May 312023
 


John Singer Sargent Palmettos, Florida 1917

 

NATO Is Creating Another Battlefield On European Continent (GT)
NATO Is ‘Escalation Factor’ In Kosovo – Moscow (RT)
Maidan-Style Coup Attempt Unfolding In Belgrade — Russian Ambassador (TASS)
NATO To Send More Troops To Kosovo Following Clashes (RT)
Another Strike on Vladimir Putin? (GP)
US ‘Encourage’ Ukraine To Attack Russia – Ambassador (RT)
Russia Will Be Appropriately Represented At BRICS Summit – Kremlin (RT)
Oil Flows Can Only Be Redirected, Not Stopped (Slav)
Pfizer, the EU, and Disappearing Ink (Pol.eu)
Growing List of Whistleblowers Reporting Reprisal Under Biden Admin (ET)
New Insight into Hunter Biden and his Collapsing World of Corruption (Turley)
Jim Rogers Is Bracing For The Worst Bear Market Of His Life (BI)
Student Loans Represent 7% of US GDP (ZH)
Greece and Poland Join Forces to Seek German War Reparations (GR)
Donald Trump, Pence’s Taskforce, and DeSantis’s Revisionist Attacks (NP)
‘Swiftboating America’ (Mahncke)

 

 


Former Ukraine PM AZAROV: “Over the years, presidents of Ukraine made promises to turn the country into a new France or a new Switzerland. Zelensky went further than anyone and turned the country into a new Afghanistan, to the delight of the Anglo-Saxons and defense companies.”

 

 

Putin: NOT geopolitics

 

 

 

 

Lavrov genocide
https://twitter.com/i/status/1663332335620874240

 

 

 

 

RFK Ukraine
https://twitter.com/i/status/1663573559044702210

 

 

 

 

Kiev supermarket
https://twitter.com/i/status/1663363631520661504

 

 

Carrey

 

 

Sources in Kiev said that as a result of a strike on a military facility on Rybalsky Island, one of the control centers was hit. With the beginning of the air raid, the personnel of the center descended into the shelter, but the Russian Aerospace starwars Forces used a missile with a penetrating warhead, which pierced through the building, penetrated the foundation and exploded, destroying the shelter, where at that moment there were up to a hundred officers of the Armed Forces of Ukraine and civilian personnel, including twenty foreign military from the USA and Great Britain, who interacted between the Center and similar Western headquarters. A rescue operation was immediately launched. Its results are unknown, but, according to the call center of the Kiev “Ambulance”, more than ten cars were immediately pulled there and about thirty flights were made. On the same evening, two helicopters urgently took off from Kiev towards the border with Poland.

 

 

 

 

Two different fronts: Kosovo and Belgrade. This is from China’s Global Times:

NATO Is Creating Another Battlefield On European Continent (GT)

The situation in the Balkans is now at an explosive point. KFOR, the NATO-led peacekeeping force in Kosovo, clashed with Serb protesters on Monday. The tension arose after ethnic Albanian mayors took office in northern Kosovo’s Serb majority area after April elections that the Serbs boycotted. Kosovo and Serbia have long-running tensions. Kosovo was originally an autonomous province of Serbia in the former Yugoslavia. With the support of the US and the West, Kosovo has been seeking to move further on the road of “independent statehood” and adopted a hardline attitude toward Serbia. NATO’s involvement has further exacerbated the rift between Kosovo and Serbia, leading to military conflicts between the two sides and undermining the peace and unity of the Western Balkans.

As the situation escalates, NATO chief Jens Stoltenberg has called on Kosovo to tone down tensions with Serbia. But it remains doubtful if NATO truly wants to stop the conflict. The NATO-led multinational contingents were deployed to four municipalities in Kosovo to contain “violent demonstrations” as “newly elected mayors in recent days tried to take office,” KFOR said in a statement. NATO calls for easing tensions on one hand, but on the other hand, increases military presence. It seems that NATO is just buying time to arm Kosovo, analysts argued. From its past wars, it’s clear the US is quite good at pretending fairness in stopping a fight while helping one side, buying time for those it supports by calling for a ceasefire. The promises made by NATO and other Western countries to protect the Serbs in Kosovo simply cannot be fulfilled. An article in the Financial Times said that the West’s push to heal the divide between Serbia and Kosovo is ill-fated.

Song Zhongping, a Chinese military expert and TV commentator, told the Global Times that NATO forces did not truly engage in peacekeeping in Serbia and Kosovo, but rather aimed to maintain the basic fact of “Kosovo’s independence” and helped Kosovo oppress Serbs. Serbia’s sovereignty and national security aren’t NATO’s priority. “The Russia-Ukraine conflict has not yielded any results for peace, and there is a possibility of escalation. The possibility of renewed conflict in the Balkans also exists. Because the Russia-Ukraine conflict has not achieved the desired effect for the US, Washington needs to create a new war on the European continent,” Song said. From the perspective of the US, the country is not concerned about the possibility of more wars breaking out in Europe, as it is not directly involved in the region. Washington can withdraw its military forces at any time.

Washington actually hopes to see chaos in Europe, as well as the mess of the European economy and Europe’s dependence on the US. The US does not want a united and strong Europe to exist. Meanwhile, as the Russia-Ukraine conflict has consumed much of the US energy and resources, the US is likely to view the worsening rift between Serbia and Kosovo as an opportunity that it can take advantage of to weaken Russia’s influence in Serbia and the Balkans. The ultimate goal of the US is to have both Europe and Russia suffer losses, which is more in line with its global strategy and hegemonic interests. Now the US sees Europe as two powder kegs, one in a hot war and one about to explode. In Washington’s eyes, Europe’s crisis is an opportunity for the US to take advantage of.

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“Not only have they shown their incompetence … [they] themselves became a source of unnecessary violence, an escalation factor..”

NATO Is ‘Escalation Factor’ In Kosovo – Moscow (RT)

Instead of defusing hostilities between the local authorities and the Serbian ethnic majority in the northern part of Kosovo, NATO troops have only exacerbated the unrest, Russian Foreign Ministry spokeswoman Maria Zakharova said in a statement on Tuesday. Zakharova pointed out that the situation in the area had reached “a critical red line.” She was referring to violent clashes between local Serbs and NATO’s Kosovo Force (KFOR) that erupted after the bloc’s soldiers attempted to disperse demonstrators that were protesting against the inauguration of the new mayor of the Albanian ethnicity. The stand-off resulted in dozens of injuries on both sides. The unrest came after local Serbs, who have long sought for more autonomy, boycotted Pristina-backed elections in the northern part of Kosovo.

Despite a turnout of less than 4%, local authorities treated them as legitimate, resulting in the election of four ethnically Albanian mayors. Zakharova argued that the crisis in Kosovo, which could be resolved peacefully, turned out to be “a nut too hard to crack” for NATO service members. “Not only have they shown their incompetence … [they] themselves became a source of unnecessary violence, an escalation factor,” the spokeswoman claimed. As a result, those who were charged with protecting Serbs from this crackdown, “supported Pristina’s xenophobic aspirations, basically turning into terror accomplices” by defending local authorities, she said. The spokeswoman also urged the West to “silence its false propaganda” and stop accusing desperate Serbs of provoking incidents when they were just trying to defend their legitimate rights in a peaceful manner.

“While looking for the guilty, mediators from the US and the EU should muster up some courage and look in the mirror,” the official stated. “To de-escalate, decisive steps are needed, and not half-measures like an idea proposed by the US to temporarily ‘move’ the newly-minted ‘mayors’ from municipal buildings to other facilities,” Zakharova stressed, adding that those steps may include the creation of an association of Serbian municipalities in Kosovo. The region unilaterally declared independence in 2008 with the support of the US and many of its allies. It is not recognized by several countries, including Russia, China, and Serbia itself.

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Promises were made to the Serbs in Kosovo, and not kept. Sound familiar? If you base your far-reaching actions on “elections” with a turnout under 4%, then yes, you will have trouble.

Maidan-Style Coup Attempt Unfolding In Belgrade — Russian Ambassador (TASS)

Serbian President Aleksandar Vucic’s opponents are trying to stage a Maidan-style coup (the term “Maidan” was coined after Kiev’s central Independence Square, or Maidan Nezalezhnosti, to refer to anti-government riots) in the capital, Russian Ambassador to Serbia Alexander Botsan-Kharchenko said on Tuesday. “This is part of the hybrid war. I would like to stress that anti-Belgrade forces acted almost synchronously; they operate on two fronts – this is the situation in Kosovo and attempts at a Maidan coup here, in Belgrade,” he said. An anti-government rally was held in Belgrade on May 28. The protesters gathered near the building of Serbia’s national broadcaster. It was the fourth protest rally in the past month. Grass-roots demonstrations under the slogan Serbia Against Violence were held in Belgrade on May 8, 12, and 19 following two shootings that occurred on consecutive days in the country on May 3 and 4.


The first was a school shooting in Belgrade where ten people died and seven were wounded, followed up by eight people being killed and 14 wounded by an armed man in Mladenovac the next day. People demanded the resignation of Interior Minister Bratislav Gasic and chief of the Security Information Agency Aleksandar Vulin. Apart from that, the demonstrators insisted that some pro-government media propagating violence and hatred be shut down. The first rally was quite peaceful, with practically no anti-government slogans. People were simply congregating in silence in front of the parliamentary building. During the second rally, protesters blocked a bridge across the Sava River and chanted anti-government slogans. The third demonstration had an anti-government character too. According to the Serbian interior ministry, more than 11,000 people took part in these rallies.

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Yeah, that will bring peace… Military troops vs civilians.

NATO To Send More Troops To Kosovo Following Clashes (RT)

The NATO bloc will deploy 700 additional peacekeepers to Kosovo, where 30 troops were wounded during clashes with local Serb protesters. Another battalion will be placed on high alert in the event of further escakation. NATO Secretary General Jens Stoltenberg announced the move during a Tuesday press briefing, saying the deployment was a response to recent “attacks” on the peacekeeping force, which he said were “unacceptable.” Stoltenberg urged officials in Pristina and Belgrade to take “concrete steps” to de-escalate the situation, and said the two sides should participate in an EU-brokered dialogue. Violent clashes between local Serbs and NATO’s Kosovo Force (KFOR) erupted after peacekeepers attempted to disperse demonstrators protesting the inauguration of a an Albanian mayor in a Serb-majority area. The standoff resulted in dozens of injuries on both sides.

The unrest came after local Serbs, who have long sought autonomy in Kosovo, boycotted Pristina-backed elections in several regions of Serbia’s breakaway province. Despite a turnout of less than 4%, local authorities accepted the votes as legitimate, announcing the election of four Albanian mayors. KFOR was first established in 1999 in the wake of NATO’s intervention in the Kosovo conflict on behalf of Kosovar Albanians and the bloc’s months-long bombing campaign in Serbia. The force consisted of around 50,000 troops at its height, but has since declined to about 3,700 soldiers today.

Kosovo has seen several waves of unrest since the 1999 war. In 2008, the Western-backed Albanian authorities unilaterally declared independence from Belgrade. The move was quickly backed by the United States and many other Western countries. Russia and China are among the states that continue to view Kosovo as part of Serbia. Moscow has said NATO is largely responsible for the recent spike in hostilities. Russian Foreign Ministry spokesperson Maria Zakharova accused the alliance of becoming “a source of unnecessary violence” and an “escalation factor” in the region. She urged the bloc to “silence its false propaganda” against local Serbs, who she said had been wrongly blamed for provoking incidents.

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“The early morning assault specifically targeted the wealthiest areas of the city, where Putin and multiple Russian elites have homes.”

Another Strike on Vladimir Putin? (GP)

Did the Ukrainians attempt to assassinate Russian President Vladimir Putin Tuesday morning? Did they have assistance? The Daily Mail reported that Moscow was attacked by several suspected Ukrainian drones Tuesday morning ostensibly in revenge for Russian attacks on Kyiv. The early morning assault specifically targeted the wealthiest areas of the city, where Putin and multiple Russian elites have homes. One local resident pointed out the attacks all happened within “an earshot” of Putin’s official residence in Novo-Ogaryovo. Here are the full details from the Daily Mail:

“Several buildings were damaged in wealthy suburbs of Moscow, including the elite district of Rublyovka to the south-west of the capital. One drone exploded into a mushroom cloud near the village of Usovo, which is just down the road from Putin’s official Novo-Ogaryovo residence. Explosive drones also struck blocks of flats in Leninsky Prospekt and Profsoyuznaya Street about six miles from the centre of Moscow, reportedly wounding several residents and damaging the buildings. Tuesday’s early morning raid targeted some of Moscow’s wealthiest areas including a western enclave where Putin and the elite have residences. Two people were injured while some Russians in two damaged apartment blocks were briefly evacuated, according to Moscow’s mayor.”

The New York Times notes that this marked the first time strikes hit civilian areas in the Russia’s capital. Looks like the crazy ukrainian lunatics may be planning on attacking Moscow? What is Biden getting us into? [..] If Ukraine was involved in this attack, the odds of World War III just skyrocketed. A peace deal must be struck quickly.

Maiman
https://twitter.com/i/status/1663467784578412544

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“The Russian Federation has been sentenced to ‘capital punishment’ in the [West] long ago. But simply, they don’t have it in them to achieve this goal..”

US ‘Encourage’ Ukraine To Attack Russia – Ambassador (RT)

The US has been inciting Ukraine to strike Russian territory, despite claiming the opposite, Russian Ambassador to Washington Anatoly Antonov said on Wednesday. Antonov argued that Washington’s statements in response to the recent drone raid on the Russian capital “sound like an encouragement for Ukrainian terrorists.” “Doesn’t the [US] administration understand that no one believes their slogans about non-support of Ukrainian strikes on Russian territory?!” the diplomat said, according to a statement on the embassy’s Telegram channel. Antonov’s remarks came after a White House spokesperson told reporters that “as [a] general matter, we do not support attacks inside of Russia.” The goal of the drone attack was to “sow fear among Russians” and undermine trust in the authorities, he said.


“The Russian Federation has been sentenced to ‘capital punishment’ in the [West] long ago. But simply, they don’t have it in them to achieve this goal,” the ambassador stated. Drones carrying explosives crashed into residential buildings in Moscow on Tuesday morning. According to the Russian Defense Ministry, eight UAVs participated in the attack, and all of them were either destroyed by air defenses, or veered off course due to the use of jamming equipment. Moscow Mayor Sergey Sobyanin said that no one was killed or seriously injured. Ukrainian President Vladimir Zelensky’s senior adviser Mikhail Podoliak denied Kiev’s involvement in the attack, but suggested that more similar raids would come.

We’re taking no blood

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Putin will not attend: “the immunities do not override any warrant issued by any international tribunal (like the ICC) against any attendee..”

Russia Will Be Appropriately Represented At BRICS Summit – Kremlin (RT)

Russia plans to take part in the BRICS summit in South Africa at the “proper level,” Kremlin spokesman Dmitry Peskov said on Tuesday in response to a question about whether President Vladimir Putin would attend. Putin has been invited to the gathering. However, by virtue of being a signatory to the Rome Statute of the International Criminal Court (ICC), which has issued a warrant against the Russian leader for alleged war crimes in Ukraine, South Africa would be obliged to arrest him if he attends. The 15th BRICS Summit in August will bring together the leaders of the world’s leading emerging economies: Brazil, Russia, India, China, and South Africa. Speaking at a news briefing on Tuesday, Peskov emphasized, as cited by the news agency TASS, that “Russia attributes great importance to the development of this integration format.”


Moscow will therefore “take part in this summit at the proper level.” Although he did not give any specifics, he offered assurances that “all the details” on the issue would be provided at a later stage. “We count as a bare minimum on partner countries in such an important format not being guided by such illegal decisions,” he said in reaction to a query about Pretoria implementing the warrant, Reuters reported. South Africa’s Foreign Ministry has granted diplomatic immunity to foreign officials participating in the summit from August 22-24, as well for a meeting of BRICS foreign ministers this week. Clayson Monyela, spokesperson for the Department of International Relations and Cooperation, explained that such immunities are customary for international gatherings. However, “the immunities do not override any warrant issued by any international tribunal (like the ICC) against any attendee,” he clarified in a tweet.

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Oil simply follows the path of least resistance. It doesn’t go away. Too much demand for that.

“India’s fuel exports to Europe over the past 12 months have jumped by over 70% [..] there is precious little the EU could do to change this without plunging the European economy into a deep recession brought on by fuel price inflation.”

Oil Flows Can Only Be Redirected, Not Stopped (Slav)

Asian oil imports were due for a marked rebound this month after the end of the maintenance season. Chances are that a lot of the additional oil would be coming from Russia, which has become one of the largest suppliers of China and India. In fact, Russian oil flows are growing despite claims from Moscow that it has reduced its total oil production. According to Bloomberg, Russian oil exports actually hit the highest since the start of 2022 last month. This is happening in the context of the most severe sanction push by the collective West against the country. And it is the clearest evidence yet of just how essential oil is for the functioning of the global economy. Before the invasion of Ukraine, Russia’s biggest oil clients were European countries. For China and India, it was a minor supplier. Since last year this has changed dramatically.

Now, China and India are the two biggest buyers of Russian crude. The two together took in as much as 80% of Russia’s total oil exports last month, according to the International Energy Agency. And the total, at 8.3 million barrels daily, was markedly higher than the annual average for both last year and the year before that. What’s more, Europe, which placed an embargo on direct Russian oil and fuel imports, has been taking in more fuels made in Asia—notably India. In fact, it seems to be taking in a lot of these fuels if the EU’s top diplomat Josep Borrell had to call publicly for an end to this practice. Indeed, India’s fuel exports to Europe over the past 12 months have jumped by over 70%, Reuters reported earlier this month. The report also noted that there is precious little the EU could do to change this without plunging the European economy into a deep recession brought on by fuel price inflation.

So, while until a year ago, Russian crude and fuels were going mostly to Europe directly, now almost all crude oil that Russia exports ends up in China and India. From there, processed into fuels, it goes to Europe. The routes have shifted. Oil demand has not. It is because of the resilience of oil demand that Russia’s oil revenues are recovering, too. In a recent report, Finland-based energy think tank Centre for Research on Energy and Clean Air said Moscow’s oil export revenues have rebounded to the highest since last November over the past couple of months. The authors noted that total budget revenues were down in April on an annual basis, but added that “Russia was able to export its main crude oil variety, for the first time, at prices that were systematically above the price cap level set by the U.S., EU and allies.”

There has been a lot of reporting about how China and India were benefiting from the discount at which Russian crude sells because of the sanctions. Most of that reporting has had an optimistic spin along the following lines: sanctions and the price cap are working because Russian oil is flowing, keeping global prices in check and bringing in lower revenues for the Kremlin. What the optimistic spin omits is that Russian oil prices remain tied to global prices, and as global prices recover, so do the prices of Russian crude, as stated by the Centre for Research on Energy and Clean Air. In other words, global oil demand, and Asian oil demand specifically, is so inelastic that no amount of sanctions can sap it.

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They simply refuse to testify or provide files. Sort of like the FBI in the US. Ursula must be fired, or the EU has a giant credibility problem. The total bill is €21.5 billion..

Pfizer, the EU, and Disappearing Ink (Pol.eu)

It’s as if Pfizer’s massive COVID-19 vaccine deal with the European Commission were written with disappearing ink: the more time passes, the more details seem to vanish. For a while now controversy has raged around the text messages supposedly exchanged between Commission President Ursula von der Leyen and Pfizer Chief Executive Albert Bourla in the run-up to the April 2021 deal for 1.1 billion doses of the BioNTech/Pfizer vaccine. The content and even existence of the messages has been shrouded in secrecy, with requests for clarification met with a fat “no comment.” On Friday, the Commission said it had reached a long sought-after deal with Pfizer to revise the terms of the contract. The new deal cuts down the 450 million doses that were still due to be delivered in 2023, and spreads them out over the next four years.

