IMF ‘forget’ about Greece? Or does it not count it as part of the rich world? Greece is a member of the EU, and the EU is absolutely part of the rich world, so that can’t be it. Something Freudian, wishful thinking perhaps?

However this may be, it’s obvious the IMF are not done with Greece yet. And neither are the rest of the Troika. They are still demanding measures that are dead certain to plunge the Greeks much further into their abyss in the future. As my friend Steve Keen put it to me recently: “Dreadful. It will become Europe’s Somalia.”

An excellent example of this is the Greek primary budget surplus. The Troika has been demanding that it reach 3.5% of GDP for the next number of years (the number changes all the time, 3, 5, 10?). Which is the worst thing it could do, at least for the Greek people and the Greek economy. Not for those who seek to buy Greek assets on the cheap.

 

But sure enough, the Hellenic Statistical Authority (ELSTAT) jubilantly announced on Friday that the 2016 primary surplus was 4.19% (8 times more than the 0.5% expected). This is bad news for Greeks, though they don’t know it. It is also a condition for receiving the next phase of the current bailout. Here’s what that comes down to: in order to save itself from default/bankruptcy, the country is required to destroy its economy.

And that’s not all: the surplus is a requirement to get a next bailout tranche, and debt relief, but as a reward for achieving that surplus, Greece can now expect to get less … debt relief. Because obviously they’re doing great, right?! They managed to squeeze another €7.3 billion out of their poor. So they should always be able to do that in every subsequent year.

The government in Athens sees the surplus as a ‘weapon’ that can be used in the never-ending bailout negotiations, but the Troika will simply move the goalposts again; that’s its MO.

A country in a shape as bad as Greece’s needs stimulus, not a budget surplus; a deficit would be much more helpful. You could perhaps demand that the country goes for a 0% deficit, though even that is far from ideal. But never a surplus. Every penny of the surplus should have been spent to make sure the economy doesn’t get even worse.

Greek news outlet Kathimerini gets it sort of right, though its headline should have read “Greek Primary Surplus Chokes Economy“.

Greek Primary Surplus Chokes Market

The state’s fiscal performance last year has exceeded even the most ambitious targets, as the primary budget surplus as defined by the Greek bailout program, came to 4.19% of GDP, government spokesman Dimitris Tzanakopoulos announced on Friday. It came to €7.369 billion against a target for €879 million, or just 0.5% of GDP. A little earlier, the president of the Hellenic Statistical Authority (ELSTAT), Thanos Thanopoulos, announced the primary surplus according to Eurostat rules, saying that it came to 3.9% of GDP or €6.937 billion.

The two calculations differ in methodology, but it is the surplus attained according to the bailout rules that matters for assessing the course of the program. This was also the first time since 1995 that Greece achieved a general government surplus – equal to 0.7% of GDP – which includes the cost of paying interest to the country’s creditors. There is a downside to the news, however, as the figures point to overtaxation imposed last year combined with excessive containment of expenditure.

The amount of €6-6.5 billion collected in excess of the budgeted surplus has put a chokehold on the economy, contributing to a great extent to the stagnation recorded on the GDP level in 2016. On the one hand, the impressive result could be a valuable weapon for the government in its negotiations with creditors to argue that it is on the right track to fiscal streamlining and can achieve or even exceed the agreed targets. On the other hand, however, the overperformance of the budget may weaken the argument in favor of lightening the country’s debt load.

Eurogroup head Dijsselbloem sees no shame in admitting this last point :

Dijsselbloem Sees ‘Tough’ Greek Debt Relief Talks With IMF

“That will be a tough discussion with the IMF,” said Dijsselbloem, who is also the Dutch Finance Minister in a caretaker cabinet, “There are some political constraints where we can go and where we can’t go.” The level of Greece’s primary budget surplus is key in determining the kind of debt relief it will need. The more such surplus it has, the less debt relief will be needed.

That’s just plain insane, malicious even. Greek PM Tsipras should never have accepted any such thing, neither the surplus demands nor the fact that they affect debt relief, since both assure a further demise of the economy.

Because: where does the surplus come from? Easy: from Troika-mandated pension cuts and rising tax levels. That means the Greek government is taking money OUT of the economy. And not a little bit, but a full 4% of GDP, over €7 billion. An economy from which so much has already vanished.

The €7.369 billion primary surplus, in a country of somewhere between 10 and 11 million people, means some €700 per capita has been taken out of the economy in 2016. Money that could have been used to spend inside that economy, saving jobs, and keeping people fed and sheltered. For a family of 3.5 people that means €200 per month less to spend on necessities (the only thing most Greeks can spend any money on).

I’ve listed some of the things a number of times before that have happened to Greece since the EU and IMF declared de facto financial war on the country. Here are a few (there are many more where these came from):

25-30% of working age Greeks are unemployed (and that’s just official numbers), well over 1 million people; over 50% of young people are unemployed. Only one in ten unemployed Greeks receive an unemployment benefit (€360 per month), and only for one year. 9 out of 10 get nothing.

Which means 52% of Greek households are forced to live off the pension of an elderly family member. 60% of Greek pensioners receive pensions below €700. 45% of pensioners live below the poverty line with pensions below €665. Pensions have been cut some 12 times already. More cuts are in the pipeline.

40% of -small- businesses have said they expect to close in 2017. Even if it’s just half that, imagine the number of additional jobs that will disappear.

 

But the Troika demands don’t stop there; they are manifold. On top of the pension cuts and the primary surplus requirement, there are the tax hikes. So the vast majority of Greeks have ever less money to spend, the government takes money out of the economy to achieve a surplus, and on top of that everything gets more expensive because of rising taxes. Did I ever mention businesses must pay their taxes up front for a full year?

The Troika is not “rebalancing Greece’s public finances in a growth-friendly manner”, as Dijsselbloem put it, it is strangling the economy. And then strangling it some more.

There may have been all sorts of things wrong in Greece, including financially. But that is true to some degree for every country. And there’s no doubt there was, and still is, a lot of corruption. But that would seem to mean the EU must help fight that corruption, not suffocate the poor.