That’s all the information you get. The Commission isn’t revealing the new number of doses that member countries must buy, nor any of the financial terms of the amended contract. A lack of transparency has been a consistent feature of this deal. The Commission refused a Brussels journalist’s “access to documents” request to see von der Leyen’s alleged messages with Bourla — despite reproach from the European Ombudsman. The EU’s budget watchdog was blocked from looking into the negotiations, with no explanation given. The European Parliament’s committee on COVID-19 didn’t fare any better, with von der Leyen dodging a summons to appear in front of MEPs to answer their questions. It wasn’t always like this. The Commission was initially keen to flaunt the deal, which secured up to 1.8 billion doses of the vaccine that the U.S. pharmaceutical company jointly developed with Germany’s BioNTech.

Back then in April 2021, COVID-19 was still raging and governments were scrambling to secure access to limited supplies of vaccines; a couple of months earlier, the recently Brexited U.K. had secured a preferential supply line from AstraZeneca. Then came the big contract. It was the third deal the Commission had signed with BioNTech/Pfizer, but it dwarfed anything that came before. It locked the bloc into purchasing 900 million doses of vaccine upfront — enough to vaccinate the EU’s adult population three times over. Eventually an option for another 200 million doses was exercised, bringing the total number of doses to 1.1 billion, worth €21.5 billion based on vaccine prices reported by the Financial Times. Von der Leyen even took a victory lap in the New York Times, revealing that she took an unusual personal role in the talks in the run-up to the deal.

In the article, titled “How Europe Sealed a Pfizer Vaccine Deal With Texts and Calls”, the U.S. newspaper cites interviews with both von der Leyen and Bourla, revealing that the two texted and called each other in the run-up to the contract. At the top of the article, von der Leyen is photographed staring, steely-eyed, out of the Berlaymont onto Brussels, lending her face to the deal. More recently, though, the contract has become something of an embarrassment for the EU’s executive. [..] Alexander Fanta, a Brussels reporter at Netzpolitik, put in an “access to documents” request after reading the New York Times story. The Commission said it couldn’t find the texts, earning a rap on the knuckles from the European Ombudsman.

The EU’s budget watchdog, the European Court of Auditors, also came up against a wall of silence. In a report on the EU’s vaccine procurement published September last year, the agency auditors said that unlike with other contract negotiations, the Commission refused to provide records of the discussions with Pfizer, either in the form of minutes, names of experts consulted, agreed terms, or other evidence. Next it was the turn of the European Parliament. The committee on COVID-19, led by Belgian Socialist Kathleen Van Brempt, didn’t fare any better that the auditors. Twice, Pfizer’s CEO refused to appear in front of MEPs. And senior figures in the Parliament blocked a public cross-examination of the Commission president. Even the New York Times, where von der Leyen first trumpeted her success, is now suing the Commission to have the text messages released.

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The investigation into Hunter started in 2018…

Growing List of Whistleblowers Reporting Reprisal Under Biden Admin (ET)

In just under two-and-a-half years of the Biden administration, a growing number of whistleblowers have come forward to allege serious misconduct from officials in the FBI, Internal Revenue Service (IRS), and even the White House. By law, whistleblowers are protected from retaliation. However, according to several recent whistleblowers, reprisal has been a common result for individuals who have come forward with allegations of misconduct under the current administration. Below are some of the individuals who have blown the whistle on wrongdoing under the Biden administration and faced or feared punishment for doing so. Last month, an unnamed IRS criminal supervisory agent alleged to Congress that the IRS was mishandling its investigation of President Joe Biden’s son, Hunter Biden.

In an April 19 letter, the whistleblower’s attorney, Mark Lytle, wrote to Congress seeking legal protections for his client to provide further details about disclosures the agent had made internally at the IRS, to the U.S. Treasury Inspector General for Tax Administration, and the Justice Department inspector general. The disclosures, Lytle wrote, “contradict sworn testimony to Congress by a senior political appointee” and involved unresolved conflicts of interest and examples of preferential treatment for political reasons. Although the letter did not mention the younger Biden by name, Sen. Lindsey Graham (R-S.C.) revealed in an April 20 interview with Fox News that the allegations were related to the federal probe of potential tax crimes committed by the president’s son—an investigation that has been ongoing since 2018.

Following the letter’s publication in the media, rumors swirled that the referenced political appointee was Attorney General Merrick Garland, who testified before the Senate Judiciary Committee in March that the investigation into Hunter Biden would remain free of political influence. However, on May 15, Lytle and Empower Oversight President Tristan Leavitt—who is also representing the whistleblower—revealed in a subsequent letter to Congress that their client and his entire team had been removed from the investigation, allegedly at the request of the Justice Department. The change, the attorneys said, was “clearly retaliatory” even though such reprisal violates federal law.

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“I cannot find you, believe it or not I have been looking. I [have] driven by Hallie’s, you fathers. Called texted you … I want to help all the deals are still alive.”

New Insight into Hunter Biden and his Collapsing World of Corruption (Turley)

In 2018, Hunter Biden’s world was collapsing. The New York Times had run a story on one of his shady deals with the Chinese and his father, then vice president, was pulled into the vortex. It appears that Hunter was in a free fall and his uncle Jim Biden reached out in newly discovered messages to offer him a “safe harbor.” The exchange is an insight into a train wreck of a life of the scion of one of the most powerful families in the country. However, it is also insight into a world of influence peddling where millions simply evaporated in the coffers of the Biden family. On their face, the messages seem to contradict public statements from President Biden on the foreign-influence peddling that was used to fund Hunter’s drug-infused, self-destructive lifestyle. The Times story caused a panic in the Biden family.

Despite a largely supportive media, the Bidens have long been known for influence peddling. Jim Biden has been repeatedly criticized for marketing his access to his brother in pitches to clients. Hunter knew that the Times story was only the tip of an iceberg. There were deals all over the world with foreign figures worth millions and some of these figures had close ties to foreign intelligence or regimes. As revealed recently by the House Oversight Committee, the Bidens constructed a labyrinth of corporations and accounts to transfer millions from these deals to a variety of Biden family members, including grandchildren. Nevertheless, Joe Biden repeatedly claimed as a presidential candidate and as president that he had no knowledge of any foreign dealings of his son. Those denials now appear patently false.

The laptop includes pictures and appointments of Hunter’s foreign business associates with Joe Biden. It also includes a recording concerning a Times report on Dec. 12, 2018, detailing Hunter’s dealings with Ye Jianming, the head of CEFC China Energy Company. Ye would later be arrested for corruption. As Biden associates pushed the Times to change aspects of the story, Joe Biden called to report on the results. In his message, Biden ends his call to Hunter with the statement “I think you’re clear. And anyway if you get a chance, give me a call, I love you.” The new messages indicate that the Bidens were worried that Hunter was in a free fall as these dealings were becoming known and revenue was declining. Jim Biden appears to be rushing to get Hunter to work the problem with the family.

He assures him that they can find him “a safe harbor” and that “I can work with you[r] father alone!” Hunter previously complained that he was giving as much as half of his proceeds to his father and was now facing towering financial demands. He appears to have cut off the family. That is a dangerous development for a man who had a long struggle with drugs and alcohol. Hunter blew through a fortune on narcotics and women, including allegations that he may have used a shared credit card with his father to pay off prostitutes. Both Joe and Jim Biden were reaching out to Hunter to assure him that he was in the “clear” and that there is a “safe harbor.” However, Jim pushed him to remain in contact and in the fold: “I cannot find you, believe it or not I have been looking. I [have] driven by Hallie’s, you fathers. Called texted you … I want to help all the deals are still alive.”

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“The world has never seen the debt and the spending and the money printing like in the last few years. So something is going to have to be very, very ruinous to solve this problem this time.”

Jim Rogers Is Bracing For The Worst Bear Market Of His Life (BI)

Jim Rogers is bracing for the biggest market downturn in eight decades. The 80-year-old investor issued the grave warning during a recent RealVision interview. He also cautioned the US dollar’s global dominance is under threat, and higher interest rates will be necessary to rein in soaring prices. The cofounder of George Soros’ Quantum Fund also slammed US lawmakers for the current debt-ceiling debacle, touted commodities as the best hedges against inflation, and dismissed the idea that governments will embrace bitcoin. Here are Rogers’ 7 best quotes, lightly edited for length and clarity:
1. “The next bear market will be the worst in my lifetime, because the debt has gone up by such staggering amounts in the past 14 years.” (Rogers said the 2008 crash was caused by excessive amounts of debt, and borrowing has ballooned since then, suggesting a far worse downturn lies ahead.)

2. “We should always be concerned about Washington. They don’t have a clue what they’re doing. And they prove it day in and day out.” (He was discussing the current political gridlock over raising the debt ceiling.)

3. “You should be extremely worried. If you’re not, you don’t know what’s going on. Many countries are starting to look for alternatives to the US dollar, partly because of its horrendous debt problem. I’m looking every day, because I know that something bad is going to happen in the currency markets in the next two or three years.” (Rogers was commenting on de-dollarization fears.)

4. “Interest rates are going to go higher worldwide. I don’t know how high they have to go to kill inflation this time around. The world has never seen the debt and the spending and the money printing like in the last few years. So something is going to have to be very, very ruinous to solve this problem this time.”

5. “There’ll be trouble in all the markets — property markets, stock markets, bond markets, currency markets, everything. You have to learn about cash or selling short in order to survive what’s coming.”

6. “I don’t think that the world is going to convert to bitcoin. It will be computer money, but it will be government computer money.”

7. “The best place to be when you have inflation is real assets, and real assets are commodities. The cheapest asset that I know is still commodities.” (Rogers said he owns some silver and gold currently.)

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“..the average student loan payment is $393 per month..” For 25 million Americans. That adds up to $9.825 billion. And as per September 2023, for the first time in 39 months, that must be repaid again. Which removes it from discretionary spending.

Student Loans Represent 7% of US GDP (ZH)

Here are the details: late last year, Biden extended the repayment pause, which postpones roughly $5bn per month in student loan repayments, until 60 days after the Supreme Court ruled on the separate $400bn loan forgiveness plan the – the Supreme Court is likely to rule on loan forgiveness in June, so this likely would mean a restart of payments after August 2023. And now, the debt limit agreement prohibits further extension of the payment pause, but remains silent on the student loan forgiveness plan which however will be nixed by SCOTUS much to the chagrin of screaming libs and lifelong members of the “free $hit” army. Prior to the announced debt limit deal Goldman had already assumed the repayment pause would end on schedule, though there was clearly a chance the White House might have extended it once again.

The debt limit agreement eliminates that possibility (“except as expressly authorized by an act of Congress”) and should result in a restart of student loan payments in September 2023. What happens then? Well, according to Jefferies, the return of monthly loan payments presents risks similar to the effects of the 2013 fiscal cliff, when tax increases led to reduced consumer spending. And in a note released Monday (available to pro subscribers), JPMorgan’s chief US economist Michael Feroli said that the end of the payment moratorium will reduce annual disposable personal income by $38 billion, which will reduce consumer spending. Separately, a March analysis by FreightWaves found that federal government programs boosted personal income by an estimated $2.3 trillion from March 2020 to December 2022.

According to The Motley Fool, consumers received an average of $3,450 in stimulus during the COVID economy. This included direct payments into bank accounts, an expanded Child Tax Credit and an expanded Earned Income Tax Credit. But one of the biggest COVID-related stimulus programs was not factored into the s numbers: student loan forbearance. As noted above, Education Secretary Miguel Cardona said the student loan deferment program will end no later than June 30, 2023, and payments are expected to resume by Sept. 1, 2023: “The amount of money we are talking about, in excess of a trillion dollars, is staggering. Student loans represent 7% of U.S. GDP” according to FrightWaves.

Putting these numbers in context, 64% of the $1.7 trillion in student loan debt have been in forbearance for the past three years, amounting to $1.1 trillion. Many of the 25 million Americans who have deferred payments for student debt are aged 18-44 years old, one of the most important demographic groups that drive consumer spending. Some more math: according to a New York Fed study, the average student loan payment is $393 per month. For consumers taking advantage of the program, they have deferred 39 months worth of payments, resulting in more than $15,327 in additional discretionary income during the period, much larger than the amount most consumers received from other COVID stimulus programs.

Read more …

Good luck.

Greece and Poland Join Forces to Seek German War Reparations (GR)

Poland is seeking the help of Greece to demand World War II reparations from Germany, according to press reports in Poland. Polish state television TVP, reported that a major international conference on German war reparations will be held in Greece in June with the participation of Polish, Italian, Greek, and Serbian lawyers. Polish Deputy Foreign Minister Arkadiusz Mularczyk told Polish Radio 24 on Tuesday that “We are launching an international discussion.” Mularczyk stressed that in the background of Poland’s political actions in regard to obtaining war reparations from Germany, there is a kind of battle for historical memory. He added that besides striving to obtain reparation funds, Poland is also trying to educate and inform people about WWII history.


“5.4 million people died in Poland as a result of acts of aggression by the German Nazi occupying power, while 330,000 died in Greece.” “This quantitative difference is visible in other areas too. Both Poland and Greece share a similar fate of so-called ‘small allies’. In terms of reparations, they have been marginalized. Right up to today,” Muarczyk pointed out according to TVP. Earlier, Polish Ambassador to Greece Artur Lompart said in an interview with the Polish Press Agency (PAP) that the issue of reparations from Germany for damages suffered during World War II has never been closed in Greece. He noted that it is a field for cooperation between Poland and Greece. During her recent visit to Berlin, President of Greece Katerina Sakellaropoulou raised the issue of war reparations once again. At her meeting with her German counterpart, Frank-Walter Steinmeier in January, she stressed “the utmost importance of the issue of war reparations and the occupation loan.”

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“The swamp runs deep.”

Donald Trump, Pence’s Taskforce, and DeSantis’s Revisionist Attacks (NP)

There’s plenty of things we can say we would have done differently at the onset of COVID-19. I was originally supportive of Mike Pence’s taskforce, and the 14 days to slow the spread. I regret that. Though I don’t regret calling it out as a lab-leaked virus from day one. Donald Trump surely has his own regrets, expressed through his repeated disowning of Antony Fauci, Deborah Birx, and many of the bureaucrats who we now know colluded to provide him with incorrect information. Perhaps you don’t recall the anger from the corporate media when Trump called out the falsification of data, and attempted to stop it informing policy. But there’s more that keeps niggling at me about the way Trump’s opponents – mostly DeSantis surrogates – now deal with that issue.

They point to DeSantis’s (scarcely better) record. It’s true to say the Florida governor course corrected faster than Democrat leaders across the country. But it’s ludicrous to argue that Florida was operating “as normal” throughout COVID. As a reminder, DeSantis declared a public health emergency in March; limited beach gatherings and restaurant occupancy; issued an executive order closing down businesses; imposed quarantine orders; set up highway checkpoints; issued stay-at-home orders. He was even far behind Arkansas, Iowa, Nebraska, and both North and South Dakota in defying Tony Fauci. When he did re-open his state, he admitted he was “following President Trump’s recommendations to reopen.” But the campaign talking points from Team DeSantis aside, there’s something everyone seems to ignore: the origins of the COVID-19 taskforce, and the beginning of Operation Warp Speed.

Trump’s first Health and Human Services Secretary Tom Price made Big Pharma very uncomfortable. Which is why they briefed his “unorthodox” views on mandatory vaccination to the Washington Post’s health reporter Amy Goldstein. The article quotes someone from Avalere Health – a D.C. health policy consultancy firm – who said: “I’ve seen people with extreme views come into government and take the position very seriously, and I’ve seen people with extreme views come into government and pursue their specific interests.” The “extreme” position at the time? That Price used to be a member of the Association of American Physicians and Surgeons (AAPS) which at the time opposed mandatory vaccination as “human to human experimentation.” Avalere Health, for what it’s worth, is led by a woman called Elizabeth Carpenter, who previously worked at the globalist New American Foundation, which receives most of its funding from the Bill & Melinda Gates Foundation, and even the United States Department of State. The swamp runs deep.

Read more …

”The Epoch Times presents the second part of an exclusive edited extract from the forthcoming book “Swiftboating America” by Hans Mahncke, co-host of “Truth over News” on EpochTV. Sign up at SwiftboatingAmerica.com to get a notification once the book is out.”

“In her failed attempt to become president, Hillary Clinton had swiftboated America herself.”

‘Swiftboating America’ (Mahncke)

On May 20, 2022, Hillary Clinton’s campaign manager, Robby Mook, finally admitted that it was Clinton herself who had greenlighted her presidential campaign’s scheme to smear Donald Trump with Russia collusion claims. Mook’s admission, made during his testimony in Clinton campaign lawyer Michael Sussmann’s trial for lying to the FBI about Clinton’s scheme, marked the final chapter in a six-year saga that ruined a presidency and turned the world order on its head. It all began in early 2016 when Jennifer Palmieri, director of communications for the Clinton presidential campaign, received an email from Joel Johnson, a senior adviser to Bill Clinton. Johnson wrote: “Who is in charge of the Trump swift boat project? Needs to be ready, funded and unleashed when we decide—but not a half assed scramble.”

Palmieri sarcastically replied: “Gee. Thanks, Joel. We thought we could half-ass it. Let’s discuss.” The exchange was buried in a huge trove of emails from Clinton campaign Chairman John Podesta that were released by whistleblower group WikiLeaks in October 2016. The significance of the two emails was largely overlooked at the time. It was only with hindsight—and the progressive unraveling of Clinton’s scheme to vilify Trump—that their importance has become apparent. We now know that the two emails marked the inception of the dirtiest political trick of all time: Clinton’s Russiagate scam, a multi-pronged and multi-layered campaign to paint Trump as an asset of the Kremlin. Her scheme was completely unheard of and beyond the bounds of anything that had previously happened in the dirty world of American politics.

In 1972, Republican operatives broke into the headquarters of the Democratic National Committee at the Watergate Office Building in Washington. The ostensible purpose of the break-in was to eavesdrop on a political opponent, but even that act pales in comparison to what Clinton did. Clinton’s intention was to execute an elaborate scheme that painted her opponent as an agent of a foreign power. It was a devious plan, and it came at a heavy price for all Americans. Russiagate not only consumed Trump’s presidency, but it also altered the geopolitical balance of power for generations yet to come. In her failed attempt to become president, Hillary Clinton had swiftboated America herself.

Read more …

 

 

 

 

Gervais
https://twitter.com/i/status/1663497038527438849

 

 


A typical steak is 8 ounces. 28.35 grams in one ounce. So you can have approx 1/20th of a steak per day which is like 1 bite. Maybe 2 bites.

 

 

Goat gravity
https://twitter.com/i/status/1663554790058754052

 

 

 

 

Girl, dog

 

 

The best life
https://twitter.com/i/status/1663781293182578689

 

 

 

 

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Nov 232020
 


Egon Schiele Port of Trieste 1907

 

 

Don’t miss the update on our support for the Monastiraki social kitchen in Athens.. And please consider donating to our efforts for this Christmas season.

 

 

 

US, Germany, UK Could Start COVID Vaccinations As Early As December (G.)
AstraZeneca’s COVID19 Vaccine Shows Average Efficiency Of 70% (RT)
Most Coronavirus Cases Are Spread By People Without Symptoms – CDC (CNN)
WHO Envoy Predicts Third Wave Of COVID19 In Europe Next Year (RT)
Portuguese Court: PCR Tests “Unreliable” & Quarantines “Unlawful” (OffG)
Rudy Giuliani: Sidney Powell Not Part Of Trump Legal Team (JTN)
Michael Flynn Jr. on Trump Team’s Sidney Powell Statement (GP)
Nunes Claims Obama Is Joe Biden’s ‘Overlord’, Calls For Special Counsel (DM)
Taxpayers Face $435 Billion in Student-Loan Losses Already Baked In (WS)
China Daily Paid US Newspapers Millions To Publish Propaganda This Year (DC)
The US Has Withdrawn From The Treaty On Open Skies (JTN)

 

 

Save a puppy

 

 

But will it all take a whole year?

US, Germany, UK Could Start COVID Vaccinations As Early As December (G.)

As G20 leaders pledged to ensure the equitable distribution of Covid-19 vaccines, drugs and tests so that poorer countries are not left out, the US, UK and Germany each announced plans to begin vaccinations in their countries in December, while Spain said it would start administering the vaccine to its citizens in January. Britain could give regulatory approval to Pfizer-BioNTech’s Covid-19 vaccine as early as this week, even before the US authorises it, the UK’s Telegraph newspaper reported on Sunday. Pfizer and BioNTech could secure emergency US and European authorisation for their Covid-19 vaccine next month after final trial results showed a 95% success rate and no serious side effects. Moderna last week released preliminary data for its vaccine showing 94.5% effectiveness.


The better-than-expected results from the two vaccines, both developed with new messenger RNA (mRNA) technology, have raised hopes of an easing of a pandemic that has killed more than 1.3 million people. In the US, the head of the US vaccine program, Moncef Slaoui, said the first Americans to receive a vaccine could get it as soon as 11 December, CNN reported on Sunday. “Our plan is to be able to ship vaccines to the immunisation sites within 24 hours from the approval, so I expect maybe on day two after approval on the 11th or the 12th of December,” he said in an interview to CNN. Citing government sources, the Telegraph also said the UK’s National Health Service had been told to be ready to administer it by 1 December. Britain formally asked its medical regulator, the MHRA, last week to assess the suitability of the Pfizer-BioNTech vaccine.

Read more …

That’s not very high. How about the Russian vaccine?

AstraZeneca’s COVID19 Vaccine Shows Average Efficiency Of 70% (RT)

The coronavirus vaccine developed by the University of Oxford and drug maker AstraZeneca has shown an average efficiency of 70 percent, depending on dosage, the partners said as they announced clinical trial results. The developers revealed the preliminary results on Monday, following trials conducted in the UK and Brazil. Depending on the dosage, the vaccine showed varying efficiency of up to 90 percent, while the Pfizer vaccine is 95 percent effective and Russia’s Sputnik V is 92 percent effective. “One dosing regimen showed vaccine efficacy of 90 percent when AZD1222 was given as a half dose, followed by a full dose at least one month apart, and another dosing regimen showed 62 percent efficacy when given as two full doses at least one month apart,” the AstraZeneca developers said in a statement, adding, “analysis from both dosing regimens resulted in an average efficacy of 70 percent.”


AstraZeneca’s CEO Pascal Soriot said the vaccine’s “efficacy and safety” showed it will be highly effective against the coronavirus and it will have an “immediate impact” on the Covid-19 crisis. The announcement was welcomed by UK Health Secretary Matt Hancock who said the preliminary trial results were “fantastic news.” “These figures … shows that the vaccine in the right dosage can be up to 90 percent effective,” he told Sky News. “We’ve got 100 million doses on order and should all that go well, the bulk of the rollout will be in the new year.”

Read more …

Confusion over droplets vs arerosols.

Most COVID transmission by people without symptoms
– Ppl w/o symptoms don’t cough and sneeze much
– When talking, aerosols dominate over droplets by x100-2000
– Surfaces transmit inefficiently (per CDC)

Most Coronavirus Cases Are Spread By People Without Symptoms – CDC (CNN)

Most coronavirus infections are spread by people who have no symptoms, the US Centers for Disease Control and Prevention said in newly updated guidance. It’s one of the main reasons mask use is so important, the CDC said. “Most SARS-CoV-2 infections are spread by people without symptoms,” the agency said in a section of its website devoted to explaining the science of how to use masks to control the spread of the virus. “CDC and others estimate that more than 50% of all infections are transmitted from people who are not exhibiting symptoms,” it added in the guidance posted Friday. “This means at least half of new infections come from people likely unaware they are infectious to others.”


According to the CDC, 24% of people who transmit the virus to others never develop symptoms and another 35% were pre-symptomatic. It also said 41% infected others while experiencing symptoms. Peak infectiousness comes five days after infection, the agency said on the website. “With these assumptions, 59% of infections would be transmitted when no symptoms are present but could range (from) 51%-70% if the fraction of asymptomatic infections were 24%-30% and peak infectiousness ranged 4-6 days.” It cited a study published in July in the Proceedings of the National Academy of Sciences and as-yet unpublished CDC data. Previously, the health organization has not characterized what percentage of infections are spread by symptomless people. “Infection is spread primarily through exposure to respiratory droplets exhaled by infected people when they breathe, talk, cough, sneeze, or sing,” the agency added.

Read more …

WHO still not in favor of lockdowns. But that falls on deaf ears.

WHO Envoy Predicts Third Wave Of COVID19 In Europe Next Year (RT)

With Europe already suffering a second wave of coronavirus infections, World Health Organization envoy David Nabarro has warned that the region could see another spike in infections next year In an interview on Saturday with Swiss newspaper Solothurner Zeitung, Nabarro said that European governments failed to build up the “necessary infrastructure” to keep the virus under control after the first wave of infections this spring. Now we have the second wave. If they don’t build the necessary infrastructure, we’ll have a third wave early next year. Infections are once again surging throughout Europe, after a lull this summer.


France and Germany recorded some 33,000 new cases combined on Saturday, while the UK reported nearly 20,000 cases on the same day, and Spain announced more than 15,000 on Friday. Deaths remain proportionally lower throughout Europe than during the first wave, however. Despite Nabarro’s stark prediction, the WHO has cautioned against responding too heavy-handedly to the pandemic. In a briefing on Thursday, the organization’s European director, Hans Kluge, called for “systematic and general mask-wearing” and “strict controls on social gatherings,” but described national lockdowns as a “last resort” policy.

Read more …

“The reddit Covid19 board actually removed the post, because it was “not a reliable source”, despite relying on the official court documents.”

Portuguese Court: PCR Tests “Unreliable” & Quarantines “Unlawful” (OffG)

An appeals court in Portugal has ruled that the PCR process is not a reliable test for Sars-Cov-2, and therefore any enforced quarantine based on those test results is unlawful. Further, the ruling suggested that any forced quarantine applied to healthy people could be a violation of their fundamental right to liberty. Most importantly, the judges ruled that a single positive PCR test cannot be used as an effective diagnosis of infection. The specifics of the case concern four tourists entering the country from Germany – all of whom are anonymous in the transcript of the case – who were quarantined by the regional health authority. Of the four, only one had tested positive for the virus, whilst the other three were deemed simply of “high infection risk” based on proximity to the positive individual.

All four had, in the previous 72 hours, tested negative for the virus before departing from Germany. In their ruling, judges Margarida Ramos de Almeida and Ana Paramés referred to several scientific studies. Most notably this study by Jaafar et al., which found that – when running PCR tests with 35 cycles or more – the accuracy dropped to 3%, meaning up to 97% of positive results could be false positives. The ruling goes on to conclude that, based on the science they read, any PCR test using over 25 cycles is totally unreliable. Governments and private labs have been very tight-lipped about the exact number of cycles they run when PCR testing, but it is known to sometimes be as high as 45. Even fearmonger-in-chief Anthony Fauci has publicly stated anything over 35 is totally unusable.

[..] The media reaction to this case has been entirely predictable – they have not mentioned it. At all. Anywhere. Ever. The ruling was published on November 11th, and has been referenced by many alt-news sites since…but the mainstream outlets are maintaining a complete blackout on it. The reddit Covid19 board actually removed the post, because it was “not a reliable source”, despite relying on the official court documents.

Read more …

Looks a bit sloppy.

Rudy Giuliani: Sidney Powell Not Part Of Trump Legal Team (JTN)

Rudy Giuliani, the lead attorney for President Trump’s election challenges, and Trump Campaign Senior Legal Adviser Jenna Ellis said Sunday that high-profile attorney Sidney Powell does not work for the president personally or for his campaign. “Sidney Powell is practicing law on her own,” the statement from Giuliani and Ellis said. “She is not a member of the Trump Legal Team. She is also not a lawyer for the President in his personal capacity.” Powell on Thursday spoke during a press conference where Giuliani and Ellis also spoke. “I look forward to Mayor Giuliani spearheading the legal effort to defend OUR RIGHT to FREE and FAIR ELECTIONS!” President Trump tweeted on November 14. “Rudy Giuliani, Joseph diGenova, Victoria Toensing, Sidney Powell, and Jenna Ellis, a truly great team, added to our other wonderful lawyers and representatives!”

Powell, who has alleged that massive corruption occurred during the 2020 election, said during an interview on Newsmax that a “biblical” filing is forthcoming regarding the state of Georgia. “Georgia is extremely bad,” Powell said. “We’ve got ballots being shredded, ballots being thrown out in trash bags…the votes being switched, the algorithms being run: You name the manner of fraud and it occurred in Georgia,” she said. While media outlets have projected Joe Biden to be the winner of the 2020 presidential contest, President Trump has not conceded and has made allegations of election fraud.

The Peach State is “probably gonna be the first state I’m gonna blow up,” Powell said, remarking that “Mr. Kemp and the secretary of state need to go with it because they’re in on the Dominon scam with their last minute purchase or award of a contract to Dominon of $100 million dollars. The state bureau of investigation for Georgia oughta be looking into the financial benefits received by Mr. Kemp and the secretary of state’s family about that time.”

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She was suspended by Twitter too.

Michael Flynn Jr. on Trump Team’s Sidney Powell Statement (GP)

As we suspected, the news this evening about Sidney Powell not being on the Trump team is an act to protect Sidney and the Trump team and not a message of disappointment in her latest interviews and actions at all. The Trump campaign issued a statement Sunday night announcing Sidney Powell is not a member of President Trump’s legal team. The statement was posted online by campaign attorney Jenna Ellis on behalf of lead campaign attorney Rudy Giuliani. Powell had appeared at a campaign legal team press conference earlier this week alongside Giuliani and Ellis. Statement:

Attorney Sidney Powell was not able to respond tonight. Sidney was censored and suspended by Twitter earlier today. Mike Flynn, Jr. released a statement tonight.

Sidney released a statement to CBS News. She signed off — #KrakenOnSteroids

General Michael Flynn’s son, Mike Jr., followed up with a message tonight on Parler noting that the earlier message from the President’s team is not a reflection of any misstatements on Sidney’s part:

Read more …

‘President Obama is the only president that I know that only moved about a mile from the White House – set up shop, has all his people there..’

Nunes Claims Obama Is Joe Biden’s ‘Overlord’, Calls For Special Counsel (DM)

Rep. Devin Nunes has claimed former President Barack Obama is President-elect Joe Biden’s ‘overlord’ and called for a special counsel to take over the investigation into the origins of the Trump-Russia probe. Nunes, a California Republican and staunch ally of President Donald Trump, appeared on Fox News Channel’s Sunday Morning Futures in an interview with host Maria Bartiromo. ‘President Obama is the only president that I know that only moved about a mile from the White House – set up shop, has all his people there,’ Nunes said, referring to the Obama family’s rented mansion in Washington DC. ‘Most of his people were promoting Kamala Harris to run before she bombed out, wasting hundreds of millions of dollars, and then they propped up Joe Biden,’ Nunes claimed.

Later in the interview, Nunes referred to Obama as Biden’s ‘overlord.’ Nunes also called on Attorney General Bill Barr to appoint a special counsel to take over U.S. Attorney John Durham’s investigation into potential malfeasance in the Russian collusion investigation. ‘Now we’re sitting waiting for Durham to complete this investigation. I think people are getting not only very frustrated but also, there’s a growing concern that Durham is not going to come out with anything and then Biden and Obama are going to be back in, and they’re going to shut this investigation off,’ Nunes said. Durham was appointed by Barr more than a year and a half ago to investigate any misconduct by the FBI and others others related to the inquiry into links between Trump’s campaign and Russia.

So far, Durham’s investigation has secured one guilty plea from a former FBI lawyer, who admitted to doctoring a document used to obtain surveillance warrants on a Trump campaign aide. Trump has raged that the Russian collusion probe, which cast a shadow over much of his presidency, was a ‘failed coup,’ and expressed fury that Durham did not issue more indictments prior to the November election. Nunes said that he feared Biden’s administration would shut down the Durham probe before it could be concluded. ‘I’ve been very clear about this,’ the congressman said. ‘Every day that ticks by, it’s going to become an absolute necessity that a special counsel is appointed on the way out.’

‘Now that doesn’t mean that Biden wouldn’t fire the special counsel, but at least you’d have a special counsel office set up, with money, so that this investigation can continue, because I’m not seeing the indictments that I should be seeing when you take into the account that I’ve made 14 criminal referrals involving dozens and dozens of people,’ he continued.

Read more …

“Most of the losses would come from the already established income-based repayment programs and the debt forgiveness at the end of their term.”

Taxpayers Face $435 Billion in Student-Loan Losses Already Baked In (WS)

In 2009, the US government entered the business of reckless, no-matter-what lending to students, even to older students with subprime credit ratings and to students at iffy for-profit colleges with dubious degree programs. And then tuition soared, and student housing went upscale and became a global asset class with its own commercial mortgage-backed securities (CMBS) that are now experiencing record delinquency rates. And Apple and textbook publishers and everyone began feeding at the big trough, with students just being the conduit for this money. Student-loan balances on the government’s financial statement skyrocketed from $147 billion in 2009 to $1.37 trillion at the beginning of 2020, despite the 11% decline in student enrollment since 2011.


Taxpayers face a loss of $435 billion on the $1.37 trillion in student loans on the government’s financial statement at the beginning of this year, even if no additional loans are issued going forward, according to an internal study by the Department of Education, reported by the Wall Street Journal which reviewed the documents. Most of the losses would come from the already established income-based repayment programs and the debt forgiveness at the end of their term. The expected loss of $435 billion is far larger than the rosy estimates released previously, including the Congressional Budget Office’s estimate in May 2019 of a loss of $31 billion, including administrative costs. The student loan balances in the chart above do not include student loans carried by private lenders that are guaranteed by the US government and that will produce additional losses for taxpayers.

Read more …

Is this legal?

China Daily Paid US Newspapers Millions To Publish Propaganda This Year (DC)

An English-language newspaper controlled by the Chinese Communist Party’s propaganda department paid U.S. media companies nearly $2 million for printing and advertising expenses over the past six months, even amid heightened scrutiny over Beijing’s disinformation efforts in the West. China Daily paid The Wall Street Journal more than $85,000 and the Los Angeles Times $340,000 for advertising campaigns between May and October 2020, according to a disclosure that the propaganda mill filed this week with the Justice Department under the Foreign Agents Registration Act (FARA). China Daily also paid Foreign Policy magazine $100,000, The Financial Times, a U.K.-based newspaper, $223,710, and $132,046 to the Canadian outlet Globe & Mail for advertising campaigns, according to the filing.


The Beijing-based outlet paid several newspaper companies a total of $1,154,666 for printing costs, including $110,000 to the Los Angeles Times, $92,000 to The Houston Chronicle and $76,000 to The Boston Globe. Overall, China Daily spent more than $4.4 million on printing, distribution, advertising and administration expenses over the past six months, according to the FARA filing. China Daily, which is controlled by the Chinese Communist Party’s State Council Information Office, its propaganda agency, has for years paid newspapers and magazines in the U.S. and other Western countries to publish advertorials designed to look like legitimate news articles. China Daily paid The Washington Post more than $4.6 million from late 2016 through October 2019, according to a FARA disclosure China Daily filed in June. The Journal received $6 million for advertorials from 2016 through April 2020, according to the disclosure.

Read more …

RussiaRussia.

The US Has Withdrawn From The Treaty On Open Skies (JTN)

The U.S. departed the Treaty on Open Skies on Sunday, following an announcement earlier this year that the nation planned to withdraw from the treaty. “On May 22, 2020, the United States exercised its right pursuant to paragraph 2 of Article XV of the Treaty on Open Skies by providing notice to the Treaty Depositaries and to all States Parties of its decision to withdraw from the Treaty, effective six months from the notification date,” a press statement from the State Department’s Cale Brown notes. “Six months having elapsed, the U.S. withdrawal took effect on November 22, 2020, and the United States is no longer a State Party to the Treaty on Open Skies.”


In a statement earlier this year, Secretary of State Mike Pompo accused Russia of violating the treaty. “While the United States along with our Allies and partners that are States Parties to the Treaty have lived up to our commitments and obligations under the Treaty, Russia has flagrantly and continuously violated the Treaty in various ways for years,” Pompeo said. “This is not a story exclusive to just the Treaty on Open Skies, unfortunately, for Russia has been a serial violator of many of its arms control obligations and commitments.”

Read more …

 

 

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Feb 032017
 
 February 3, 2017  Posted by at 11:06 am Finance Tagged with: , , , , , , , , , ,  2 Responses »


Pierre-Auguste Renoir The Return of the Boating Party 1862

Trump’s Economic Policy Makes Perfect Sense: Albert Edwards (CNBC)
Big Clash Looming (Kath.)
The IMF Should Get Out of Greece (Ashoka Mody)
Italians Are Outright Economic Losers in the Era of the Euro (BBG)
China Net 2016 Outflows At Record $725 Billion (R.)
Reality Vs. The “Recovery” Narrative (Mises)
Markets Are Experiencing Cognitive Dissonance (Rickards)
Scots to Vote on Tuesday on May’s Draft Law to Trigger Brexit (BBG)
America’s Student Loans Problem Is Much Bigger Than Anybody Realized (TAM)
Originalism: Neil Gorsuch’s Constitutional Philosophy (G.)
Angela Merkel Lectures Turkish President Erdogan On Upholding Freedoms (SMH)
Turkey Refugee Deal With EU at Risk, Erdogan Adviser Warns (BBG)
Small Steps Taken To Improve Conditions At Lesvos Migrant Camp (K.)

 

 

“The only things where the US excels are the ability of companies to get credit and resolving insolvency. So US companies excel at leveraging up and going bust – great!”

Trump’s Economic Policy Makes Perfect Sense: Albert Edwards (CNBC)

As the early days of the Donald Trump administration draw global opprobrium, Societe Generale’s famously bearish strategist Albert Edwards is offering unlikely support. “A lot of what he says on the economic front makes perfect sense to me.” Edwards claimed in his latest note published Thursday. Edwards said the new administration might be a “neo-liberal nightmare” but when the controversial topic of immigration was removed, there was clarity in Trump’s thinking. “We have long written on these pages that Germany is one of the biggest currency manipulators in the world. Germany aggressively refutes any criticism, let alone does anything about it (unlike China),” penned Edwards.

Trump’s team has attacked Germany for using the “grossly undervalued” euro to gain unfair trade advantages with the U.S. as well as trading partners within the European Union. The comments, published Tuesday, sent the euro to an eight-week high against the dollar. Edwards wrote that unless Germany changes its current position it “will have huge implications for both financial markets and the sustainability of the euro zone.” He said while the U.S. Treasury and the European Commission appeared unwilling to take on Berlin, it looked like the Trump administration would act assertively. Edwards, a self-described socialist, also said Trump’s plan to strip back regulation affecting U.S. corporates “rings true”.

“US corporate competitiveness is poor and deteriorating. The World Bank, for example, ranks the US a derisory 51st on how easy it is to start a business,” he wrote. “The only things where the US excels are the ability of companies to get credit and resolving insolvency. So US companies excel at leveraging up and going bust – great!” Edwards described America as a low tax and spend nation that has strangled its corporate sector. He said small business, traditionally the growth engine for jobs, is particularly burdened by regulation and concluded “There is much work indeed for The Donald.”

Read more …

Can Greece break from the EU and rebuild its “traditional alliances with the US and the UK”?

Big Clash Looming (Kath.)

The United States and Germany are gearing up for a serious clash. Washington’s aim this time is not Germany’s military defeat, as was the case twice last century, but curbing its economic hegemony. Before being sworn in as US president, Donald Trump said that he believed Berlin was using the European Union as a vehicle for its further economic expansion, and the tycoon was right on the money. Speaking to the BBC a few days ago, the man tipped as America’s new ambassador to the European Union, Ted Malloch, expressed his belief that the euro could collapse within the next 18 months. It was a risky prediction, but suggestive of the views prevailing in Washington right now.