 


Yes, that’s about a 30% decline in GDP since 2007

 

The ECB effectively closed down the Greek banking system in 2015, in a move that’s likely illegal. It asked for a legal opinion on the move but refuses to publish that opinion. As if Europeans have no right to know what the legal status is of what their central bank does.

The ECB also keeps on refusing to include Greece in its QE program. It buys bonds and securities from Germany, which doesn’t need the stimulus, and not those of Greece, which does have that need. Maybe someone should ask for a legal opinion on that too.

The surplus requirements will be the nail in the coffin that do Greece in. Our economies depend for their GDP numbers on consumer spending, to the tune of 60-70%. Since Greek ‘consumers’ can only spend on basic necessities, that number may be even higher there. And that is the number the country is required to cut even more. Where do you think GDP is headed in that scenario? And unemployment, and the economy at large?

The question must be: don’t the Troika people understand what they’re doing? It’s real basic economics. Or do they have an alternative agenda, one that is diametrically opposed to the “rebalancing Greece’s public finances in a growth-friendly manner” line? It has to be one of the two; those are all the flavors we have.

You can perhaps have an idea that a country can spend money on wrong, wasteful things. But that risk is close to zilch in Greece, where many if not most people already can’t afford the necessities. Necessities and waste are mutually exclusive. A lot more money is wasted in Dijsselbloem’s Holland than in Greece.

In a situation like the one Greece is in, deflation is a certainty, and it’s a deadly kind of deflation. What makes it worse is that this remains hidden because barely a soul knows what deflation is.

Greece’s deflation hides behind rising taxes. Which is why taxes should never be counted towards inflation; it would mean all a government has to do to raise inflation is to raise taxes; a truly dumb idea. Which is nevertheless used everywhere on a daily basis.

In reality, inflation/deflation is money/credit supply multiplied by the velocity of money. And in Greece both are falling rapidly. The primary surplus requirements make it that much worse. It really is the worst thing one could invent for the country.

For the Greek economy, for its businesses, for its people, to survive and at some point perhaps even claw back some of the 30% of GDP it lost since 2007, what is needed is a way to make sure money can flow. Not in wasteful ways, but in ways that allow for people to buy food and clothing and pay for rent and power.

If you want to do that, taking 4% of GDP out of an economy, and 3.5% annually for years to come, is the very worst thing. That can only make things worse. And if the Greek economy deteriorates further, how can the country ever repay the debts it supposedly has? Isn’t that a lesson learned from the 1919 Versailles treaty?

The economists at the IMF and the EU/ECB, and the politicians they serve, either don’t understand basic economics, or they have their eyes on some other prize.

 

Sep 122016
 
 September 12, 2016  Posted by at 8:52 am Finance Tagged with: , , , , , , , , , , ,  6 Responses »


Harris&Ewing WSS (War Savings Stamps) poster, Washington DC 1917

Clinton Health Another Landmine for Suddenly Vulnerable Markets (BBG)
Asia Stocks, Bonds Sell-Off In Central Bank Anxiety Attack (R.)
Global Stocks Sink With Bonds, Commodities as Fed Angst Builds (BBG)
A ‘Perfect Storm’ In Stocks Is Coming, And Nothing Can Stop It (CNBC)
Goldman: We’ve Reached ‘Maximum’ Bullishness; Bad News for US Stocks (BBG)
Governments May Boost Fiscal Stimulus As Central Banks Step Back (CNBC)
Oil Prices Fall As US Drillers Add New Rigs, Long Positions Are Cut (R.)
Woes at Italy’s Biggest Bank Reverberate in Europe (WSJ)
Where Have The Jobs Gone? Australians Grapple With Less Work, Low Pay (R.)
EU/IMF Rift On Greek Debt Is Hurting Country, Says Tsipras (R.)
It’ll Take More Than Hanjin’s Crisis To Fix Shipping’s Overcapacity (CNBC)
Low-Income US Teens Often Forced To Trade Sex For Food (G.)

 

 

Markets are in for a huge US election shock. An apt question Mish asked: what was she doing running around in public with a potentially highly contagious disease? More on this later.

Clinton Health Another Landmine for Suddenly Vulnerable Markets (BBG)

Investors nursing wounds after the worst selloff in three months for equity and debt markets got another stress to ponder after concerns over Hillary Clinton’s health flared anew. The 68-year-old Democratic presidential nominee, whose polling edge over Donald Trump has soothed traders who fear ruptures to U.S. policy and see virtue in political gridlock, is suffering from pneumonia and became overheated and dehydrated during a Sept. 11 commemoration Sunday, forcing her to leave abruptly, her doctor said. Clinton was prescribed antibiotics and advised to modify her schedule so she can rest.

Volatility is already resurfacing in markets that had purred along for two months inured to everything from politics to weakening global growth, with the S&P 500 Index getting jarred Friday out of its tightest trading range ever in a selloff that erased about $500 billion of share value. While investors and analysts were reluctant to speculate on Clinton’s health, they said expectations she will prevail in November have been a factor in the calm and predicted the scrutiny will intensify. “If we found out that there was something catastrophic about her health it obviously would matter, but you have to be very careful about extrapolating shorter-term news,” Jonathan Golub at RBC Capital Markets in New York, said by phone.

“What we do know is we have two candidates around 70 years old and in reality it must be brutal running around the world for two years.” Speculation central banks are losing their taste for extra stimulus on Friday tore through the blanket of tranquility that has enveloped global markets. The S&P 500, global equities and emerging-market assets tumbled at least 2 percent in the biggest drop since Britain voted to secede from the European Union. The yield on the 10-year Treasury note jumped to the highest since June and the dollar almost erased a weekly slide.

Read more …

It’s Brainard day. From Friday: “..investors recoiled over news that the central bank’s most dovish official, Governor Lael Brainard, will be delivering a previously unannounced speech Monday..”

Asia Stocks, Bonds Sell-Off In Central Bank Anxiety Attack (R.)