The third worrying statement came from the head of the US president’s National Trade Council, Peter Navarro, who told the Financial Times that the euro is a German currency in disguise – an apt observation – that is “grossly undervalued” so that Germany can retain a competitive edge over the United States. His comment is nothing short of a direct challenge and a sign of a more serious confrontation waiting to happen. What is extremely interesting is that Wolfgang Schaeuble, the most fervent of champions of monetary stability and the euro, has so far avoided making a response. Maybe he is aware that when it comes to the US, his firepower is somewhat limited, so he contains his barbs to judgmental comments against Greece and terrorizing Europe’s south.

German Chancellor Angela Merkel muttered something about the European Central Bank’s independence and European Council President Donald Tusk said Trump is a threat to the EU – this is Europe; these are its political leaders, people waiting in fear for America to unfold its policy. This would all be a matter of academic interest were it not for the fact that the looming clash between a US-British alliance and the European establishment poses a major threat to regional stability, and of course to Greece. Bad luck and political imprudence have resulted in Greece being cut off from its own traditional alliances with the US and the UK, now especially so. Given the recent tension with Turkey and the fact that in previous difficult periods Europe stood by as conflict was avoided only thanks to the US’s intervention, it is evident that there are more important issues than the pending bailout review that Athens should be focusing on.

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Germany should get out of Greece too. And Brussels. Take a hike and get paid back in drachma. Or better yet, pay back your own gambling banks instead of letting Greeks do it.

The IMF Should Get Out of Greece (Ashoka Mody)

The IMF’s involvement in Greece has been an unmitigated disaster: Time and again, its failure to heed crucial lessons has visited suffering upon the Greek people. When the fund’s directors meet on Monday, they should agree to forgive the country’s debts and get out. The IMF should never have gotten into Greece in the first place. As late as March 2010, with concerns about the Greek government’s ability to pay its debts roiling markets, Europe’s leaders wanted the IMF to stay away. Europeans feared that the fund’s financial assistance to one of their own would signal broader weakness in the currency union. As Jean-Claude Juncker famously put it: “If California had a refinancing problem, the United States wouldn’t go to the IMF.”

Nonetheless, German Chancellor Angela Merkel decided that the IMF’s presence was the signal needed to persuade German citizens that Greece needed urgent financial support and that strict discipline in the use of those funds would be enforced. Merkel’s political priorities coincided with the interests of Managing Director Dominique Strauss Kahn, who was desperate to pull the IMF out of irrelevance. From that moment on, the IMF became Europe’s – mainly Germany’s – instrument in Greece. Then came the cardinal error: At the IMF’s Board, over the fierce opposition of several executive directors, the Europeans and Americans pushed through a bailout program that, contrary to the fund’s rules, did not impose losses on Greece’s private creditors. The decision was based on a spurious claim that “restructuring” private debt would trigger a global financial meltdown.

Thus, European governments and the IMF lent Greece a vast sum to repay its existing creditors. Greece’s debt burden remained unchanged and onerous, and the most vulnerable Greeks were forced to accept crippling austerity to repay the country’s new official creditors. The economy quickly and predictably went into a tailspin. Even when the IMF recognized the error of its ways, it didn’t change course. An internal “strictly confidential” report, later made public, acknowledged that the program was riddled with “notable failures,” including the lack of private debt restructuring and excessive austerity. But the IMF never took responsibility. Instead, it demanded even more austerity throughout 2014.

In December, the public rebelled and brought the opposition Syriza party to power, which only made the IMF’s demands more insistent. At this point, the evidence that the strategy was pushing Greece to economic and financial collapse was overwhelming. It was like requiring a trauma patient to run around the block before being admitted to intensive care. Yet as usual, the inevitable suffering was blamed on Greece’s unwillingness to cooperate.

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“[Italy] GDP per capita in real terms shrank 0.4% in the last 18 years..” “In Germany, the euro region’s largest economy, per-capita output rose by 26.1% since 1998.”

Italians Are Outright Economic Losers in the Era of the Euro (BBG)

Almost two decades after the creation of the euro single currency, Italians are proving to be the big losers among the 19 member countries. GDP per capita in real terms shrank 0.4% in the last 18 years, according to Bloomberg calculations based on data from the European Union statistics office up to 2015 and estimates for 2016. While Italy’s economy expanded 6.2% since 1998, its population increased by 6.6% over the period – thus accounting for the per-head drop. “The comparison with other countries clearly shows that the Italian economy has expanded at too-slow a pace over the period,” said Loredana Federico, an economist at UniCredit Bank AG in Milan. “It will be very difficult for Italy to close, in the years to come, the gap with other economies that already returned to the pre-crisis level or even surpassed it.”

Eleven members of the EU introduced the euro as an accounting currency in January 1999; they were later joined by Greece. The actual notes and coins were introduced in January 2002, and expansion of the zone has since continued, with Lithuania becoming the 19th member in 2015. Italy’s per-capita GDP has fared even worse than Greece, which was severely hit by the financial crisis. The value of all goods and services produced in that country rose in the last 18 years by 4% on an individual basis, Bloomberg calculations show. In Germany, the euro region’s largest economy, per-capita output rose by 26.1% since 1998. That makes the citizens of Chancellor Angela Merkel’s nation the winners among all of the bloc’s main economies.

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“If U.S.-based multinational corporates start to repatriate their profits from China, outflows could worsen further in 2017..”

China Net 2016 Outflows At Record $725 Billion (R.)

Capital outflows from China surged last year to a record $725 billion and could pick up further if U.S. firms face political pressure to repatriate profits, the Institute of International Finance said on Thursday. The Washington DC-based group, one of the most authoritative trackers of capital movements in and out of the developing world, estimates net Chinese outflows last year were $50 billion higher than in 2015, dwarfing the inflows other emerging economies received. Net outflows in 2014 had been just $160 billion from China, which has seen capital flight pick up in the past couple of years from local businesses and households, partly on expectations that the yuan would weaken against the dollar.

The outflows, which caused a $320 billion decline last year in Chinese foreign exchange reserves, have prompted authorities to strengthen capital curbs. The yuan fell 6.5% against the dollar last year, the biggest ever yearly fall. The IIF estimated China outflows at a heavy $95 billion in December and noted that a rise in protectionism, especially in the United States after the election of President Donald Trump, could exacerbate the situation. Trump and his top trade adviser this week criticised Germany, Japan and China, saying the three key U.S. trading partners were devaluing their currencies to the detriment of U.S. companies and consumers. “If U.S.-based multinational corporates start to repatriate their profits from China, outflows could worsen further in 2017,” the IIF said, referring to pledges of tax breaks to U.S. firms that bring overseas profits back to the country.

But excluding China, the picture for emerging markets appeared brighter, the IIF said, noting net capital inflows last year had amounted to $192 billion, versus $123 billion in 2015. In January, inflows into the stocks and bonds of a group of big emerging economies stood at a five-month high of $12.3 billion, the group added. “January was a much better month for emerging markets but it is too early to tell if this reflects hope for a better outlook – or this is just the eye of the storm,” the IIF note added. The capital exodus from China, however, dominates the picture – the IIF last November forecast the developing world would suffer net capital outflows of $206 billion in 2017, with the vast majority accounted for by China.

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“Needless to say, Yellen’s credibility, to use a word of the mainstream, should be absolutely shattered.”

Reality Vs. The “Recovery” Narrative (Mises)

As Jeffrey Lacker leads the pack on the Fed’s “concern of overheating” front, last Friday’s 2016 fourth quarter GDP numbers completely contradict the narrative. Coming in at a paltry 1.85% growth rate, the Fed was handed yet another excuse to push off the so-called “normalization of interest rates” further into the future. The Fed’s FOMC again confirmed as much at its February meeting. The Fed has stated for years – since 2008 – that it needed to keep interest rates low in order to support a sustainable recovery. The Fed was allegedly paying close attention to it’s Congressionally-sourced dual mandate to determine when it could start allowing rates to rise. But now it is 2017 and the Fed’s bureaucratic statistics relating to unemployment and price inflation say things are just dandy.

But the GDP numbers, which purport to measure growth, scream the opposite. This is the Fed’s predicament. They’ve held that the dual mandate was their only guide, but it’s becoming quickly evident how irrelevant those numbers are. As it turns out, the third quarter’s 3.5% GDP number was not a sign of coming paradise, but was rather a mocking anomaly. In the past six quarters, only once (third quarter 2016) did the GDP growth rate come in above 2%. Moreover, things are getting worse, not better. 2016’s average growth rate was worse than both 2014 and 2015. Needless to say, Yellen’s credibility, to use a word of the mainstream, should be absolutely shattered. Stimulus and quantitative solutions have been an epic failure.

In light of this, the Fed’s decision to raise the target Federal Funds rate over the coming months is especially painful. Should they choose to do so, they do it in the face of a growth rate that is barely treading water. But if they choose to prolong these target rate hikes, they do so as their own dual mandate components tell them they should be normalizing monetary policy by now.

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“The problem with a financial panic is that panicked investors don’t care if the president is a Democrat or a Republican; they just want their money back.”

Markets Are Experiencing Cognitive Dissonance (Rickards)

Despite Trump’s best efforts and positive policies, a collapse could happen any day unless radical steps are taken to prevent it — such as breaking up big banks and banning derivatives. I’ve been warning about this for a while, but now mainstream economists see the danger too. Nobel Prize winner Robert Shiller, for example, sees a stock market crash coming that could be worse than 1929 or 2000. I hope he’s wrong. The problem with a financial panic is that panicked investors don’t care if the president is a Democrat or a Republican; they just want their money back. The same dynamic applies to natural disasters like tsunamis and earthquakes. Once the disaster starts, the dynamics have a life of their own and don’t care if the victims are liberals or conservatives.

Everyone gets hurt just the same. I’m not hoping for it, but this is a lesson Trump may learn the hard way. Above I said collapse means a violent stock market correction, a falling dollar and major rallies in bonds and gold. I expect the latter. The long-term trends favor gold if U.S. growth continues disappoint. The strong dollar story can’t last, so it won’t. The Trump administration has clearly signaled that the day of the strong dollar is over. When you see a coordinated attack on the dollar from the White House, the Treasury and the Fed, you can bet the dollar will weaken. That means a higher dollar price for gold. The dollar may get one last boost from a Fed rate hike in March, but after that, even the Fed will acknowledge that they got it wrong again and start another easing cycle with happy talk and forward guidance.

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Starting to look like a run-up to a Mexican stand-off.

Scots to Vote on Tuesday on May’s Draft Law to Trigger Brexit (BBG)

The Scottish Parliament will vote Tuesday on U.K. Prime Minister Theresa May’s draft law to formally trigger Brexit, a signal that the Scots want their views to be considered as the premier prepares to embark on two years of talks to leave the EU. May’s bill, which would allow her to invoke Article 50 of the EU’s Lisbon Treaty, the formal trigger for exit discussions, passed its first vote in Parliament in London on Wednesday. The draft law will now undergo three days of line-by-line debate in a so-called Committee Stage starting on Monday. Members of Parliament have so far filled a 128-page document with scores of proposed amendments to the 137-word bill, which will then be put to its final vote in the lower chamber, the House of Commons, before being sent up to the House of Lords.

“It is now essential that the Scottish Parliament’s views are heard prior to the end of the committee stage of the Article 50 bill in the House of Commons, so we will lodge a motion to allow Parliament to express its view,” Scottish Minister for U.K. Negotiations on Scotland’s Place in Europe Michael Russell said on Thursday in an e-mailed statement. “I believe that Parliament will send a resounding message that Scotland’s future is in Europe.” The plan by Russell’s Scottish National Party amounts to a political warning to May to heed its concerns as she prepares to negotiate a so-called “hard” Brexit, pulling Britain out of the EU’s single market and customs union, which allow free trade within the bloc. The Scottish vote has no power to affect whether May triggers Brexit because the Supreme Court ruled last month that the semi-autonomous legislature doesn’t get to vote on the process.

The SNP produced a detailed plan for Brexit before Christmas that seeks to force May to negotiate to keep Scotland in the single market, even if the rest of the country pulls out. SNP leaders have repeatedly said that Brexit may lead to another independence referendum in Scotland, which voted overwhelmingly to remain in the EU. May had aimed to trigger Brexit by the end of March without consulting with the central Parliament in London, but was forced to do so after losing a court ruling and subsequent appeal to the Supreme Court. She still aims to stick to her timetable, and is fast-tracking the Article 50 bill through Parliament, aiming to complete its passage through the Lords in early March.

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Institutionalization: The idea that success comes exclusively through attending a university has created a stigma against some of the most valuable occupations.

America’s Student Loans Problem Is Much Bigger Than Anybody Realized (TAM)

The Department of Education recently released a memo admitting that repayment rates on student loans have been grossly exaggerated. Data from 99.8% of schools across the country has been manipulated to cover up growing problems with the $1.3 trillion in outstanding student loans. New calculations show that more than half of all borrowers from 1,000 different institutions have defaulted on or not paid back a single dollar of their loans over the last seven years. This comes in stark contrast to previous claims and should call into question any statistics provided by government agencies. The American people haven’t fully grasped the long-term implications of loaning a trillion dollars to young people who have no credit or assets.

Increases in tuition seen over the past two decades have become a point of controversy and angst for those who don’t fully understand the contributing factors. Between 1995 and 2015, the average cost of a public, four-year university skyrocketed by well over 200%. Although federal student aid programs are often championed as a necessity, they have been instrumental in making higher education unaffordable. The opportunity to pay for college by working a part-time job evaporated as soon as huge sums of money were handed out to anyone with a pulse. Since students no longer pay their tuition upfront, colleges are able to raise prices in perpetuity, knowing the government will step in and make credit easier and easier to obtain. As an added bonus, outstanding student loans account for 45% of the government’s financial assets.

Subsidizing the lives of an entire generation has turned personal growth and advancement into a choice instead of a necessity. After all, why take risks or work your way up from the bottom when with just a signature, the life you’ve always wanted could be laid at your feet? It’s not hard to figure out why so many people are tempted to take advantage of the instant gratification that comes from student loans, but like everything else in life, they have a price. The same safety net that delays the anxiety of the future also ensures that monthly payments will be owed for decades to come. Procrastinating when faced with pivotal life decisions is an instinct that used to be overcome as a teenager, but today it is worn like a badge of honor well into adulthood.

The policies of intervention haven’t stopped at federal aid, and loan forgiveness is now being offered to those willing to work in the public sector or at a non-profit for ten years. This perverse incentive only serves to drive those desperately in debt further towards government dependence. Productive jobs are created when the needs of others are met in the free market, not by joining the ranks of the state for self-preservation. The idea that success comes exclusively through attending a university has created a stigma against some of the most valuable occupations. The lack of real skill sets has lead to a shortage of welders, electricians, carpenters, and other trade workers. Instead of learning through experience with apprenticeships, many students have embraced four years of sleeping in, drinking heavily, and getting an increasingly useless degree.

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Makes law look like religion.

Originalism: Neil Gorsuch’s Constitutional Philosophy (G.)

At his unveiling on Tuesday night as Donald Trump’s choice to fill the US supreme court vacancy, Neil Gorsuch paid homage not to the man standing beside him, who had just nominated him to one of the most powerful judicial positions in the country, but to a document written 230 years ago. Gorsuch, a federal appellate judge based in Denver, promised that should he get through the confirmation process he would act as a “faithful servant” to what he called “the greatest charter of human liberty the world has ever known”. He was referring to the US constitution, the supreme law of the land drafted in 1787. He was not being rhetorical. Gorsuch describes himself as an “originalist”, indicating that he places overwhelming importance on the original meaning of the constitution as it was understood by “we the people” at the time it was written.

That puts him in a very select group of judges – maybe no more than 30 – who identify themselves as “originalists”. What unites them is that they put as much emphasis on the original understanding of the US constitution as Christian fundamentalists say they put on the original wording of the Bible. Until his death last year, one of the most prominent members of the group was Antonin Scalia, the supreme court justice whom Gorsuch is now lined up to replace. Scalia helped spread the word of originalism among conservative judges in the 1980s as a way of pushing back on what he considered to be the increasingly outlandish opinions of his progressive peers. Judges were there, Scalia argued, not to make up their own laws or politically motivated judgments, but to cleave faithfully to the meaning of the framers’ writings as they were understood back in the 18th century by the American people.

“Originalists ask what the constitution meant at the time it was written, and then argue that the meaning is fixed – it doesn’t change because the world has changed and we now have new problems to deal with,” said Lawrence Solum, a professor at Georgetown Law who is a leading theorist of constitutional originalism. David Feder, a Los Angeles-based lawyer, had first-hand experience of what that meant to Gorsuch in practice when he worked as his law clerk on the federal 10th circuit court of appeals. “Whenever a constitutional issue came up in our cases, [Gorsuch] sent one of his clerks on a deep dive through the historical sources. ‘We need to get this right,’ was the motto – and right meant ‘as originally understood’,” Feder recalled recently in the Yale Journal of Regulation.

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Yeah, Erdogan really strikes me as a guy who would take kindly to being lectured by a woman.

And if the US are actually going to extradite Gulen, they will lose a lot of support in the region.

Angela Merkel Lectures Turkish President Erdogan On Upholding Freedoms (SMH)

German Chancellor Angela Merkel stressed the importance of freedom of opinion in talks with Turkish President Recep Tayyip Erdogan, during a visit meant to help improve frayed ties between the two NATO allies. In her first trip to Ankara since a failed military coup in Turkey last year, Dr Merkel said she had agreed with Mr Erdogan on the need for closer cooperation in the fight against terrorism, including against the Kurdistan Workers’ Party (PKK). Germany and Turkey have been at odds over Ankara’s crackdown on dissidents since the abortive July 15 coup, as well as its allegations – rejected by Berlin – that Germany is harbouring Kurdish and far-left militants.

“With the [attempted] putsch, we saw how the Turkish people stood up for democracy and for the rules of democracy,” Dr Merkel told a news conference on Thursday, when asked about concern over proposed constitutional changes that would strengthen Mr Erdogan’s powers. “In such a time of profound political upheaval, everything must be done to continue to protect the separation of powers and above all freedom of opinion and the diversity of society,” she said, adding she had also raised the issue of press freedom. “Opposition is part of democracy,” Dr Merkel said.

[..] Turkish Deputy Prime Minister Veysi Kaynak said on Wednesday that Berlin was sheltering members of what Ankara calls the “Gulenist Terrorist Organisation” (FETO), referring to the network of US-based Muslim cleric Fethullah Gulen, whom Turkey blames for the coup bid. “If the Gulenists involved in the coup are fleeing to Germany, the Justice Ministry may send information and documents,” Mr Erdogan said, adding that the United States should take quicker action on an extradition request for Mr Gulen. US President Donald Trump’s National Security Adviser,Michael Flynn, has in recent months suggested that Mr Gulen might be extradited as a show of Washington’s support for its Middle Eastern NATO ally. Turkey’s defence minister has urged Berlin to reject the asylum applications and warned that a failure to do so could damage relations. Berlin has said the applications will be considered on a case-by-case basis.

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Nothing good will come on continuing Europe’s current ‘policy’ with regards to Turkey. It will take Trump or Putin to tell Erdogan to shut up.

Turkey Refugee Deal With EU at Risk, Erdogan Adviser Warns (BBG)

An accord meant to stem the flow of refugees into Europe could collapse if Greece and Germany don’t extradite fugitive Turkish military officers involved in the botched July coup, a chief adviser to Turkish President Recep Tayyip Erdogan said. Erdogan has repeatedly threatened to throw open Turkey’s borders, accusing the European Union of failing to keep its side of the deal, which has run into turbulence following the Turkish government’s crackdown over the coup. Under the agreement, Turkey agreed to block the flow of refugees across its border into Europe in exchange for cash assistance and eased visa requirements for Turkish citizens.