Asian shares suffered their sharpest setback since June on Monday as investors were rattled by rising bond yields and talk the Federal Reserve might be serious about lifting U.S. interest rates as early as next week. Reports that the Bank of Japan was considering ways to steepen the Japanese yield curve, along with worries that central banks more generally were running short of fresh stimulus options, also hit sovereign debt and risk appetite globally. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 2.4%, pulling away from a 13-month peak. It was the largest daily drop since the frenzy caused by Britain’s vote in late June to leave the European Union. On a technical basis the index had been overbought in recent sessions, leaving it vulnerable to a pullback.

Shanghai followed with a fall of 2%, while Australian stocks sank 2.2%. The Nikkei 225 lost 1.9% as the safe haven yen firmed and selling in bonds drove yields on 20-year JGBs to the highest since March. Traders were unsure how the BOJ would try to steepen the yield curve if it goes down that path at a policy review later this month, but markets are worried that tapering of its buying in long-dated bonds could be among the options. EMini futures for the S&P 500, traded in Chicago during Asian hours, swung 0.6% lower, though Treasuries were finding safe-haven demand. Some Fed members have been trying to convince markets that the September meeting would be “live” for a hike, even though futures only imply a one-in-four chance of a move.

No less than three Fed officials are expected to speak later in the day, including board member and noted dove Lael Brainard. Any hint of hawkishness would likely further pressure bonds and equities.

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Angst alright.

Global Stocks Sink With Bonds, Commodities as Fed Angst Builds (BBG)

Global selloffs in stocks and bonds resumed Monday, while commodities slumped amid concern central banks in the world’s biggest economies are questioning the benefits of loose monetary policy. Shares in Europe and Asia dropped by the most since the aftermath of Brexit, and futures foreshadowed declines in U.S. equities. Portugese debt led losses among euro-area bonds, while yields in Australia and New Zealand climbed to their highest levels of the quarter. Oil sank to about $45 a barrel as nickel tumbled the most in four weeks. The yen strengthened and South Korea’s won tumbled. Financial markets have been jolted out of a period of calm by an uptick in concern over the outlook for central bank policies.

Federal Reserve Bank of Boston President Eric Rosengren spurred bets on an interest-rate hike on Friday, saying the U.S. economy could overheat should policy makers wait too long to tighten. The comments came a day after European Central Bank chief Mario Draghi surprised markets by playing down the prospect of further stimulus. The S&P 500 slumped 2.5% Friday, breaking out of a range that hadn’t seen it move more than 1% in either direction for 43 days. “Central banks are reluctant to add additional stimulus and that’s causing a lot of concern,” Niv Dagan, executive director at Peak Asset Management in Melbourne, told Bloomberg Radio. “We expect additional downside in the near term. You want to wait and see and remain cautious,” he said.

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“..I wouldn’t be surprised that we see some kind of repeat as we had towards the end of last year into January-February, which was something close to a 12% correction.”

A ‘Perfect Storm’ In Stocks Is Coming, And Nothing Can Stop It (CNBC)

A sharp stock market pullback is imminent, according to David Rosenberg, chief economist and strategist at Gluskin Sheff. On Friday, stocks were hammered by fears the Federal Reserve might hike rates sooner than expected, sending the S&P 500 index and the Dow Jones industrial average into a tailspin. According to Rosenberg, there’s more trouble ahead. “You have a perfect storm here if you get something like a Fed rate hike into the next several months,” Rosenberg said Thursday on CNBC’s “Futures Now. “The problem is that the market is not priced for it. I wouldn’t be surprised that we see some kind of repeat as we had towards the end of last year into January-February, which was something close to a 12% correction.”

Rosenberg, who has been named to the U.S. Institutional Investor All-America All Star Team several times in his career, doesn’t think the shake-up can be avoided. His reasoning doesn’t just include a potential Fed rate hike. He also takes into account a more richly valued stock market, signs of investor complacency and a sluggish U.S. economy. “We entered into the third quarter with momentum and a lot of hope, and now we’re exiting the third quarter,” he said. “And, let’s face it: The last five or six [economic] numbers have been really soft,” he contended. “The problem now, looking at where the market is priced, you’ve got cycle high multiples, you’ve got a lot of hedge funds in the futures options market that have been chasing performance here up to the price highs, and it doesn’t take much in the way of any sort of near-term adverse news to cause the market to correct.”

Read more …

“Where to Invest Now: None of the Above.”

Goldman: We’ve Reached ‘Maximum’ Bullishness; Bad News for US Stocks (BBG)

U.S. stocks have climbed many walls of worry as they marched to fresh all-time highs in 2016. But the market calm that characterized the summer also propelled investor enthusiasm to extremely elevated levels, according to Goldman Sachs Group Inc., which bodes ill for the near-term performance of equities. Goldman’s sentiment indicator, which tracks S&P 500 futures positioning, now stands at 100 – its maximum level. Readings above 90 or below 10 are contrarian indicators that are “significant in predicting future returns,” writes Chief U.S. Equity Strategist David Kostin in a note titled “Where to Invest Now: None of the Above.” This degree of enthusiasm “points to a 2% near-term S&P 500 fall,” he said.

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AKA: After central banks fail, governments have a go. But they are equally clueless.

Governments May Boost Fiscal Stimulus As Central Banks Step Back (CNBC)

Central banks have done bulk of the heavy lifting to boost growth since the global financial crisis, but economists now were expecting fiscal spending will get some life. Analysts and central bankers alike have talked up the benefits recently of letting the sun shine in on government spending after years of an austerity drumbeat amid an anaemic global recovery from the financial crisis. “Numerous central bankers, including Mario Draghi, have stressed that monetary policy alone cannot get the world out of its current malaise,” noted Andrew Kenningham, senior global economist at Capital Economics, in a note Wednesday.

“The U.S. Treasury Secretary, Jacob Lew, even claimed ahead of the G-20 summit in China last weekend that the U.S. had won the argument in favour of ‘growth rather than austerity’ and that this had prompted a policy shift by many G-20 governments.” That was in part due to the effects of long-running easing efforts by central banks, Kenningham noted. Many sovereigns have seen their bond yields turn negative, while smaller government budget deficits have reduced debt sustainability concerns, he said. “With global growth still lacklustre, monetary policy seemingly ineffective and government bond yields unprecedentedly low, the case for fiscal stimulus has become more compelling,” Kenningham said. “Partly as a result, we now expect advanced economies overall to benefit from a small fiscal boost in the next couple of years.”

Read more …

Oil is no longer an industry, it’s a gambling den.

Oil Prices Fall As US Drillers Add New Rigs, Long Positions Are Cut (R.)

Crude prices fell over 1.5% on Monday after U.S. oil drillers added rigs to look for new production as producers adapt to cheaper crude, with speculators cutting positions betting on further price rises. Brent crude futures were trading at $47.29 per barrel at 0200 GMT (10:00 p.m. EDT), down 72 cents, or 1.5%, from their last settlement. U.S. West Texas Intermediate futures were down 80 cents, or 1.74%, at $45.08 a barrel. Traders said the price falls on Monday and Friday were a result of increasing oil drilling activity in the United States, which indicated that producers can operate profitably around current levels.

“Each dollar is being used far more efficiently and, as a result, $50 oil appears much more palatable,” Barclays bank said in a note to clients. U.S. drillers added oil rigs for a tenth week in the past 11, according to a Baker Hughes rig count report on Friday. It was the longest streak without rig cuts since 2011. Speculative oil traders also became less confident of higher oil prices, cutting their net long U.S. crude futures and options positions for a second consecutive week last week, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. Oil’s near 5%price decline since Sept. 8 partly reverses a 10% rally early in the month, which was fueled by speculation that oil exporters could cap production.

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“Monte dei Paschi presented a plan in July to sell €28 billion of bad loans at 27% of face value. That has effectively set a new benchmark for the pricing of Italian bad loans..” But UniCredit expects to lose just 10%? Since UniCredit attributes a higher value to its bad loans, a sale of €20 billion of loans would force it to take €2 billion in write-downs…

Woes at Italy’s Biggest Bank Reverberate in Europe (WSJ)

For UniCredit, the summer of discontent for Italy’s banks looks likely to stretch well into the fall—and possibly beyond. UniCredit, Italy’s largest lender by assets, emerged as one of the weakest big banks in Europe in July’s stress tests, showcasing the failure of its attempts to respond to rock-bottom interest rates and a huge pile of bad loans. Now, as Jean-Pierre Mustier, the bank’s new CEO, readies a big-bang plan to revive UniCredit’s fortunes, he faces a series of unpalatable choices: Aggressive action to cut the bank’s €80 billion ($89.9 billion) in bad loans—the largest of any European bank—would force the Milanese bank to raise billions in fresh capital, while an asset sale could help bolster its capital position but would hurt already thin profit.

Meanwhile, the travails of Italy’s No. 3 lender, Banca Monte dei Paschi di Siena, promise to only complicate Mr. Mustier’s job. On Thursday, Monte dei Paschi said its CEO, Fabrizio Viola, had agreed with the bank’s board to resign, in a surprise move that came as that bank works on a plan to shed €28 billion in bad loans. Troubles at UniCredit, which has a vast business in Germany and Eastern Europe, could threaten not only Italy’s ailing economy but also the continent’s already fragile financial stability. Brexit has upended Europe’s status quo, making the financial system more sensitive to shocks. Investors are watching UniCredit closely, as they expect its fate to affect both Italy and potentially other lenders on the continent.

[..] A major move to unload bad loans, perhaps as much as €20 billion, “will be key for a rerating of the stock,” said Vicenzo Longo at IG Markets. However, Monte dei Paschi presented a plan in July to sell €28 billion of bad loans at 27% of face value. That has effectively set a new benchmark for the pricing of Italian bad loans. Since UniCredit attributes a higher value to its bad loans, a sale of €20 billion of loans would force it to take €2 billion in write-downs…

Read more …

Quality vs quantity. If it can hide reality in the US, it can do so in Oz.

Where Have The Jobs Gone? Australians Grapple With Less Work, Low Pay (R.)

While the unemployment rate in Australia has been relatively stable, at 5.7% in July, there is a historically high underemployment rate – people who want to work more – of 8.5%. Combined, the measures lead to an underutilisation rate of 14.2%, much higher than during the global financial crisis and a worrying trend for the Reserve Bank of Australia (RBA). That spare capacity in the labor market limits the ability of workers to push for pay rises, and feeds through to muted demand and confidence. If this trend persists, the RBA could be forced to lower rates again after already easing twice this year. Indeed, wages growth is already at record lows while inflation is likely to remain below the central bank’s target band of 2-3% until 2018.

“For that to turn around you need to see a pick-up in domestic demand,” said Gareth Aird, senior economist at Commonwealth Bank. “We have cash rates down to 1.5% and we’re still not seeing a pick-up in wages or inflation. We probably need to see a pick-up in investment in order to see full-time employment materially lift.” For policymakers – unable to do much in the face of slow global demand – the low business investment is a particularly worrying phenomenon, especially as the end of the mining boom and a slowdown in major trading partner China leave corporate managers leery about spending on new projects. Indeed, latest data showed business investment tumbled in the June quarter as miners continued to cut back while spending plans slipped 9%.

Read more …

The Troika enjoys its stranglehold on an entire people.

EU/IMF Rift On Greek Debt Is Hurting Country, Says Tsipras (R.)

A rift between the IMF and the EU on how to address Greece’s debt crisis is damaging for the country, Prime Minister Alexis Tsipras said on Sunday. “I would say that what is creating conditions of delay in regaining trust of markets and investors … is the constant clash and disagreement between the IMF and European institutions,” Tsipras told a news conference in the northern city of Thessaloniki. The IMF has yet to decide whether to participate in a third international bailout Greece signed up to in mid-2015, saying it is not convinced its debt is sustainable. The country’s current debt to GDP ratio exceeds 170% of national output, the highest in the eurozone. Tsipras said disagreements between the EU and the IMF was preventing timely participation of the country in the quantitative easing program of the ECB. “A country which has made such harsh adjustment cannot wait much more… It is entitled to a fair regulation of the debt issue. The Greek problem is a European problem,” Tsipras said.