“If Greece and Germany continue their negative attitude toward Turkey, then Turkey has no other option but to relax its hold on migrants,” Erdogan aide Ilnur Cevik said in an interview shortly before Germany’s Chancellor Angela Merkel sat down with Erdogan in Ankara, in part to discuss the accord. “Turkey has nothing to lose because Turkey has not gained anything” from the agreement, Cevik said. Greece has refused to extradite eight fugitive Turkish officers while about 40 others Turkey accuses of involvement in July’s failed coup sought asylum in Germany. “Merkel is coming to explain the unexplainable,” Cevik said. “We see that Germany continues to harbor those who have staged a coup in Turkey, he said.

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There are 57(!) NGOs ‘active’ on Lesbos.

Small Steps Taken To Improve Conditions At Lesvos Migrant Camp (K.)

Following the deaths of three migrants in less than a week and criticism from humanitarian groups, the government has started making progress in improving conditions at the Moria processing center on the eastern Aegean island of Lesvos. Steps have included moving 300 people, mostly families, to another facility at Kara Tepe and providing winter tents to 700 camp residents who were staying in shelters designed for summer despite the cold weather. Plans are also under way to develop a plot right beside the Moria center that has been leased by the Danish Red Cross but left unutilized because of reactions by locals against any initiatives to expand the camp. Meanwhile, Doctors Without Borders has accused the government of failing to provide migrants and refugees with basic necessities. The Moria camp is a “death camp for refugees and migrants,” the NGO said in an announcement on Thursday.

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Aug 142016
 


Harris&Ewing Goat team, Washington, DC 1917

Silicon Valley May Get Hit By China’s ‘Virtual Reality’ Economy (CNBC)
High-Risk ‘Shadow’ Credit in China Put at $2.9 Trillion by IMF (BBG)
Insanity, Oddities and Dark Clouds in Credit-Land (AM)
The Next President Should Forgive All Student Loans (TIME)
The Big Idea about Private Debt (Steve Keen)
How to Break the Power of Money (Korten)
TTIP: The Suicide of Nations (PCR)
How Global Elites Forsake Their Countrymen (Noonan)
Megaupload’s Dotcom To Seek A Review Of US Court’s Forfeiture Ruling (R.)
A Year After The Crisis Was Declared Over, Greece Is Still Spiralling Down (G.)
The Greek Crisis Will Flare Up Again. And Why Should It Not? (G.)
Aid and Attention Dwindling, Refugee Crisis Intensifies in Greece (NYT)
Germany To Send 3,000 Refugees Back To Greece (KTG)

 

 

Virtual money economy.

Silicon Valley May Get Hit By China’s ‘Virtual Reality’ Economy (CNBC)

“Japan 25 years ago and China now were both debt [and] currency fueled flood of cash into U.S. assets inflating both valuations and fears,” Josh Wolfe, co-founder and managing partner of Lux Capital, a $700 million venture capital firm, told CNBC via email this week. Like other skeptical investors, Wolfe believes there are “really two Chinas: A high growth tech and biotech driven economy conflated with a levered old asset state owned influenced burden of very bad decision making and governance.” China’s high debt, slowing growth and appetite for U.S. assets—the country already owns trillions in U.S. Treasuries and dollars—raises the stakes for tech companies if the country’s fortunes should suddenly reverse.

Of the nearly $60 billion that the National Venture Capital Association says was invested in U.S. startups last year, about a quarter of those flows came from one destination: China. Along with art and high end real estate, tech ventures have been the primary recipient of China’s largesse. Meanwhile, 2016 has already exceeded last year’s record flow of Chinese capital, according to recent figures from The Rhodium Group. Wolfe told CNBC that Chinese investors “are fleeing a virtual reality economy in China and funding virtual reality startups in the U.S. They seem to be choosing illiquidity and uncertainty, denominated in dollars over liquidity and certainty of devaluation denominated in yuan.”

China’s slowing economy has reverberated across the globe, sending commodities reeling and giving investors fright. That pain is far from over: The IMF warned on Friday that China’s real GDP could sink below 6% in 2020. If Chinese interest rates rise or liquidity tightens, the flood of money threatens to do “what all excesses do: reverse or stop,” said Lux Capital’s Wolfe. “As the China bubble pops, it has been commodities and commodity exporting countries in the first wave, then banks and non-performing loans, then it will be the assets they financed or were secured by.”

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Yuan+Junk=Yunk.

High-Risk ‘Shadow’ Credit in China Put at $2.9 Trillion by IMF (BBG)

IMF staff said that 19 trillion yuan ($2.9 trillion) of Chinese “shadow” credit products are high-risk compared with corporate loans and highlighted the danger that defaults could lead to liquidity shocks. The investment products are structured by the likes of trust and securities companies and based on equities or on debt – typically loans – that isn’t traded, staff members John Caparusso and Kai Yan said in a report released Friday. The commentary highlighted the potential for risks bigger to the nation’s financial stability than from companies’ loan defaults. While loan losses can be realized gradually, defaults on the shadow products could trigger risk aversion that’s harder to manage, the report said.

The “high-risk” products offer yields of 11% to 14%, compared with 6% on loans and 3% to 4% on bonds, the commentary said. The lowest-quality of these products are based on “nonstandard credit assets,” typically loans, it said. In a separate document in a bundle released by the IMF, the Chinese banking regulator was cited as saying that banks’ exposures to “nonstandard credit assets” were a key concern, with moves already made to require higher provisioning against such exposures than for regular loans.

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“Foreign buying of US assets very often reaches record highs prior to major financial accidents.”

Insanity, Oddities and Dark Clouds in Credit-Land (AM)

Bond markets are certainly displaying a lot of enthusiasm at the moment – and it doesn’t matter which bonds one looks at, as the famous “hunt for yield” continues to obliterate interest returns across the board like a steamroller. Corporate and government debt have been soaring for years, but investor appetite for such debt has evidently grown even more. A huge mountain of interest-free risk has accumulated in investor portfolios and on bank balance sheets. Globally, more than $13 trillion in sovereign bonds trade at negative yields to maturity. In spite of soaring defaults, junk bond yields have collapsed again as well. In short, insanity rules in the bond markets. A recent article in the FT informs us of “a wave of foreign demand for US corporate debt”:

“Record-low interest rates are no barrier for US companies finding buyers for their debt thanks to a relentless global quest for fixed returns that shows little sign of easing. The pace of US corporate debt sales – which has not been fast enough to quench investor demand – is expected to continue unabated driven by foreign buyers in a world where roughly $13tn of sovereign and corporate debt trades in negative territory. “It is a low return world,” says Ed Campbell, a portfolio manager with asset manager QMA. “You don’t have a lot of asset classes that are attractive and there is a flight to quality where the US is outperforming.” More than $2.3tn of dollar-denominated debt has been issued by companies and banks since the year began, including three of the ten largest corporate bond sales on record, Dealogic data show.”

This not only shows that “investors” (we use the term loosely) are insane, it also happens to be a contrary indicator. Foreign buying of US assets very often reaches record highs prior to major financial accidents. Is this really a “flight to quality?” Corporate defaults are currently at the highest level since 2009, with US defaults clearly leading the pack:

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And what should(s)he do for everyone else who’s in trouble? Can’t very well help only students.

The Next President Should Forgive All Student Loans (TIME)

If Hillary Clinton is to win this November, she needs to motivate the electorate to come out to vote for something more than a justified aversion to Donald Trump. Particularly for younger voters and voters with families, she has to capture their imaginations with a bold, simple, and common sense proposal to address one of the most critical financial and social problems currently facing a generation: the student loan crisis. And she needs to do so in a way that can do the most immediate good for the nation at large. First, all outstanding student loan debt should be forgiven. Second, a new loan program should be created that is tied to incentives for college graduates to choose careers in public service and which indexes repayment to income.

Current outstanding student loans amount to 1.3 trillion dollars, roughly 10% of all household debt. Student loan debt is larger than either car loans or credit card debt. Forty-two million Americans hold student loan debt. Student debt has been a drag on younger generations’ incomes and has contributed to the stagnation in middle class earnings. The average debt at graduation has skyrocketed from $10,000 in 1993 to more than $35,000 in 2016. Furthermore, the federal government has set interest rates on student loans at twice the current market rate of other types of loans. Going to college should not be a profit center for Wall Street and the federal government.

By forgiving student loan debt—which is largely held by the government—a tremendous economic stimulus would be generated, whose beneficiaries are people, not banks. The cost is comparable to the stimulus program created in the wake of the financial crisis of 2008, and, in this case, Main Street and not Wall Street will benefit. Quickly, more than two generations of Americans would be able to invest in homes and develop and support families. And the Americans who benefit are those who have obtained education and skills, but whose careers have been hobbled by an inordinate amount of debt.

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Private debt sinks societies. For no good reason. Make forgiving student debt part of a modern jubilee?!

The Big Idea about Private Debt (Steve Keen)

This is a talk I gave to the Northern Ireland Big Ideas Event organised by NICVA: the “Northern Ireland Council for Voluntary Action” (https://www.nicva.org/event/big-ideas-…). Unfortunately I ran out of time to finish my presentation on why a “Modern Debt Jubilee” is needed to escape from the current economic state of credit stagnation, but I covered why it is this–and not “secular stagnation” that explains the prevalence of low rates of economic growth globally.

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True but not strong.

How to Break the Power of Money (Korten)

Our current political chaos has a simple explanation. The economic system is driving environmental collapse, economic desperation, political corruption, and financial instability. And it isn’t working for the vast majority of people. It serves mainly the interests of a financial oligarchy that in the United States dominates the establishment wings of both the Republican and Democratic parties. So voters are rebelling against those wings of both parties—and for good reason. As a society we confront a simple truth. An economic system based on the false idea that money is wealth—and the false promise that maximizing financial returns to the holders of financial assets will maximize the well-being of all—inevitably does exactly what it is designed to do:

1. Those who have financial assets and benefit from Wall Street’s financial games get steadily richer and more powerful. 2. The winners use the power of their financial assets to buy political favor and to hold government hostage by threatening to move jobs and tax revenue to friendlier states and countries. 3. The winners then use this political power to extract public subsidies, avoid taxes, and externalize environmental, labor, health, and safety costs to further increase their financial returns and buy more political power. This results in a vicious cycle of an ever greater concentration of wealth and power in the hands of those who demonstrate the least regard for the health and well-being of others and the living Earth, on which all depend.

Fewer and fewer people have more and more power and society pays the price. A different result requires a different system, and the leadership for change is coming, as it must, from those for whom the current system does not work.

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“The agreements make global corporations immune to laws and regulations that can be said to adversely impact their profits.”

TTIP: The Suicide of Nations (PCR)

The TransAtlantic and TransPacific “partnerships” are the economic and financial counterpart to Washington’s military and foreign policy push for world hegemony. TTIP and TPP are neither partnerships nor trade agreements. They are instruments of financial imperialism that, if they come into effect, subordinate the sovereignty of countries to the profits of global corporations. The reason the “partnerships” are negotiated in secrecy without public discussions and the participation of the national legislatures is that the so-called agreements cannot stand the light of day. The reason is simple. The agreements make global corporations immune to laws and regulations that can be said to adversely impact their profits.

It makes no difference whether the laws protect the environment, the safety of food and workers or are part of the social fabric. If the laws impose costs that reduce profits, corporations can sue the governments in “corporate tribunals” in which the corporations themselves serve as judge and jury. This is no joke. Public Citizen reports that the agreements would greatly expand the privileges given to foreign corporations by the North American Free Trade Agreement under which $350 million has been paid out by governments to corporations because of costs of complying with toxic waste and logging rules, with $13 billion in claims pending.

Economist Michael Hudson cites a British study that public provision of health care, such as the UK’s National Health Service, is a TTIP target on the grounds that not only health care regulations but also public provision of health care harms the commercial interests of corporations. TTIP and TPP are tools for disenfranchising electorates and overturning democratic outcomes and for looting taxpayers via damage suits against governments for the costs of complying with health, safety, environmental, and social laws and regulations. The agreements place corporations above the laws of countries. The agreements have the potential of producing a worldwide sweatshop with starvation wages devoid of environmental and safety legislation.

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Curious ideas when coming from the Wall Street Journal.

How Global Elites Forsake Their Countrymen (Noonan)

On Wall Street, where they used to make statesmen, they now barely make citizens. CEOs are consumed with short-term thinking, stock prices, quarterly profits. They don’t really believe that they have to be involved with “America” now; they see their job as thinking globally and meeting shareholder expectations. In Silicon Valley the idea of “the national interest” is not much discussed. They adhere to higher, more abstract, more global values. They’re not about America, they’re about … well, I suppose they’d say the future. In Hollywood the wealthy protect their own children from cultural decay, from the sick images they create for all the screens, but they don’t mind if poor, unparented children from broken-up families get those messages and, in the way of things, act on them down the road.

From what I’ve seen of those in power throughout business and politics now, the people of your country are not your countrymen, they’re aliens whose bizarre emotions you must attempt occasionally to anticipate and manage. In Manhattan, my little island off the continent, I see the children of the global business elite marry each other and settle in London or New York or Mumbai. They send their children to the same schools and are alert to all class markers. And those elites, of Mumbai and Manhattan, do not often identify with, or see a connection to or an obligation toward, the rough, struggling people who live at the bottom in their countries. In fact, they fear them, and often devise ways, when home, of not having their wealth and worldly success fully noticed.

Affluence detaches, power adds distance to experience. I don’t have it fully right in my mind but something big is happening here with this division between the leaders and the led. It is very much a feature of our age. But it is odd that our elites have abandoned or are abandoning the idea that they belong to a country, that they have ties that bring responsibilities, that they should feel loyalty to their people or, at the very least, a grounded respect.

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“Did they think they can separate me from my kids without a fight? I fight corrupt US empire clowns all day, every day. Not even tired.”

Megaupload’s Dotcom To Seek A Review Of US Court’s Forfeiture Ruling (R.)

German tech entrepreneur and alleged internet pirate Kim Dotcom will seek a review of a Federal Court decision which rejected his bid to keep hold of millions of dollars in assets held in Hong Kong and New Zealand, his lawyer said. A three-judge panel of the 4th Circuit U.S. Court of Appeals ruled two to one on Friday that Dotcom could not recover his assets because by remaining outside the U.S., he was a fugitive, which disentitled him from using the resources to fight his case. Dotcom’s lawyer Ira P. Rothken said his client would seek a review of the decision in front of the full bench and, if necessary, petition the Supreme Court.

“This opinion has the effect of eviscerating Kim Dotcom’s treaty rights by saying if you lawfully oppose extradition in New Zealand, the U.S. will still call you a fugitive and take all of your assets,” Rothken said in an email to Reuters received on Sunday. Dotcom has been fighting extradition from New Zealand over charges of copyright infringement, racketeering and money laundering in the United States related to the Megaupload file-sharing site he founded in 2005. A New Zealand court ruled in December he could be extradited, but an appeal hearing has been set for later this month. Dotcom responded to the Federal Court ruling on Twitter. “Did they think they can separate me from my kids without a fight? I fight corrupt US empire clowns all day, every day. Not even tired.”

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The writedowns total down the road keeps growing rapidly.

A Year After The Crisis Was Declared Over, Greece Is Still Spiralling Down (G.)

In a side street in the heart of Athens, two siblings are hard at work. For the past year they have run their hairdressing business – an enterprise that was once located on a busy boulevard – out of a two-bedroom flat. The move was purely financial: last summer, as it became clear that Greeks would be hit by yet more austerity to foot the bill for saving their country from economic collapse, they realised their business would go bust if it continued operating legally. “We did our sums and understood that staying put made no sense at all,” says one sibling. “If we didn’t [offer] receipts, if we avoided taxes and social security contributions, we could just about make ends meet.”

They are far from being alone. A year after debt-stricken Greece received its third financial rescue in the form of international funding worth €86bn, such survival techniques have become commonplace. For a middle class eviscerated by relentless rounds of cuts and tax rises – the price of the country’s ongoing struggle to avert bankruptcy – the draconian conditions attached to the latest bailout are invariably invoked in their defence. Measures ranging from the overhaul of the pension system to indirect duties – slapped on beer, fuel and almost everything in between – and a controversial increase in VAT are similarly cited by Greeks now reneging on loan repayments, property taxes and energy bills.

Against a backdrop of monumental debt – €320bn, or 180% of GDP, the accumulation of decades of profligacy – fatalism is fast replacing pessimism on the streets. “Our country is doomed,” sighs Savvas Tzironis, summing up the mood. “Everything goes from bad to worse.” Close to half a million Greeks are believed to have migrated since the crisis begun, thanks to the searing effect of persistent unemployment (at just under 24%, the highest in Europe) and an economy that has shed more than a third of its total output over the past six years. The nation has been assigned some €326bn in bailout loans since May 2010 – the biggest rescue programme in global financial history. Yet the fear that it is locked in an economic death spiral was given further credence last week when Eurobank analysts announced that consumption and exports had also fallen, by 6.4% and 7.2%, in the second quarter of the year.

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And why should Larry Elliott not call a spade a spade? What’s happening to Greece is not some ‘policy mistake’, all parties involved know exactly what they do.

The Greek Crisis Will Flare Up Again. And Why Should It Not? (G.)

Greece has ceased to make headlines. A year ago, the TV cameras were trained on the protesters thronging the streets of Athens because there were fears that a crisis that had been steadily becoming more acute in the first half of 2015 could result in the single currency splintering. That threat was removed by a deal that involved a humiliating climbdown by the Syriza-led government. Greece received a bailout, but with harsh conditions attached. There were three obvious problems with that 2015 deal, which secured Greece its third bailout in five years. The first was that the new dose of austerity would make it more difficult for Greece to emerge from a slump just as severe as that which gripped the US in the 1930s.

The second was that Greece’s creditors were making unrealistic assumptions for growth and deficit reduction. The third was that sooner or later the Greek crisis would flare up again. It was a case of when, not if. It has not all been bad news over the past 12 months. Fears that yields on Greek bonds would soar after the UK’s Brexit vote did not materialise. Some of the tough capital controls that were imposed in the summer of 2015 to protect the banking system have been eased. There has been talk that by next summer it will be possible for the government in Athens to raise money in the world’s financial markets by selling Greek government bonds. All that said, though, the first two predictions have come true.

By last summer, Greece had suffered a five-year slump that was on a par with the damage caused to the US economy in the Great Depression. Yet the country’s creditors thought it was a good idea to suck even more demand out of the economy through spending cuts and tax increases. The result has been depressingly predictable. Far from there being a resumption of growth, the economy has continued to contract. Greece’s national output was 1.4% lower in the first three months of 2016 than it was a year earlier. Consumer spending was down by 1.3%. Nor, with confidence at rock bottom, is there much prospect of better times. Greece remains deep in recession.

[..] The IMF says that without debt relief, Greece’s debt could hit 250% of GDP by the middle of the century. Germany would prefer those discussions to be delayed until after its election in autumn next year. But the chances are that Greece will be back in the headlines before then.

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Oh, irony. Just a few days after I wrote about Greece’s 15 minutes of fame in Meanwhile in Greece.., both the Guardian and the NY Times happen to notice the same thing. “..ceased to make headlines..” , “..Attention dwindling..”

Aid and Attention Dwindling, Migrant Crisis Intensifies in Greece (NYT)

Seven months after the EU shut the doors to large numbers of newcomers, Greece remains Europe’s de facto holding pen for 57,000 people trapped amid the chaos. Many are living in a distressing limbo in sordid refugee camps on the mainland and on Greek islands near Turkey. A year after the world was riveted by scenes of desperate men, women and children streaming through Europe, international attention to their plight has waned now that the borders have been closed and they are largely confined to camps. Anti-immigrant sentiment has surged since last year in many countries, especially as people who entered Europe with the migrant flow are linked to crimes and, in a few cases, attacks planned or inspired by the Islamic State or other radical groups.

Neither the prosperous nations of Western and Northern Europe, where the refugees want to settle, nor Turkey, their point of departure for the Continent, are living up to their promises of help. [..] The ranks of those in limbo are most likely to grow despite a deal to resolve the crisis that took effect March 20 between the EU and Turkey. While the number of migrants entering Greece has dwindled from nearly 5,000 a day last year, hundreds have started crossing the Aegean Sea again after the July 15 coup attempt in Turkey. Few of the resources pledged by the EU to assist the asylum seekers and process their applications have actually come through, leaving the Greek authorities struggling to cope with a daunting humanitarian and logistical challenge that has fallen from view in the rest of Europe.

European Union member states have sent just 27 of the 400 asylum specialists and 24 of the 400 interpreters they had agreed to provide to process claims for refugees like Mrs. Madran. So far, 21,000 migrants have been registered for asylum; 36,000 have not. A union plan to ease Greece’s burden by relocating tens of thousands of asylum seekers to the Continent has also fizzled, with European countries taking less than 2,300 people.

The bottlenecks have overwhelmed many of the camps, especially on the Greek islands, where migrants arriving after the March 20 deal are supposed to be held until being deported to Turkey. That program has stalled because of legal challenges and because Greece must process each asylum application first. So far, 468 of the more than 10,000 people who have arrived since the deal took effect have been returned. Turkish monitors assigned to assist were fired by President Recep Tayyip Erdogan of Turkey after the coup attempt against him.

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“The cost for Greece since the beginning of the Refugee Crisis “is more than €2 billion, the EU has allocated so far €330million – not to the Greek government but to NGOs, mostly NGOs from abroad..” Makes you wonder how much of that €330million has actually been used to help refugees, and how much on NGO operating costs.

Germany To Send 3,000 Refugees Back To Greece (KTG)

I thought, EU members states were supposed to take 6,000 refugees per month from Greece – according to some forgotten EU Deal signed the European Commission and the EU member states. Reality teaches us, the deal will work the other way around. Member states will send refugees back to …Greece. Blame the Dublin III Agreement. Germany decided to send to Greece and specifically to Crete more than 3,000 refugees in first phase. Berlin considers that this number is “redundant” in its territory. According to local media ekriti.gr, the Greek government has adopted this German decision, while Migration Minister Yiannis Mouzalas chaired a revelant meeting in Herakleion recently and announced the transfer.

The refugees will start coming by plane initially in Heraklion and Chania in December. Mouzalas had said that they will come after the tourist season. Independent MEP Notis Marias also confirmed the transfer in an interview with Radio Kriti. The cost for Greece since the beginning of the Refugee Crisis “is more than two billion euro, the EU has allocated so far €330million – not to the Greek government but to NGOs, mostly NGOs from abroad,” ekriti notes. Meanwhile the influx from Turkey started to increase again, more than 650 refugees and migrants arrived last week. Athens is worried that Ankara will draw back from the EU-Turkey deal in October.

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Jun 132016
 
 June 13, 2016  Posted by at 8:28 am Finance Tagged with: , , , , , , , , , , ,  2 Responses »


G. G. Bain Police machine gun, New York 1918

Surging Yen Sends Nikkei Down 3.1% Amid Pan-Asia Sell-Off (CNBC)
Trading Floors Go Quiet Across Asia as Equity Desks Face the Ax (BBG)
Growing Corporate Debt a ‘Key Fault Line’ In China’s Economy: IMF (R.)
Chinese State-Owned Companies Face Greater Scrutiny Of EU Deals (R.)
Bank of America Shares Flash Bearish Signals Galore (MW)
About That US Economic Rebound… (ZH)
David Stockman’s View of Trump vs. Clinton (BBG)
US Student Loans Numbers Are Simply Mad (Gurdgiev)
The US Has Already Reinstated Debtors’ Prisons (NY Times)
Why I Am Voting To Leave The EU (AEP)
EU Chief Says Getting Closer To Granting Turks Visa-Free Travel (R.)
Negative Rates Drive Major Changes At European Pension Funds (II)
Frustrations of Telling the Truth (Paul Craig Roberts)
Over 2,500 Migrants Rescued Off Italy Over Weekend (AFP)

The surging yen is fixing to kill Abe(nomics).

Surging Yen Sends Nikkei Down 3.1% Amid Pan-Asia Sell-Off (CNBC)

Asian markets were sharply lower Monday, ahead of central bank meetings in the U.S. and Japan this week and amid jitters over the upcoming referendum on whether the U.K. would remain in the EU. Japan’s Nikkei 225 tumbled 3.09%, as fresh strength in the yen pressured stocks, with major exporters selling off. Shares of Toyota, Nissan, Honda and Sony traded down between 3.18 and 3.89%. The yen strengthened against the greenback ahead of the Bank of Japan’s two-day policy meeting starting June 15. Additionally, the yen is considered a safe-haven currency and increased concerns over the risk of a Brexit may be driving funds into the currency.

The currency pair traded at 105.98 as of 12:44 p.m. HK/SIN, compared with levels around 106.80 on Friday afternoon local time. “The BOJ … will likely delay a rate cut in the meeting, favoring a coordinated event when the government releases its fiscal stimulus package in Autumn,” said Stephen Innes, a senior foreign exchange trader at OANDA Asia Pacific. “This delay will likely appreciate the yen over the short term if the BOJ remains sidelined.”

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“Revenue from trading stocks in China and Hong Kong could fall 30% to 50% in the first half from a year earlier..”

Trading Floors Go Quiet Across Asia as Equity Desks Face the Ax (BBG)

Even by the boom-bust standards of Asia’s equity business, it’s been a turbulent 12 months. At this time last year, the industry was riding high as China’s stock market soared, volumes jumped to records and some of the biggest names in finance boosted hiring. Now, turnover is shrinking at the fastest pace since at least 2006 and banks are under growing pressure to either downsize their Asian equity desks, or exit parts of the business altogether. Investors and issuers are retrenching after Chinese shares crashed, the Federal Reserve tightened monetary policy and divisive political debates from the U.S. to Britain weighed on sentiment. Revenue from trading stocks in China and Hong Kong could fall 30% to 50% in the first half from a year earlier, according to senior executives at four firms.

Equity derivatives sales in Asia are on track to drop at least 50%, while prime brokerage is down roughly 20%, two of the executives said. “Because overall revenue is down, further cuts are likely across the industry,” said Taichi Takahashi at UBS in Hong Kong. “Some second-tier players will throw in the towel because their market share is shrinking.” Revenue for the industry in Asia slumped 32% to $2.6 billion in the first quarter from a year earlier, compared with a 20% drop worldwide, according to estimates from Coalition, a banking research firm. Regional equities headcount dropped by about 300, or 6%, Coalition figures show. Turnover on Asia’s 10 biggest exchanges has declined 69% from last year’s peak in May, the deepest slump over any period of the same length since Bloomberg began tracking the data in 2006.

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It’s corporate PLUS local government.

Growing Corporate Debt a ‘Key Fault Line’ In China’s Economy: IMF (R.)

China must act quickly to address mounting corporate debt, a major source of worry about the world’s second-largest economy, a senior IMF official said on Saturday. David Lipton, first deputy managing director of the IMF, warned in a speech to a group of economists in the southern city of Shenzhen that companies’ indebtedness is a “key fault line in the Chinese economy.” “Company debt problems today can become systemic debt problems tomorrow. Systemic debt problems can lead to much lower economic growth, or a banking crisis. Or both,” Lipton said, according to a copy of his prepared remarks provided to Reuters.

China, whose economy grew in 2015 at its slowest pace in a quarter of a century, has been grappling with rising debt levels and overcapacity. Last week, the People’s Bank of China warned in its mid-year work report that the government’s push to reduce debt levels and overcapacity could increase bond default risks and make it more difficult for companies to raise funds. Lipton said corporate debt in China stands at about 145% of GDP, a high ratio. He singled out state-owned enterprises, which he said accounted for about 55% of corporate debt but only 22% of economic output, according to IMF estimates.

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The EU is not all bad. Don’t let China buy your assets with monopoly money.

Chinese State-Owned Companies Face Greater Scrutiny Of EU Deals (R.)

Chinese state-owned companies seeking to buy European assets are going to face greater regulatory scrutiny following a landmark European Commission decision on a recent deal. In its review of a proposed joint venture between France’s EDF and state-owned China General Nuclear Power (CGN), the Commission – which has exclusive power over antitrust issues in the EU – ruled that CGN was not independent from China’s central administrator for state-owned enterprises, the State-owned Assets Supervision and Administration Commission (SASAC). As a result, it decided that it did have the power to decide whether the deal should be cleared.

It meant that the Commission didn’t only consider CGN’s own revenue but the combined revenue of all Chinese energy state-owned enterprises when considering whether the deal came under its jurisdiction. This approach automatically bumped CGN’s turnover above the minimum EU threshold for merger clearance, a warning shot for other Chinese state-owned enterprises (SOEs) who may be considering buying assets in Europe and were not anticipating needing to get a regulatory green light. The Commission generally only reviews a merger if each party to it has more than €250 million in sales in the EU as well as combined global sales of more than €5 billion. CGN’s turnover, alone, didn’t cross that €250 million threshold, but the Chinese energy SOEs as a whole do breach that level.

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Negative rates hurt.

Bank of America Shares Flash Bearish Signals Galore (MW)

The selloff in Bank of America stock Friday capped a week in which a number of bearish chart patterns were completed, implying potential for further declines to multi-month lows. The banking giant’s shares slumped 2.5% to close at $13.83 Friday. Volume of 89.6 million shares made them the most-actively traded on the NYSE, according to FactSet. The selloff comes as the yield on the 10-year Treasury note slumped to a three-year low of 1.639%, as part of a global bond rush that pushed yields on several government benchmarks to record lows. Lower long-term interest rates can hurt banks’ earnings, as they narrow the spread between what banks earn by funding longer-term assets, such as loans, with shorter-term liabilities.

Here are some of the bearish technical developments in BofA’s stock that have occurred this past week: • On Tuesday, the stock fell below an uptrend line, supported by three support points, that began at the Feb. 11 bottom. That suggests the short-term trend has flipped to negative. • The trendline breakdown occurred as the stock failed to get back above its 200-day moving average, which many see as a dividing line between shorter-term and longer-term trends. This indicates that the rally off the February low was just a minor bounce within a more dominant downtrend. • The stock closed Thursday below its 50-day moving average, which many use as a guide to the short-term trend. After the 50-day moving average held as support during the May pullback, the drop below it this week was a warning sign that the trendline break was for real.

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Forgive me for thinking this is clear enough.

About That US Economic Rebound… (ZH)

Following the steep drop in first quarter GDP which printed at 0.7% in the first revision, economists, strategists and pundits have once again put their collective hopes on another second-half rebound, with expectations for a Q2 rebound running high – the Atlanta Fed’s latest GDP nowcast stands at 2.5%. Unfortunately, this may once again be unwarranted. The reason: the collapse in retail spending which many had expected would be transitory and which has pressured discretionary consumer stocks in recent weeks, just refuses to go away. As we showed on Friday, both critical categories of retail sales (based on BofA credit and debit card spending data), there has been a dramatic collapse in both luxury …

… and home improvement related spending.

The math here is simple: without a strong rebound in spending, there simply can not be a strong rebound in GDP, period. Which, incidentally, is precisely what Goldman’s latest Current Activity Indicator – a real-time proxy for GDP – has found. Here is David Kostin in his latest US Weekly Kickstart: “The Goldman Sachs Economics US Current Activity Indicator (CAI) is a proxy for real-time GDP growth and the metric has slowed to 1.3%. Our economics colleagues expect GDP growth will accelerate to a 3.2% pace in 2Q and average 2.3% during 2H 2016.”

This was the lowest print in over five years. And here is why the Fed will not only not be hiking in June or July, or frankly any time soon. In fact, judging by this chart – and based on the recent collapse in global bond yields – the Fed’s next move will be to cut rates.

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I’m -mostly- with David on this.

David Stockman’s View of Trump vs. Clinton (BBG)


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No, really, America’s problem is debt. And the western world’s problem is debt. And China, and Japan.

US Student Loans Numbers Are Simply Mad (Gurdgiev)

If you like hockey stick charts, you’ll love these two covering U.S. student loans debt evolution over time:

The numbers are simply mad: total debt rose from around $100 billion ca 2006 to almost $1 trillion by the end of 2015. On a per capita of student population basis, same period rise was from around $16,000 per student to over $100,000 per student. More recent data, through May 2016 shows that average student debt is now at $133,000 and the total quantum of student loans outstanding is at over $1.2 trillion. Data from Bloomberg, through 2014, shows that Federal Government-originated student loans have increased 10-fold since 1990:


Source: Bloomberg, data from Collegeboard.org

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“.. in Ferguson, Mo., the average household paid $272 in fines in 2012, and the average adult had 1.6 arrest warrants issued that year..”

The US Has Already Reinstated Debtors’ Prisons (NY Times)

In the 1830s, the civilized world began to close debtors’ prisons, recognizing them as barbaric and also silly: The one way to ensure that citizens cannot repay debts is to lock them up. In the 21st century, the US has reinstated a broad system of debtors’ prisons, in effect making it a crime to be poor. If you don’t believe me, come with me to the county jail in Tulsa. On the day I visited, 23 people were incarcerated for failure to pay government fines and fees, including one woman imprisoned because she couldn’t pay a fine for lacking a license plate. [..] “It’s 100% true that we have debtor prisons in 2016,” says Jill Webb, a public defender. “The only reason these people are in jail is that they can’t pay their fines. “Not only that, but we’re paying $64 a day to keep them in jail — not because of what they’ve done, but because they’re poor.”

This is as unconscionable in 2016 as it was in 1830, and it is a system found across the country. In the last 25 years, as mass incarceration became increasingly costly, states and localities shifted the burden to criminal offenders with an explosion in special fees and surcharges. Here in Oklahoma, criminal defendants can be assessed 66 different kinds of fees, from a “courthouse security fee” to a “sheriff’s fee for pursuing fugitive from justice,” and even a fee for an indigent person applying for a public defender (I’m not kidding: An indigent person is actually billed for requesting a public defender, and if he or she does not pay, an arrest warrant is issued). Even the Tulsa County district attorney, Stephen Kunzweiler, thinks these fines are a ridiculous way to finance his office.

“It’s a dysfunctional system,” he says. A new book, “A Pound of Flesh,” by Alexes Harris of the University of Washington, notes that these modern debtors’ prisons now exist across America. Harris writes that in Rhode Island in 2007, 18 people were incarcerated a day, on average, for failure to pay court debt, while in Ferguson, Mo., the average household paid $272 in fines in 2012, and the average adult had 1.6 arrest warrants issued that year. “Impoverished defendants have nothing to give,” Harris says, and the result is a system that disproportionately punishes the poor and minorities, leaving them with an overhang of debt from which they can never escape.

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I agree with Ambrose for once. On balance, what’s negative about the EU far outweighs the advantages.

“Brexit vote is about the supremacy of Parliament and nothing else..“ “Where we concur is that the EU as constructed is not only corrosive but ultimately dangerous..”

Why I Am Voting To Leave The EU (AEP)

With sadness and tortured by doubts, I will cast my vote as an ordinary citizen for withdrawal from the European Union. Let there be no illusion about the trauma of Brexit. Anybody who claims that Britain can lightly disengage after 43 years enmeshed in EU affairs is a charlatan, or a dreamer, or has little contact with the realities of global finance and geopolitics. Stripped of distractions, it comes down to an elemental choice: whether to restore the full self-government of this nation, or to continue living under a higher supranational regime, ruled by a European Council that we do not elect in any meaningful sense, and that the British people can never remove, even when it persists in error. For some of us – and we do not take our cue from the Leave campaign – it has nothing to do with payments into the EU budget.

Whatever the sum, it is economically trivial, worth unfettered access to a giant market. We are deciding whether to be guided by a Commission with quasi-executive powers that operates more like the priesthood of the 13th Century papacy than a modern civil service; and whether to submit to a European Court (ECJ) that claims sweeping supremacy, with no right of appeal. It is whether you think the nation states of Europe are the only authentic fora of democracy, be it in this country, or Sweden, or the Netherlands, or France – where Nicholas Sarkozy has launched his presidential bid with an invocation of King Clovis and 1,500 years of Frankish unity. My Europhile Greek friend Yanis Varoufakis and I both agree on one central point, that today’s EU is a deformed halfway house that nobody ever wanted.

His solution is a great leap forward towards a United States of Europe with a genuine parliament holding an elected president to account. Though even he doubts his dream. “There is a virtue in heroic failure,” he said. I do not think this is remotely possible, or would be desirable if it were, but it is not on offer anyway. Six years into the eurozone crisis there is no a flicker of fiscal union: no eurobonds, no Hamiltonian redemption fund, no pooling of debt, and no budget transfers. The banking union belies its name. Germany and the creditor states have dug in their heels. Where we concur is that the EU as constructed is not only corrosive but ultimately dangerous, and that is the phase we have now reached as governing authority crumbles across Europe.

The Project bleeds the lifeblood of the national institutions, but fails to replace them with anything lovable or legitimate at a European level. It draws away charisma, and destroys it. This is how democracies die. “They are slowly drained of what makes them democratic, by a gradual process of internal decay and mounting indifference, until one suddenly notices that they have become something different, like the republican constitutions of Athens or Rome or the Italian city-states of the Renaissance,” says Lord Sumption of our Supreme Court.

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Tusk driving the final nail in Cameron’s coffin?!

EU Chief Says Getting Closer To Granting Turks Visa-Free Travel (R.)

The EU is getting closer to granting Turks visa-free travel to Europe, but talks on this will continue until at least October, EC President Donald Tusk said in an interview with German newspaper Bild published on Monday. Asked when Turks would be given visa freedom, Tusk said: “When they have fulfilled all of the conditions without exception.” He added: “The negotiations will certainly last until October but we’re getting ever closer.” The deal to give Turks visa-free travel in return for reducing the flow of illegal migrants to the bloc has been held up by a disagreement over Turkey’s anti-terror laws, which some in Europe see as too broad. Turkey says its needs the law to fight its multiple security threats. Last week Turkey said it expected a positive outcome in coming days in talks with the EU about visa-free travel for Turks.

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Want to see collapse in action? Watch pension plans.

Negative Rates Drive Major Changes At European Pension Funds (II)

In recent years European pension fund managers have been moving down the credit spectrum, wading into private markets, putting money into infrastructure and other illiquid assets; in short, doing almost anything to generate yield. But with negative interest rates strengthening their grip on Europe, many plan sponsors are realizing they can’t earn their way out of today’s dilemma. So even as they do what they can to diversify assets, pension funds are moving to curb their liabilities by limiting payouts to retirees, shifting to defined contribution-type models from defined benefit ones and taking other steps to make sure the money doesn’t run out. Consider Credit Suisse. The Zurich-based bank offers one of the more generous retirement plans in the country with the second-largest pension system in continental Europe.

But the pension fund, like most others in Switzerland, was blindsided by the Swiss National Bank’s January 2015 abandonment of its exchange rate ceiling, which sent the Swiss franc soaring and bond yields falling deeper into negative territory than anywhere in Europe. The Sf15.6 billion ($15.8 billion) fund saw its return plunge to 1.6% last year from 7.3% in 2014. Concerned that negative rates and ever-rising life spans put the financial health of the fund at risk, trustees late last year adopted a sweeping reform of the scheme that will gradually raise the retirement age, trim benefits for future retirees and shift workers with high salaries into a pure defined contribution savings plan for part of their incomes. “We do not want an underfunded situation,” says Matthias Hochrein, the plan’s chief operating officer.

In the Netherlands, which has Europe’s largest pension system by far in proportional terms, with assets worth nearly 184% of GDP, plans are also looking to tighten their belts. In recent weeks the country’s two largest plans -ABP, the €358 billion pension fund for civil servants, and PFZW, the €billion plan for health care workers- have warned that they may have to cut benefit payments to existing retirees next year because low interest rates have reduced their funding ratios to just a hair above 90%, the threshold that triggers mandatory remedial action.

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Well, at least we still can for now.