Read more …

No-one’s ever considered that trade was a bubble?!

It’ll Take More Than Hanjin’s Crisis To Fix Shipping’s Overcapacity (CNBC)

The crisis surrounding Hanjin Shipping has rocked the industry, but even more shipping lines could find themselves in trouble thanks to the huge amount of overcapacity in the industry, warns the CEO of a logistics company. Hanjin, which had around 3% of market share in shipping, filed for court receivership at the end of August, which has meant that its ships have been denied access to ports and, in some cases, have been seized. One result of Hanjin’s troubles is that shipping rates have spiked. Prices for shipments between Asia and the U.S. have risen 50% through September, according to data from Freightos, an online shipping rate marketplace. However, this is likely to prove temporary, as prices will fluctuate and currently empty container slots are brought into use, the company added.

Not only have shipping rates risen, but companies which were using Hanjin have received charges from some ports, according to Philip Damas, director for supply chain advisors at Drewry. “Some ports have imposed surcharges on exporters and importers who used Hanjin as a carrier and are waiting for their products in the destination port to cover the port costs unpaid by Hanjin. This is also increasing exporters’ costs,” he told CNBC in an email. Hanjin has been a shock to the system, but a glut in the number of ships carrying goods around the world is still an issue, warns Dr. Zvi Schreiber, CEO of Freightos, an online logistics marketplace. “There has been a significant overcapacity, which is why rates have been so low and that’s why Hanjin went bankrupt in the first place, but it’s not clear if that’s enough..”

Read more …

A curious article on a curious report. I don’t quite know what to make of it.

Low-Income US Teens Often Forced To Trade Sex For Food (G.)

Teenagers in America are resorting to sex work because they cannot afford food, according to a study that suggests widespread hunger in the world’s wealthiest country. Focus groups in all 10 communities analysed by the Urban Institute, a Washington-based thinktank, described girls “selling their body” or “sex for money” as a strategy to make ends meet. Boys desperate for food were said to go to extremes such as shoplifting and selling drugs. The findings raise questions over the legacy of Bill Clinton’s landmark welfare-reform legislation 20 years ago as well as the spending priorities of Congress and the impact of slow wage growth. Evidence of teenage girls turning to “transactional dating” with older men is likely to cause particular alarm.

“I’ve been doing research in low-income communities for a long time, and I’ve written extensively about the experiences of women in high poverty communities and the risk of sexual exploitation, but this was new,” said Susan Popkin, a senior fellow at the Urban Institute and lead author of the report, Impossible Choices. “Even for me, who has been paying attention to this and has heard women tell their stories for a long time, the extent to which we were hearing about food being related to this vulnerability was new and shocking to me, and the level of desperation that it implies was really shocking to me. It’s a situation I think is just getting worse over time.”

The qualitative study, carried out in partnership with the food banks network Feeding America, created two focus groups – one male, one female – in each of 10 poor communities across the US. The locations included big cities such as Chicago, Los Angeles and Washington and rural North Carolina and eastern Oregon. A total of 193 participants aged 13 to 18 took part and were allowed to remain anonymous. Their testimony paints a picture of teenagers – often overlooked by policymakers focused on children aged zero to five – missing meals, making sacrifices and going hungry, with worrying long-term consequences. Popkin said: “We heard the same story everywhere, a really disturbing picture about hunger and food insecurity affecting the wellbeing of some of the most vulnerable young people.”

Read more …

Aug 272016
 
 August 27, 2016  Posted by at 9:22 am Finance Tagged with: , , , , , , , ,  10 Responses »


Jack Delano Mother of three, wiper at the roundhouse. Chicago & North Western R.R.” 1943

America’s Biggest Economic Problem: Nobody Is Investing For Tomorrow. (MW)
The Stimulus Our Economy Needs (Da Costa)
Grim Employment Prospects For Young People Around The World (Economist)
Fed’s Jackson Hole Circus
Bill Gross Says Yellen’s Economy ‘May Never Walk Normally Again’ (BBG)
Losses Piling Up for S&P 500 as Weekly Drop Is Worst Since June (BBG)
World’s Biggest Pension Fund Loses $52 Billion in Q2 Stock Rout (BBG)
Why No One Trusts China’s Markets (Balding)
Theresa May Will Trigger Brexit Negotiations Without Commons Vote (Tel.)
BleachBit Brags It “Stifled FBI Investigation” Of Hillary Clinton (ZH)
Majority Of Greek Properties Valued Under €50,000 (Kath.)
We Don’t Know What We Are Talking About When We Talk About Religion (Taleb)

 

 

“America’s Investment In Its Own Future Is In A Depression”. As epitomized by share buybacks. Which in turn are simply an expression of ‘the thing that shall not be mentioned’: a lack of confidence in growth, and in the economy as a whole. Why invest when there will be no return?

America’s Biggest Economic Problem: Nobody Is Investing For Tomorrow. (MW)

The U.S. economy, by some measures, has recovered from the Great Recession: The unemployment rate is only half what it was at the worst, real gross domestic product is about 10% larger than the previous peak, and personal wealth has risen by more than $20 trillion as the stock market and the housing market have bounced back. But everyone knows the recovery has been uneven. Total employment may have grown by 6 million since the recession began in 2008, but employment in manufacturing is down nearly 1.5 million. Real disposable incomes may be up by 16%, but because most of the increase has been captured by the richest sliver of society, the median family’s annual inflation-adjusted income is still down more than $3,000.

Most troubling, there’s still very little investment in the buildings, equipment and intellectual property that we ought to be putting into place today as the foundation of our prosperity tomorrow. Who’s preparing the United States for the 21st century? Nobody, really. Not the 22 million private businesses, not the 118 million households, and not the 90,000 state, local or federal government agencies. Since the recession, investments have fallen sharply, and they haven’t gotten back up again. It seems that everyone is still scarred by the Great Recession, and by the collapse of asset bubbles in 2000 and 2006. Gross domestic investment totaled about $3.6 trillion in the second quarter of 2016, about 20% of gross domestic product. That may seem a large sum, but it’s the lowest share of GDP, except during recessions, since 1947.

And, unfortunately, even that weak number grossly exaggerates the actual contribution of this investment in creating new productive capacity for the economy. Why is the figure exaggerated? Because these data are reported on a gross basis, without subtracting the depreciation of capital assets such as equipment, buildings, software and the like. After you subtract the capital that’s used up, net investment totaled only about $750 billion in the second quarter, or 4% of GDP, about half of the average over the post-war period. In fact, net investment has been running at the lowest rates since the Great Depression of the 1930s, suggesting that U.S. investment itself is in a depression.

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Makes some sense, but relies too much on the assumption that policy makers know what they do. They don’t.

The Stimulus Our Economy Needs (Da Costa)

All told, nearly 9 million jobs were lost during the 2007-2009 slump, not counting the new jobs that were needed to keep up with population growth. The unemployment rate more than doubled to a peak of 10.2% in October 2009 and took seven years to get back to around 5%, seen as normal. Even the current 4.9% rate is seen as a poor depiction of the U.S. labor market’s actual ongoing weakness. So what would a constructive pro-jobs policy of employment insurance look like? It could take many forms, and, despite any central bank role in funding the stimulus, the decision on how to spend the money would remain fully accountable to the democratic process — in the hands of elected lawmakers.

One approach might see Congress adopt a mandate similar to the one it assigned the Fed itself — to maintain low and stable prices while striving for maximum sustainable employment. Such a goal would offer clearer guidelines for when a program of budget spending aided by central bank intervention might be needed, like determining what thresholds of economic pain might trigger its launch. Rather than relying on a spotty, limited system of jobless benefits that can leave the unemployed in or close to poverty, wouldn’t it be better to directly create government jobs in areas where the private sector appears to be falling short?

Employer-of-last-resort-type policies, as proposed by the economist Hyman Minsky, where the government generates employment in socially useful sectors that are underserved by the private sector alone — including infrastructure, education, health care, child and elderly care, and the arts — could be optimal. After all, most people would agree instinctively with Article 23 of the Universal Declaration of Human Rights, adopted by the U.N. in 1948, which states, “Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.”

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Same difference: no investments in the future.

Grim Employment Prospects For Young People Around The World (Economist)

A new report from the International Labour Organisation has provided a snapshot of job prospects for young people around the world. Things have worsened this year following a period of slight improvement. Unemployment among 15-24-year-olds has risen to 13.1% in 2016 and is close to its historic peak of 2013. The rate is highest in Arab countries, at 30.6%, and lowest in East Asia, at 10.7%. The report also finds that even where jobs are available to young people, they often fail to provide secure incomes.

Youth unemployment is typically lower in poorer countries than in rich ones. This is because workers in less-developed countries have to take work just to make ends meet and, with few choices, end up in low-paid jobs with no security. Even in richer countries, the young often end up in less-secure employment than the older generation. In 2015, 25% of young workers in OECD countries were in temporary jobs and 26% were employed part-time, often on an involuntary basis. Those rates are more than twice as high as for workers aged 25 to 54.

In fact, young people with jobs are now at greater risk of living in poverty than the elderly in some rich countries. This is especially true in places where there has been a sharp economic shock, such as Greece, Romania and Spain. The need to work to supplement household income in the short-term creates a vicious cycle in which the young forgo training in the skills required for better long-term job prospects. Given the bleak future faced by many, it is little surprise that 40% of 15-29-year-olds in Africa, eastern Europe and Latin America would countenance a permanent move abroad.

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“Friday, almost six years to the day, marked the anniversary of former Fed Chairman Ben Bernanke’s address to the Jackson Hole confab, at which he outlined the second phase of quantitative easing [..] Since then, Wilshire Associates estimates the value of U.S. equities has increased by over 100%, some $13.3 trillion..”

Fed’s Jackson Hole Circus

The Fed has fueled the populism that has thrown this year’s U.S. elections into an unprecedented tizzy, the Journal wrote in more considered terms in a page-one feature on Friday. While the central bank dealt forcefully with the 2007-08 financial crisis, it failed to anticipate it and subsequently failed to bring about a recovery worthy of the name. What it has accomplished is a massive inflation, not of consumer prices—as officially measured, at least—but of asset prices. Friday, almost six years to the day, marked the anniversary of former Fed Chairman Ben Bernanke’s address to the Jackson Hole confab, at which he outlined the second phase of quantitative easing (central bank–speak for securities purchases to pump money into the financial system), which was popularly dubbed QE2.

Since then, Wilshire Associates estimates the value of U.S. equities has increased by over 100%, some $13.3 trillion. Since Bernanke outlined QE3 in September 2012, U.S. equities are up about 50%, or $8.6 trillion, by Wilshire’s reckoning. In the process, interest rates have hovered at or near record-low levels, tonic for asset values but poison for savers. The uneven impact of the Fed’s policies among the haves and have-nots has further stoked resentment against the monetary authorities. Low yields and inflated asset prices mean modest future returns for all. But though it is equally illegal for the beggar and the king to sleep under the bridge, low returns are less of a burden for those who have already accumulated wealth than for those who have not.

None of this sociology and politics should influence the Fed, but it is an inescapable backdrop to policy decisions. Based on the data on which the central bank professes to depend, the “case for an increase in the federal-funds rate has strengthened in recent months,” Yellen said in her much-anticipated address to the Jackson Hole gathering.

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“Credit-enhanced cycles come to worse ends than the normal kind.”

Bill Gross Says Yellen’s Economy ‘May Never Walk Normally Again’ (BBG)

Bill Gross, the billionaire Janus Capital Group Inc. money manager, criticized Fed Chair Janet Yellen’s suggestion that she could consider further asset purchases as the equivalent of “providing a walker or a wheelchair for an ailing economy.” Yellen, speaking Friday at a conference of central bankers and economists in Jackson Hole, Wyoming, said while the U.S. economy has strengthened to the point that interest rate hikes are possible, further asset purchases must remain part of the Fed’s toolkit. Gross, who runs the $1.5 billion Janus Global Unconstrained Bond Fund, has long criticized central bankers in the U.S., Europe and Japan for keeping interest rates ultra-low and artificially inflating asset prices without adding sustainable economic growth.