Frustrations of Telling the Truth (Paul Craig Roberts)

Some examples of the ‘abuse’ one gets when telling the truth: If I criticize the Israeli government for abusing Palestinians and stealing their country, the Israel Lobby accuses me of being an anti-semite who wants to repeat the holocaust. In the same batch of emails, anti-semites denounce me for being too easy on Israel and covering up for the Jewish conspiracy against mankind. When I write about the One Percent using the government to loot the economy, I receive emails blaming me because I worked for Reagan “who started it all by cutting tax rates for the rich.” These people have no conception of supply-side economics, its purpose, success, and the way it prepared the way for Reagan to negotiate the end of the Cold War. At one point in their lives they read a left-wing screed against Reagan, and that is the extent of their understanding. But they are full of blind hate.

When I write about Washington’s crimes against other countries, I receive emails asking me where I was during Iran-Contra and Grenada. Apparently, they think that a Treasury official can run the State Department and Pentagon. Some of the readers are so confused that they think Reagan overthrew Allende in Chile. Alllende was overthrown in 1973. Reagan was inaugurated in 1981. It is dispiriting that there actually are people this ignorant and so proud of it that they will accuse me of helping Reagan to overthrow Allende. When I point out the dangers of the reckless folly of Washington’s aggressions against Russia, China, and the independent Muslim world, superpatriots denounce me for being anti-American. There is a stratum of the US population that thinks that it is a criminal act to disbelieve the government or to question its judgment and motives. “You are with us or against us.”

When I document the death of the US Constitution and the rise of the American Police State, “law and order” conservatives admonish me that the police state only appies to terrorists and criminals and does not apply to law abiding citizens. They are convinced that Snowden and Assange are traitors, and no amount of evidence or reason can convince them otherwise. Neither can they be convinced that in the 21st century, law has become a weapon in the hands of government and no longer is a shield of the people. The Rule of Law in America is dead.

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While you were looking the other way…

Over 2,500 Migrants Rescued Off Italy Over Weekend (AFP)

More than 2,500 migrants seeking to reach Europe were rescued off the coast of Sicily over the weekend in 20 separate operations, the Italian coastguard said Sunday. Vessels from the Italian navy and coastguard took part in rescue operations, along with ships from volunteer and aid groups. Medical charity Doctors Without Borders said it had recovered one dead body from one of the migrant boats. Authorities said 1,348 migrants were picked up Saturday and 1,230 on Sunday. So far this year more than 48,000 people have been brought to the Italian coast after being pulled from boats trying to cross from Libya, according to the UN refugee agency. With the return of the good weather the rescue operations are expected to increase. For the time being the numbers arriving are similar to those seen last year and in 2014.

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Apr 162015
 


NPC Sidney Lust Leader Theater, Washington, DC 1920

Greece In ‘Slow-Death Scenario’ Amid Defaults Fears (CNBC)
IMF Knocks Greek Debt Rescheduling Hopes (FT)
The Endgame For Greece Has Arrived (Zero Hedge)
Why The Grexit Is Inevitable – How About May 9th? (Raas Consulting)
UBS Says Europe Risks Bank Runs On Grexit (Zero Hedge)
Fed’s Bullard Says Rate Hikes Are Needed For Coming ‘Boom’ (MarketWatch)
Warren Says Auto Lending Reminds Her Of Pre-Crisis Housing Days (MarketWatch)
27% Of US Students Are Over A Month Behind On Their Loan Payments (Zero Hedge)
China’s True Economic Growth Rate: 1.6% (Zero Hedge)
The South (China) Sea Bubble (Corrigan)
Don’t Invest In ‘Unsustainable’ China: Professor (CNBC)
The Major Paradox at the Heart of the Chinese Economy (Bloomberg)
China Seen Expanding Mortgage Bonds to Revive Housing (Bloomberg)
Bonds Beware As Money Catches Fire In The US And Europe (AEP)
ECB’s Mario Draghi Says Stimulus Is Working (WSJ)
Schaeuble Says Greece Must Ditch False Hopes, Commit to Reform (Bloomberg)
Schaeuble Criticizes Greece for Backsliding as Time Runs Out (Bloomberg)
Australia’s Economy: Is The Lucky Country Running Out Of Luck? (Guardian)
US Military Lands in Ukraine (Ron Paul Inst.)
Greece In Talks With Russia To Buy Missiles For S-300 Systems (Reuters)
Putin to Netanyahu: Iran S-300 Air Defense System is .. Defensive (Juan Cole)
Vatican Announces Major Summit On Climate Change (ThinkProgress)

“It would be a slow-death scenario and in a way we are in this scenario. Something needs to change in order to avoid an accident..”

Greece In ‘Slow-Death Scenario’ Amid Defaults Fears (CNBC)

Greece faces a “slow-death scenario”—including a default and messy exit from the euro zone—one analyst warned Thursday, as the country’s economic crisis took another turn for the worse following a credit rating downgrade. BofA’s Thanos Vamvakidis warned Thursday that if Greece fails to reach a deal with its European partners, a Grexit—or Greek exit from the euro zone becomes inevitable. His comments come after Greece’s unresolved negotiations with its international creditors prompted ratings agency Standard & Poor’s to cut its credit rating to “CCC+” from “B-” with a negative outlook.

“Without an agreement (with creditors over reforms), without official funding, there is a very high probability that Greece will default sometime in May and this could lead to a very negative scenario,” Vamvakidis told CNBC Thursday. He said that although nobody wants that, “the more they delay the higher the risks.” “(A Grexit) is not going to be overnight. It would be a slow-death scenario and in a way we are in this scenario. Something needs to change in order to avoid an accident,” he added. Reform discussions between Greece and the bodies overseeing its bailout program—the EC, ECB and IMF—have been unsuccessful over recent weeks. The country’s creditors agreed to extend its bailout program by four months in February in order to give Greece’s new leftwing government more time to enact reforms.

Lack of progress on reforms means Greece’s last tranche of aid—needed in order to make loan repayments to the IMF and ECB in the coming weeks and months—has not been released. [..] Despite growing fears of a euro zone exit, some euro zone officials have refused to countenance such a scenario, which could bring with it significant upheaval and potentially disastrous consequences for the euro zone. Not only could a default and Grexit prompt capital controls to prevent bank runs, international financial isolation and the introduction of a new currency in Greece, it could threaten the future of the 19-country single currency bloc.

Knowing that any such talk could spark international panic over Greece and the intergrity of the euro zone and its currency, the European Central Bank’s President Mario Draghi dismissed fears of a Greek default Wednesday, saying he was not ready to even “contemplate” such a scenario. Officials in the U.S. have openly warned over the risks posed by Greece, however. Greek Finance Minister, Yanis Varoufakis, is due to meet U.S. President Barack Obama on Thursday, and U.S. Treasury Secretary Jacob Lew on Friday (along with the ECB’s Draghi and IMF officials).

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Time for some US pressure?

IMF Knocks Greek Debt Rescheduling Hopes (FT)

Greek officials have made an informal approach to the IMF to delay repayments of loans to the international lender, highlighting the parlous state of Greek finances, but were told that no rescheduling was possible. According to officials briefed on the talks by both sides, Athens was persuaded not to make a specific request for a delay to the Fund, which is owed almost a €1bn in two separate payments due in May. Although Athens was rebuffed, the discussions, which occurred in private earlier this month, are a sign that the Greek government is finding it increasingly difficult to scrape together enough money to continue to pay wages and pensions while meeting its debt payments to external lenders.

Officials representing Greece’s creditors are unsure whether Athens will be able to make the payments in May. Even if they do, they are certain that the matter will come to a head by June, before much larger payments on bonds held by the ECB start coming due.
IMF officials have repeatedly said that a rescheduling of repayments can only come as part of a completely renegotiated new bailout programme. Were it to miss a payment, Greece would become the first developed economy to go into arrears at the Fund, something only counties like Zaire and Zimbabwe have done in the past.

Greece informally raised the precedent of delaying IMF payments by at least one other developing country a generation ago in the 1980s. But IMF officials stuck to their guns saying that none of the underlying problems had been solved by payment delays. One source briefed on the approach said the proposal was to “reshuffle the repayment schedule for the IMF loan over the coming months,” allowing the new Greek government led by Alexis Tsipras to have the money to pay bills for pensions and public sector salaries while negotiating with European creditors over payment of the next tranche of bailout loans.

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“..the Greek Finance Minister “will on Friday meet with infamous sovereign debt lawyer Lee Buchheit, who has helped numerous countries restructure their debt.”

The Endgame For Greece Has Arrived (Zero Hedge)

To think it was just recently in September of last year when the S&P, seemingly unaware of the tragic reality facing Greece in just a few months (by reality we meen democratic elections which overthrew the previous regime which was merely a group of Troika picked technocrats), upgraded Greece to B and said “The upgrade reflects our view that risks to fiscal consolidation in Greece have abated.” Well, the risks have unabated, and two months after S&P flip-flopped and downgraded Greece back to B- on February 6, moments ago it downgraded it again, this time to triple hooks, aka the dreaded CCC+. S&P said that without deep economic reform or further relief, S&P expects Greece’s debt, other financial commitments to be unsustainable. S&P views that Greece increasingly depends on favorable business, financial, and economic conditions to meet its financial commitments.

The rater adds that “conditions have worsened due to the uncertainty stemming from the prolonged negotiations between the Greek govt and its official creditors” and that economic prospects could deteriorate further unless talks between Greece and its creditors conclude soon.” In short: Greece is about to default and/or exit the Eurozone so this time at least S&P is prepared. Ironically this comes a day before Varoufakis is set to meet with Obama. It will be followed by meetings with European Central Bank head Mario Draghi on Friday, Secretary of the Treasury Jack Lew, Italy’s finance minister Pier Carlo Padoan and IMF officials. But, as City AM reports, the biggest news is that the Greek Finance Minister “will on Friday meet with infamous sovereign debt lawyer Lee Buchheit, who has helped numerous countries restructure their debt. Buchheit is a partner at top US law firm Cleary Gottlieb.”

It comes just a week before a vital meeting of Eurozone finance ministers on 24 April which could be the last chance Greece has of gaining extra funds before hefty repayments are due to its creditors in May.

As a reminder, “Lee Buchheit, a leading sovereign-debt attorney and the man who managed the eventual Greek debt restructuring in 2012, was harshly critical of the authorities’ failure to face up to reality. As he put it, “I find it hard to imagine they will now man up to the proposition that they delayed – at appalling cost to Greece, its creditors, and its official-sector sponsors – an essential debt restructuring.” The endgame for Greece has arrived.

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One kind of logic.

Why The Grexit Is Inevitable – How About May 9th? (Raas Consulting)

One thing in common for almost all of my Pinewood International Schools (TiHi to some) class of ’78 is that we left. Many still live in Greece and in Thessaloniki or have returned, and they are closest to the pain. The real pain of the past decade, that has destroyed wealth and hope. Unemployment is running at levels not see in Europe since after the war, and at levels that encouraged the socialist – fascist civil wars of the 1930s. Those did not end well.

But that does not explain why the Grexit is inevitable, and why it will happen very soon.
1) This is what the Greek people voted for. No, they did not vote to stay in the Euro, they voted for the party that said it would reduce the debt and meet pension obligations. The Greek people and voters are not stupid. They knew this could only happen by either the rest of Europe bailing out Greece again, or by leaving the Euro.
2) The Greek people know perfectly well that Europe is not going to bail them out, because to do so will only set everyone up for the next bailout.
3) The Greek people, and the rest of Europe, know full well that the debt will never be repaid, and that the Troika are now acting as nothing better than the enforcers of loan sharks.
4) Syriza knows that it had six months before the voters would throw them out, and once out, Syriza would never come back.
5) The Greeks needed to show “good faith” in actually attempting to negotiate a resolution with the Troika. This has now been done, and is failing.
6) The demand for reparations from Germany is designed not to actually extract the reparations, but to anger the Germans to the point that they will block any compromise that Syriza would have been required to accept.

The Greek government, elected by a battered and exploited Greek people, has been establishing the conditions that will give them the moral high ground (in the eyes of their voters) needed to actually leave the Euro. Having set the conditions, when will it happen? I’m still guessing May 9th. Why? Greece will leave the Euro, and they will do it sooner than later. They’ve made the April payment, but simply do not have the money for the May or June payments, and they cannot pass the legislation required by Europe and the Germans and stay in power. That gives us a late May or June date. So why earlier?

Capital flight. Imposing currency controls will be a fundamental element of any Grexit. Accounts will be frozen, and any money in accounts will be re-denominated in New Drachmas. Once the bank accounts are unfrozen, the residual, former Euros will now be worth whatever the New Drachma has dropped to, and the drop will be significant, over–correcting to the downside. Once it is accepted that the Grexit is coming and there will be no last minute deal, and with memories of Cyprus too fresh in every Greek’s mind, the money will flow out of the country. Not just corporate money (most of which is probably off-share already) but any remaining personal money in bank accounts. So Greece has to move before the coming Grexit is perceived as inevitable, and the money starts to flow out.

Weekend event. When the Grexit happens, it will be on a weekend. The banks will be closed, parliament will be called into emergency session, and a packet of laws will be passed. As this needs to be on a Saturday to avoid wholesale capital flight the moment that parliament is called into session, were it a weekday. This leaves only a few possible dates. And where there are few possible dates, I’m punting on the earlier date, so earlier in May. And looking at the calendar, that leaves us with May 2nd, 9th or 16th. My own guess is that the 2nd is too soon, and the 16th is too late. That leaves me guessing May 9th.

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It is pretty silly that anyone would doubt this. Or believe reassurances to the contrary.

UBS Says Europe Risks Bank Runs On Grexit (Zero Hedge)

UBS: When examining the risk of contagion from any possible Greek exit from the Euro we come back again and again to the fact that in every monetary union collapse of the last century, the trigger for breakup was not the bond markets, current account positions, or political will, but banks. If ordinary bank depositors lose faith in the integrity of a monetary union they will hasten its demise by shifting their money out of their banks – either into physical cash, or into banks domiciled in areas of the monetary union that are perceived as “stronger”. Both of these traits were evident in the US monetary union breakup, and have been in evidence in more recent events this century.

The contagion risk after a possible Greek exit arises if bank depositors elsewhere in the Euro area believe that a physical euro note held “under the mattress” at home today is worth more than a euro in a bank – because a euro in a bank might be forcibly converted into a national currency tomorrow. In a breakup scenario it is more likely that retail bank deposits withdrawn will end up as physical cash, owing to the difficulties of opening and using a bank account in a different country. This is not a question of banking system solvency. Highly solvent banks will be subject to deposit flight if it is the value of the currency in that country that is uncertain…

The contagion story is serious. Even if a depositor thinks that there is only a 1% chance their country will exit the Euro, why take a 1% chance that your life savings are forcibly converted into a perceived worthless currency if by acting quickly (and withdrawing deposits) one can have 100% certainty that your life savings remain in Euros? If Greece were to walk away from the Euro, then the policy makers of the Euro area would have to convince bank depositors across the Euro area that a Euro in their local banking system was worth the same as a Euro in another country’s banking system, and that the possibility of any other country exiting the Euro was nil. If that double guarantee was not utterly credible, then the risk of other countries joining Greece in exiting the Euro would be high.

This suggests that financial markets are treating the risks around Greek exit with too little regard for the probable dangers.

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Like before the recovery gets out of hand.

Fed’s Bullard Says Rate Hikes Are Needed For Coming ‘Boom’ (MarketWatch)

A leading hawk on the Federal Reserve on Wednesday made a case for raising interest rates soon, arguing the level needs to be appropriate for the coming “boom” for the U.S. economy. St. Louis Fed President James Bullard, speaking at the annual Hyman Minsky conference here, acknowledged a boom by current standards might not be the same as the growth in the late 1990s. He pointed out that even if gross domestic product expanded just 1.5% in the first quarter, the four-quarter growth rate would be about 3.3%.With the current potential growth around 2%, growth in the low 3% range “represents growth well above trend,” he said. The first reading on first-quarter GDP is due April 29. Unlike his colleagues, Bullard expects the unemployment rate to fall below 5% from a current level of 5.5%. Bullard said jobless rates in the 4% range are consistent with a boom.

In his remarks, he notably did not specify a month to lift interest rates, and asked by reporters afterwards, he said, “I’m being deliberately vague.” The June meeting is considered the first in which the Federal Open Market Committee will give serious consideration to lifting interest rates. His biggest fear from keeping low rates — they have been near zero for 6.5 years — is that they could lead to financial-stability problems later. He said asset valuations currently look fairly valued, with the notable exception of bonds which Fed policy influences. “So it’s hard to know what that really means.” But he pointed out that Fed policy typically impacts the economy with a lag. “Boom times ahead, plus us already charting out low interest rates, sounds like risky from a bubble perspective,” he said.

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She’s not the only one. But perhaps she should have said this a year ago.

Warren Says Auto Lending Reminds Her Of Pre-Crisis Housing Days (MarketWatch)

Senator Elizabeth Warren on Wednesday used a major address on financial regulation to chide automobile lending practices as she continued her criticism of the country’s largest banks. Warren was speaking on the topic of the unfinished business of financial reform, and looking at the financial sector five years after the passage of the Dodd-Frank reform law. Warren, the leading contender to block a Hillary Clinton presidential nomination on the Democratic side if she were to step into the race, took particular aim at the fast-growing automobile lending category. “Right now, the auto loan market looks increasingly like the pre-crisis housing market, with good actors and bad actors mixed together,” the Massachusetts Democrat said.

“The market is now thick with loose underwriting standards, predatory and discriminatory lending practices, and increasing repossessions.” Warren pointed out that car dealers got a specific exemption from the Consumer Financial Protection Bureau, the agency which Warren all but singlehandedly brought to life. “It is no coincidence that auto loans are now the most troubled consumer financial product. Congress should give the CFPB the authority it needs to supervise car loans – and keep that $26 billion a year in the pockets of consumers where it belongs,” she said, referring to an estimate of dealer markups.

The CFPB has taken some steps in the area of automobile loans and has proposed a rule that would bring larger auto lenders that are not already banks under its jurisdiction. Warren was on more familiar ground with her call to break up the nation’s banks. She pointed out that last summer the Federal Reserve and the Federal Deposit Insurance Corp. said 11 banks were risky enough to bring down the U.S. economy if they were to fail. She also blasted the Justice Department, the Federal Reserve and the Securities and Exchange Commission for timidity in going after major banks. “The DOJ and SEC sit by while the same giant financial institutions keep breaking the law — and, time after time, the government just says, ‘Please don’t do it again.’ ”

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How much further must this go before something is done?

27% Of US Students Are Over A Month Behind On Their Loan Payments (Zero Hedge)

As we’ve documented exhaustively in the past, the country is laboring under around $1.3 trillion in non-dischargeable loans to students which isn’t a good thing, especially in a country where the jobs driving the economic “recovery” have, until last month, been created in the food service industry and where wage growth is a concept reserved for only 20% of the workforce. It would seem that this could make it increasingly difficult for students to repay their debt, especially considering how quickly tuition costs have risen. In other words, tuition is going up, wages aren’t, and the latter point there is only relevant in the event you find a job that pays you a wage in the first place (i.e. where your compensation isn’t determined by the generosity of the “supervisory” Americans who can still afford to eat out).

The severity of the problem has been partially masked at times by the tendency to inflate the denominator when one goes to calculate delinquency rates. That is, if you include all student debt outstanding, even that in deferment or forbearance in the denominator, then clearly the delinquency rate will be biased to the downside because the numerator will by necessity only include those students who are currently in repayment. That’s really convenient if you want to make things look less bleak than they actually are.

Of course you can’t be delinquent when you aren’t yet required to make payments, so the more accurate way to calculate the figure would be to include only those students in repayment in the denominator. This apples-to-apples comparison is likely to paint much more accurate picture and sure enough, a new St. Louis Fed (who recently documented the shrinking American Middle Class) study finds that the delinquency rate for students in repayment is 27.3%, well above the 17% figure for all student borrowers. Here’s more:

[..] if we adjust the delinquency rate to consider that only a fraction of the borrowers have payments due, this level of delinquency is very concerning: A delinquency rate of 15% for all student loan borrowers implies a delinquency rate of 27.3% for borrowers with loans in repayment. This level of delinquency is much higher than for any other type of debt (credit cards, auto loans, mortgages, and so on).