“She is opening the door to creating even greater asset bubbles as have the BOJ and ECB and SNB by purchasing corporate bonds and stocks,” Gross wrote Friday in an e-mail response to questions. “This is not capitalism. This is providing a walker or a wheelchair for an ailing economy. It may never walk normally again if monetary policy continues in this direction.” Gross said Yellen’s comments didn’t take a September rate hike off the table, especially if job growth is healthy. The Labor Department reports August employment data on Sept. 2. The probability of a hike at the Sept. 21 Fed meeting has risen to 38% from 15% two weeks ago, according to data compiled by Bloomberg.

“To the extent that next month we see a decent job growth number, then I think for sure or close to for sure, you know, in September we’re going to see a Fed hike of 25 basis points,” Gross said in an interview on CNBC. “The market hadn’t expected that.” Tad Rivelle, chief investment officer of fixed income at TCW Group, warned that central bank intervention to keep rates low and prop up asset prices may worsen the impact of an inevitable end to the current credit cycle. “Every cycle in human history has ultimately come to an end,” Rivelle, who helps oversee $195 billion for TCW, said in a Bloomberg Television interview Friday. “Credit-enhanced cycles come to worse ends than the normal kind.”

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“Not since the presidential administration of Lyndon B. Johnson have stocks done so little for so long.”

Losses Piling Up for S&P 500 as Weekly Drop Is Worst Since June (BBG)

What had been just a sleepy August is turning into an increasingly painful one for U.S. equity market bulls. Notwithstanding an hour-long burst of optimism that followed Federal Reserve Chair Janet Yellen’s policy speech Friday, the buoyancy that lifted stocks for the first half of the summer has now been missing for the better part of a month. The S&P 500 Index fell 0.7% to 2,169.04 this week, the biggest drop since June, to erase its August gains. Not since the presidential administration of Lyndon B. Johnson have stocks done so little for so long. Unable to break out of a 1.5% band for more than 30 days, the market is locked in its tightest trading range since the end of 1965 amid confusion about Federal Reserve policy and the outlook for earnings.

While losses remain tiny day to day, they’re starting to pile up, with the S&P 500 declining in five of the last six sessions. The Dow Jones Industrial Average slipped 157.17 points in the week to 18,395.4, while the Nasdaq Composite Index retreated 0.4% to 5,218.92. At about 5.8 billion shares, daily volume in U.S. exchanges was lower this week than in any non-holiday period since June 2015. “Once we dug into the report from Yellen, it was kind of a non-event, and we’re ending in the same range we started the week,” Chris Gaffney, president of world markets at St. Louis-based EverBank, said by phone. “The data we got this week was mixed. There’s no clear direction and that’s why we’re sitting in these ranges.”

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Guess the Japanese simply don’t understand what Abe does to their pensions.

World’s Biggest Pension Fund Loses $52 Billion in Q2 Stock Rout (BBG)

The world’s biggest pension fund posted a $52 billion loss last quarter as stocks tumbled and the yen surged, wiping out all investment gains since it overhauled its strategy by boosting shares and cutting bonds. Japan’s Government Pension Investment Fund lost 3.9%, or 5.2 trillion yen ($52 billion), in the three months ended June 30, reducing assets to 129.7 trillion yen, it said in Tokyo on Friday. That erases a 4.1 trillion yen investing return for the previous six quarters starting October 2014, the month it decided to put half its assets into equities. The quarterly decline follows a 5.3 trillion yen loss in the fiscal year through March, the worst annual performance since the global financial crisis.

After benefiting from a surge in Japanese equities and a weaker yen earlier in Prime Minister Shinzo Abe’s term, GPIF has posted losses as domestic stocks tumble and gains in the currency reduce the value of overseas assets. Still, for Sumitomo Mitsui Trust Bank Ltd., that’s no reason to veer from the current approach. “Since its investments are tied to market moves, it’s natural that this would happen and there’s no point looking at it with a short-term view,” said Ayako Sera, a Tokyo-based market strategist at the bank. “GPIF is so big that its losses look huge even though the fluctuations in its investments just mirror the market.”

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“Regulators assess a company’s balance sheet and history, mandate an offering price, and then let the market figure out who might be lying or hiding things.”

Why No One Trusts China’s Markets (Balding)

When China’s top securities regulator said recently that it plans to delist Dandong Xintai Electric for falsifying initial public offering documents, it didn’t grab many headlines. But it suggested some far-reaching changes may be afoot. Xintai is the first company to be expelled from Shenzhen’s ChiNext board for such an offense, and one of only a handful that have ever been delisted in China. Its expulsion suggests that regulators are facing up to some unfortunate truths about China’s capital markets. Those markets are, in important ways, only superficially market-like. In the stock market, the government has intervened on a huge scale to prop up prices. Investment in the bond market is overwhelmingly directed to state-owned enterprises. There’s no derivatives market to speak of.

Financial disclosures are often implausible, suspicions of insider trading are rife and doubts about corporate governance are widespread. All these are symptoms of a common ailment: a regulatory system focused not on disclosure and market mechanics but on setting asset prices and allocating returns. In most countries, when companies are considering an IPO, regulators require them to accurately disclose information, then let markets dictate prices. In China, the reverse holds true: Regulators assess a company’s balance sheet and history, mandate an offering price, and then let the market figure out who might be lying or hiding things. The result is that investors, both domestic and foreign, have lost confidence in China’s markets.

Foreign portfolio investment into China is down 60%, year over year, through July. MSCI has repeatedly declined to include China’s domestic equities in its benchmark indexes. Even the much-celebrated Chinese retail investor is staying on the sidelines: Individual investment accounts holding less than 500,000 yuan declined to 46.8 million last month, from 47.4 million in July 2015. This credibility deficit affects all areas of the markets. Major Chinese commercial banks have been trading at a price-to-equity ratio of about five – compared to an average of about 12 for commercial banks elsewhere – because investors think their loan portfolios are much worse off than they’re letting on.

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Somone will try to stop her.

Theresa May Will Trigger Brexit Negotiations Without Commons Vote (Tel.)

Theresa May will not hold a parliamentary vote on Brexit before opening negotiations to formally trigger Britain’s withdrawal from the European Union, The Telegraph has learned. Opponents of Brexit claim that because the EU referendum result is advisory it must be approved by a vote in the Commons before Article 50 – the formal mechanism to leave the EU – is triggered. However, in a move which will cheer Eurosceptics, The Telegraph has learned that Mrs May will invoke Article 50 without a vote in Parliament It had been suggested – by Tony Blair, the former Labour Prime Minister, and Owen Smith, the Labour leadership candidate, among others – that Remain-supporting MPs could use a Parliamentary vote to stop Brexit.

But sources say that because Mrs May believes that “Brexit means Brexit” she will not offer opponents the opportunity to stall Britain’s withdrawal from the EU. A Downing Street source said: “The Prime Minister has been absolutely clear that the British public have voted and now she will get on with delivering Brexit.” Mrs May has consulted Government lawyers who have told the Prime Minister she has the executive power to invoke Article 50 and begin the formal process of exiting the European Union without a vote in Parliament. Her decision will come as a blow to Remain campaigners, who had been hoping to use Parliament to delay or halt Brexit entirely.

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And it will yet get crazier.

BleachBit Brags It “Stifled FBI Investigation” Of Hillary Clinton (ZH)

Yesterday we noted that South Carolina Representative Trey Gowdy revealed that Hillary had used a software called “BleachBit” to wipe her servers clean. Gowdy, appearing on Fox News, suggested that using a software like “BleachBit” undermines her claims that she only deleted innocuous “personal” emails from her private server. Specifically, Gowdy told Fox News:

“If she considered them to be personal, then she and her lawyers had those emails deleted. They didn’t just push the delete button, they had them deleted where even God can’t read them. “They were using something called BleachBit. You don’t use BleachBit for yoga emails.” “When you’re using BleachBit, it is something you really do not want the world to see.”

Now, the BleachBit team is using the whole controversy as a marketing tool with a note on their website entitled “BleachBit stifles investigation of Hillary Clinton.” The site even incorporates the now-famous Clinton gaffe where she asked reporters if they wanted to know whether she had wiped her servers clean “like with a cloth or something” pointing out that “it turns out now that BleachBit was that cloth.”

Last year when Clinton was asked about wiping her email server, she joked, “Like with a cloth or something?” It turns out now that BleachBit was that cloth.

The BleachBit team also points out that they have not been served with any warrants or subpoenas at this time even though it doesn’t really matter because the “cleaning process is not reversible.”

As of the time of writing BleachBit has not been served a warrant or subpoena in relation to the investigation. BleachBit is free of charge to use in any environment whether it is personal, commercial, educational, or governmental, and the cleaning process is not reversible.

Finally, BleachBit points out they’re receiving overwhelming interest from folks looking to permanently erase yoga and bridesmaid emails and/or other similar incriminating information.

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Compare that to other EU nations.

Majority Of Greek Properties Valued Under €50,000 (Kath.)

74% of real estate owners in Greece have property whose taxable value does not exceed 100,000 euros, according to data published on Friday by the Finance Ministry. More precisely, one in two own property that is valued by tax authorities at 50,000 euros or less, while just 8% of real estate owners have property worth between 100,000 and 200,000 euros. The total taxable value of the properties owned by the two groups has been calculated by the ministry, respectively, at 63.6 billion euros and 132 billion euros.

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Taleb targets Salafism.

We Don’t Know What We Are Talking About When We Talk About Religion (Taleb)

People rarely mean the same thing when they say “religion”, nor do they realize that they don’t mean the same thing. For early Jews and Muslims, religion was law. Din means law in Hebrew and religion in Arabic. For early Jews, religion was also tribal; for early Muslims, it was universal[i]. For the Romans, religion was social events, rituals, and festivals –the word religio was a counter to superstitio, and while present in the Roman zeitgeist had no equivalent concept in the Greek-Byzantine East[ii]. Law was procedurally and mechanically its own thing, and early Christianity, thanks to Saint Augustine, stayed relatively away from the law, and, later, remembering its foundations, had an uneasy relation with it. For instance, even during the Inquisition, a lay court handled the sentencing.

The difference is marked in that Christian Aramaic uses a different word: din for religion and nomous (from the Greek) for law. Jesus, with his imperative “give to Caesar what belongs to Caesar”, separated the holy and the profane: Christianity was for another domain, “the kingdom to come”, only merged with this one in the eschaton. Neither Islam nor Judaism have a marked separation between holy and profane. And of course Christianity moved away from the solely-spiritual domain to embrace the ceremonial and ritualistic, integrating much of the pagan rites of the Levant and Asia Minor.

For Jews today, religion became ethnocultural, without the law – and for many, a nation. Same for Syriacs, Chaldeans, Armenians, Copts, and Maronites. For Orthodox and Catholic Christians religion is aesthetics, pomp and rituals, plus or minus some beliefs, often decorative. For most Protestants, religion is belief with neither aesthetics, pomp nor law.

Further East, for Buddhists, Shintoists and Hindus, religion is practical and spiritual philosophy, with a code of ethics (and for some, cosmogony). So when Hindu talk about the Hindu “religion” they don’t mean the same thing to a Pakistani as it would to a Hindu, and certainly something different for a Persian. When the nation-state idea came about, things got much, much more complicated. When an Arab now says “Jew” he largely means something about a creed; to Arabs, a converted Jew is no longer a Jew. But for a Jew, a Jew is someone whose mother is a Jew. (This has not always been the case: Jews were quite proselytic during the early Roman empire). But Judaism, thanks to modernism, somewhat merged into nation-state, and now can also mean a nation.

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