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That feels more like it. Over 70% of capital invested in housing, which fell 6%…

China’s True Economic Growth Rate: 1.6% (Zero Hedge)

Cornerstone Macro reports, “Our China Real Economic Activity Index Slowed To Just 1.6% YY In 1Q.” The indicator in question looks at many of the components shown above, such as retail sales, car sales, rail freight, industrial production, and several others, to determine an accurate indicator of the true state of China’s economy. It finds that not only is China’s economic growth rate not rising at a 7.0% Y/Y rate, but is in fact the lowest it has been in modern history! And a 1.6% growth rate by what was formerly the world’s most rapidly growing (and largest according to the IMF) economy explains perfectly what happened with the US economy over the past 6 months. Hint: it has nothing to do with the winter, and everything to do with China hard landing into a brick wall.

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“China is currently enjoying the somewhat dubious fruits of one of the all-time great stock manias.”

The South (China) Sea Bubble (Corrigan)

The first hard data release of the month for China was hardly guaranteed to reassure. Two-way trade in USD terms dropped 6.3% in the first quarter from its level of a year ago, the second most severe setback since the Crash and only the third such instance in the whole era of ‘Opening Up’. From a strictly local perspective, the bad news was mitigated by the fact that exports managed to eke out a modest YOY gain of 4.7% (though that still means they were effectively unchanged from 2013 levels) and so the trade surplus was left at a record seasonal high. For the rest of us, however, anxious as we are to sell more of our wares to China, there was no such comfort. Imports plunged by more than a sixth to a four-year low, registering a drop which, if nowhere near as large in percentage terms, was, when measured in numbers of dollars, equal to that suffered in the global freeze which ensued in the aftermath of the Lehman collapse.

Though it always does to await the full data release for the first quarter – given the inordinate impact on comparisons of that highly moveable feast, the Lunar New Year – these numbers are fully consonant with the evidence presented during the first two months which showed flat non-residential electricity use and rail freight volumes down to seven year seasonal lows. It is undoubtedly the case that the bulk of the pain being felt is concentrated where it should be – up in the dirty, surplus capacity-plagued end of heavy industry and extraction – but, nevertheless, Chinese data show that 12-month running profits have dwindled to zero (if we strip out companies’ non-core – qua speculative – activities) and that for the last three months for which we have numbers they had actually declined in a manner not seen since the world stood still in late 2008/early 2009.

Revenue growth was also sickly, while balance sheets continue to swell with debt and receivables. Granted, private joint-stock companies continue to outperform their state-owned peers – or so the NBS would have us believe – but, even here, core profit growth over the whole of 2014 was a mere 4.2% with turnover up 9.2% (suggesting that margins simultaneously contracted). In such an environment, you might think that investor spirits would be dampened but, as anyone who has opened a paper in recent days will be aware, that is very much far from being the case.

Indeed, China is currently enjoying the somewhat dubious fruits of one of the all-time great stock manias. The CSI300 composite of Shanghai and Shenzhen equities has double since last July, with the seven-eighths of those gains coming in the last six months and almost a third of them in the past six weeks. With first Y1 trillion then Y1.5 trillion trading days being recorded and with 1.6 million [sic] new trading accounts being opened in the latest week for which we have the numbers, it is easy to see that this has rapidly degenerated into an indiscriminate free-for-all.

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“..a Keynesian-on-steroids stimulus that occurs at the municipal level by building all sorts of public infrastructure that requires stealing land from farmers..”

Don’t Invest In ‘Unsustainable’ China: Professor (CNBC)

China bear Peter Navarro is telling investors not to put their money in the country because its economic model is unsustainable. “What you got is a mercantilist export-driven model for China coupled with a Keynesian-on-steroids stimulus that occurs at the municipal level by building all sorts of public infrastructure that requires stealing land from farmers,” the University of California, Irvine economics professor told CNBC’s “Power Lunch” on Wednesday. Navarro, who co-wrote “Death By China,” attributes China’s slowing growth to less demand coming from the U.S. and Europe for Chinese exports.

“The problem is simply that Europe and the U.S., which provided the 10% growth year after year for three decades, are now too weak to sustain that,” he said. In addition, China is facing rising wages, labor issues, water shortages and a stock market and real estate bubble, Navarro said. On Wednesday, China’s statistics bureau announced that GDP grew an annual 7% in the first quarter, slowing from 7.3% in the previous quarter. That was the country’s slowest pace of growth in six years, suggesting the world’s second-largest economy was still losing momentum.

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“..every investment-led growth miracle in the last 100 years has broken down.”

The Major Paradox at the Heart of the Chinese Economy (Bloomberg)

“The latest GDP report underscores offsets coming from China’s services-led transformation — a key underpinning of consumer demand,” said Stephen Roach… “I suspect the economy is close to bottoming and could well begin to pick up over the balance of this year.” Chinese officialdom has little choice but to tap on the brakes of the old-line economy. Years of politically driven investment with diminishing returns led to too much debt and industrial overcapacity, as well as ghost towns with unfinished hotels and unoccupied residential towers. Bad debt piled up at a faster pace at China’s big state banks in the fourth quarter. Meanwhile, the country’s total debt — government, corporate and household — rose to about $28 trillion by mid-2014, according to an estimate by McKinsey, or about 282% of GDP.

Xi and Premier Li Keqiang are trying to defuse that debt bomb, rein in banks and local governments and promote the nation’s stock markets as a primary way for innovative and smaller companies to raise capital. Both leaders say they’ve mapped out more than 300 reforms that over time will reduce state intervention in the economy. Among the initiatives is scaling back energy-price controls that favor manufacturers. The changes are also designed to improve the social safety net and encourage market-driven deposit rates to get Chinese families saving less and spending more.

Few countries with the scale of China’s credit boom have escaped unscathed without experiencing some sort of banking crisis. Research by Michael Pettis, a finance professor at Peking University, shows that “every investment-led growth miracle in the last 100 years has broken down.” Avoiding that fate requires a high-wire balancing act for the government. It needs to wind down the torrent of investment – 49% of China’s GDP from 2010 to 2014 – without cratering the economy and worsening the situation for indebted local governments or the bad-debt burden of Chinese banks.

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Anything goes by now?!

China Seen Expanding Mortgage Bonds to Revive Housing (Bloomberg)

China is poised to expand mortgage bonds to lift its slumping real estate market that accounts for a third of the economy. Officials will likely allow banks to sell commercial mortgage-backed notes for the first time by the end of the year after reviving securities tied to home loans in 2014, according to China Merchants Securities Co. and China Chengxin International Credit Rating Co. The offerings, which help banks boost mortgage lending by freeing space on balance sheets, will grow “substantially” this year, China Credit Rating Co. said. The government of Premier Li Keqiang eased home-purchase rules after new housing prices slid in many cities across China in February.

Authorities, who halted securitization in 2009 after subprime mortgage bonds triggered the global financial crisis, are returning to such offerings to spur an economy growing at the slowest pace since 1990. “The launch of commercial mortgage-backed securities may send a strong policy signal because it will give banks more space to lend money directly to property developers,” said Zuo Fei, a Shenzhen-based director of structured finance at China Merchants Securities, underwriter of the first RMBS deal this year. “The regulators are trying to improve property purchases in a gradual and an appropriate way.”

The People’s Bank of China on March 30 cut the required down payment for some second homes to 40% from 60% and has reduced benchmark interest rates twice since November. The central bank and the China Banking Regulatory Commission said on Sept. 30 that they will encourage lenders to issue mortgage-backed securities. The government is trying balance efforts to provide new financing with steps to rein in unprecedented borrowing. Real estate companies sold a record $44.4 billion-equivalent of bonds in 2014, data compiled by Bloomberg show. In the latest sign of industry stress, Kaisa Group Holdings Ltd., based in the southern city of Shenzhen, is seeking a restructuring that would impose noteholder losses, fueling speculation that builder defaults may spread.

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Is Ambrose seeking to offset the bleak views he posted lately?

Bonds Beware As Money Catches Fire In The US And Europe (AEP)

Be thankful for small mercies. The world economy is no longer in a liquidity trap. The slide into deflation has, for now, run its course. The broad M3 money supply in the US has been soaring at an annual rate of 8.2pc over the past six months, harbinger of a reflationary boomlet by year’s end. Europe is catching up fast. A dynamic measure of eurozone M3 known as Divisia – tracked by the Bruegel Institute in Brussels – is back to growth levels last seen in 2007. History may judge that the ECB launched quantitative easing when the cycle was already turning, but Italy’s debt trajectory needs all the help it can get. The full force of monetary expansion – not to be confused with liquidity, which can move in the opposite direction – will kick in just as the one-off effects of cheap oil are washed out of the price data.

“Forecasters ignore broad money at their peril,” says Gabriel Stein, at Oxford Economics. Inflation will soon be flirting with 2pc across the Atlantic world. Within a year, the global economic landscape will look entirely different, with an emphasis on the word “look”. In my view this will prove to be mini-cyclical in a world of “secular stagnation” and deficient demand, but mini-cycles can be powerful. Mr Stein said total loans in the US are now growing at a faster rate (six-month annualised) than during the five-year build-up to the Lehman crisis. “The risk is that the Fed will have to raise rates much more quickly than the markets expect. This is what happened in 1994,” he said. That episode set off a bond rout. Yields on 10-year US Treasuries rose 260 basis points over 15 months, resetting the global price of money. It detonated Mexico’s Tequila crisis.

Bonds are even more vulnerable to a reflation shock today. You need a very strong nerve to buy German 10-year Bunds at the current yield of 0.16pc, or French bonds at 0.43pc, at time when EMU money data no longer look remotely “Japanese”. Granted, there may be tactical reasons for buying Bunds, even at negative yields out to eight years maturity. Supply is drying up. Berlin is pursuing a budget surplus with religious zeal, paying down €18bn of debt over the past year. It has left the Bundesbank little to buy as it launches its share of QE. Yet this is collecting pfennigs on the rails of a high-speed train. The German property market is on the cusp of a boom. David Roberts, of Kames Capital, warns of a “poisonous cocktail” of resurgent inflation and rising wages. “If you look at Bunds in anything other than the shortest possible timescale, the risk becomes very clear.”

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Dick Tator. Mr. Dick Tator.

ECB’s Mario Draghi Says Stimulus Is Working (WSJ)

European Central Bank President Mario Draghi said the bank’s stimulus efforts are beginning to take hold in the European economy and batted away concerns in financial markets that the bank may have to end its more than €1 trillion ($1.1 trillion) asset purchase program early. Mr. Draghi’s Wednesday news conference, held after the ECB decided to keep interest rates and other policies unchanged, was briefly interrupted by a confetti-throwing protester who jumped on the table where Mr. Draghi was seated and shouted “end the ECB dictatorship” as he began his opening remarks.

Mr. Draghi, who appeared unfazed by the ruckus after being whisked away by his bodyguards to a side room for a few minutes, said the bank’s stimulus drive is “finally finding its root” in the economy through easier credit conditions and lower inflation-adjusted interest rates. “The euro area economy has gained further momentum since the end of 2014,” said Mr. Draghi. “We expect the economic recovery to broaden and strengthen gradually.” Still, Mr. Draghi said the region’s recovery depends on full implementation of the ECB’s policies. Those include a record-low lending rate that the ECB kept unchanged Wednesday; cheap four-year loans to banks; and a €60 billion-a-month program to buy mostly government bonds that the ECB launched last month and intends to continue through September 2016.

On Tuesday, the IMF raised its forecast for eurozone growth this year to 1.5% from 1.2%. Though well below the levels of growth the U.S. has achieved during its recovery, it was a welcome development for a region that last year narrowly escaped its third recession in six years. Mr. Draghi cited a long list of reasons why this recovery should continue whereas previous ones have faltered. Lower oil prices, which cut costs for businesses and households, are joining the ECB’s stimulus in boosting the economy, Mr. Draghi said, noting that business and consumer confidence is up and that there should be fewer headwinds from fiscal policy.

[..] Mr. Draghi also played down concerns that the superlow interest rates brought on by the ECB’s policies could fuel bubbles in financial markets. “So far we have not seen evidence of any bubble,” he said, adding that regulatory policies, known as macroprudential tools, would be “the first line of defense” if imbalances started to form. He sidestepped questions about how the ECB would react in the event Greece isn’t able to reach agreement with its international creditors to unlock bailout funds, saying developments are “entirely in the hands of the Greek government.”

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Schaeuble needs to stop telling Greece what to do.

Schaeuble Says Greece Must Ditch False Hopes, Commit to Reform (Bloomberg)

German Finance Minister Wolfgang Schaeuble ruled out further concessions to Greece, saying it’s up to the Greek government to commit to the reforms needed to release aid rather than give false hopes to its people. Schaeuble, speaking in a Bloomberg Television interview in New York on Wednesday, said that another debt restructuring wasn’t up for discussion now, and that Greek demands for war reparations from Germany were “completely unrealistic.” “It’s entirely down to Greece,” said Schaeuble, 72. While some kind of restructuring might be on the agenda in 10 years, “today the issue for Greece is reforming its economy in such a way that it becomes competitive at some point.”

Greece’s plight is deepening with no end in sight to the standoff with creditors over releasing the final installment of bailout aid that has been stalled since the January election of Prime Minister Alexis Tsipras’s anti-austerity government. Greek 10-year bond yields surged and bank stocks plunged to their lowest level in at least 20 years on Wednesday after a report in Die Zeit newspaper the German government was working on a plan to keep Greece in the euro area if the country defaulted, triggering a halt to European Central Bank funding. “We don’t have such plans, and if we were working on them – because ministry staff are taking just about everything into consideration – then we would definitely not talk about it,” said Schaeuble. “It makes no sense to speculate about it.”

With a monthly bill of about €1.5 billion for pensions and salaries and repayments to its international creditors looming, Greece is targeting next week’s meeting of euro-area finance ministers in Riga, Latvia, as a deadline for unlocking the funds. While Schaeuble said earlier Wednesday that “no one” in the euro region expects a resolution of the standoff by the Riga meeting on April 24, he softened his tone in the interview, saying that the end of the program on June 30 was the only deadline that mattered. “If Greece wants support, we will give this support as in recent years, but of course within the framework of what we agreed,” he said. While the decisions ultimately lie with Greece, “whatever happens: we know that Greece is part of the European Union and that we also have a responsibility for Greece and we will never disregard this solidarity.”

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“..Tsipras’s government had “destroyed” progress made by previous administrations..” That’s the progress that led to hungry children?!

Schaeuble Criticizes Greece for Backsliding as Time Runs Out (Bloomberg)

German Finance Minister Wolfgang Schaeuble criticized Greece for backsliding on reforms, saying that “no one” expects a resolution next week of the standoff with Alexis Tsipras’s government over untapped bailout funds. Schaeuble, in his first comments on the matter since before the Easter holidays, said Tsipras’s government had “destroyed” progress made by previous administrations in overhauling the Greek economy. “It’s a tragedy,” he said Wednesday at the Council on Foreign Relations in New York, adding that the country needed to become competitive to stop being a “bottomless pit.” The comments by the finance chief of the region’s biggest economy underscored the rising concern in European capitals that Greece is running out of time to unfreeze the aid needed to keep the country afloat.

Standard & Poor’s cut Greece’s rating Wednesday, citing the country’s deteriorating outlook. Schaeuble is among European officials who are skeptical that there’s enough time to work out a deal ahead of a meeting of euro-area finance ministers at the end of next week in Riga, Latvia, to assess whether Greece has made enough progress to warrant a disbursement from its €240 billion bailout fund. Leaders are pressuring Greece to submit specific reforms as the country runs out of cash and faces debt payments and monthly salary obligations in the coming weeks.

Germany said Wednesday that an aid payment from the bailout fund won’t happen this month, and that Greece’s negotiations with creditors have failed to move forward. “I said last time that there has been progress, but that really there is still a considerable need for negotiations,” Friederike von Tiesenhausen, a German Finance Ministry spokeswoman, said. “Things have not really changed.” Greece’s credit rating was lowered one level to CCC+, with a negative outlook, by S&P, which estimated that the country’s economy contracted close to 1% in the past six months. The downgrade leaves the nation’s rating seven steps into junk territory.

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“..taxes might have to go up to cover a $25bn budget black hole caused by falling commodity prices..” “..BHP Billiton and Rio Tinto launched a huge expansion which saw mining investment as a percentage of the Australian economy peak at a whopping 7% in 2012. ”

Australia’s Economy: Is The Lucky Country Running Out Of Luck? (Guardian)

After 24 years of uninterrupted economic growth, Australia is entering the kind of difficult waters experienced by every other major developed country in the past decade. Even if Thursday’s unemployment figures show more jobs were added last month, the Coalition is set to go into the next election with an unusually gloomy outlook. Australians are finding it harder to get a job than at any time in more than decade and those who are in work are seeing the weakest wage growth for two decades. There are even fears that taxes might have to go up to cover a $25bn budget black hole caused by falling commodity prices. As one leading economist put it, the lucky country is running out of luck. Growth is still on target for a healthy at 2.8% for this year, according to the IMF, the kind of number that would send European leaders scrambling for the tweet button.

But the question of whether Australia loses its remarkable record of continuous growth depends, as with almost everything else in the economy, on what happens in China. “Australia has gone 24 years without a recession thanks to good management and good luck,” said Saul Eslake at BoA in Sydney. “Up to the early 2000s it was managed well and then it wasn’t. But then the luck improved because of China’s huge stimulus after the global financial crisis. Now the luck is running out.” The slowdown in the world’s second biggest economy is now well and truly underway. Demand for Australia’s iron ore and coal has plummeted from a decade ago as Beijing seeks to scale back its huge building schemes and create a more consumer-led economy. The price of the steel-making commodity, Australia’s biggest export, has fallen from $130 at the start of 2014 to around $50. Coal has halved in price in the past four years.

Buoyed by the good times, resource companies led by BHP Billiton and Rio Tinto launched a huge expansion which saw mining investment as a percentage of the Australian economy peak at a whopping 7% in 2012. The new output from their giant mines in Western Australia is now hitting the market, making export figures look healthy but adding to the pressure on prices and leaving Australia with a potentially wretched hangover.

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How does this not violate the Minsk agreement?

US Military Lands in Ukraine (Ron Paul Inst.)

Paratroopers from the US Army’s 173rd Airborne Brigade have arrived in Ukraine to begin training that country’s national guard and provide it with new military equipment. The Ukrainian government took power in a US-backed coup in early 2014 and has waged war on eastern provinces that wish to breakaway from what they see as an illegitimate government. The US military action, dubbed “Operation Fearless Guardian,” will improve the Washington-backed faction’s ability to wage war against the breakaway regions, but at least in spirit will violate the “Minsk II” ceasefire agreement which mandates a “pullout of all foreign armed formations, military equipment.”

The US military involvement on behalf of the US-backed government in Kiev comes at a key time in the shaky ceasefire. The Organization for Security and Cooperation in Europe (OSCE) has noted a serious increase in fighting in the breakaway eastern regions of Ukraine and OSCE monitors have pointed the finger at US-backed Kiev as the instigator of these new attacks. The relevant OSCE report finds:

…that the Ukrainian side (assessed to be the Right Sector volunteer battalion) earlier had made an offensive push through the line of contact towards Zhabunki (“DPR”-controlled, 14km west-north-west of Donetsk…

The US military’s “Operation Fearless Guardian” will ultimately involve some 300 US Army personnel “training three battalions of Ukrainian troops in a range of infantry tactics.” With Ukraine’s US-backed president promising to “retake” the breakaway regions in the east despite having signed the ceasefire, it is clear that US training constitutes the beginning of direct US military involvement in the Ukrainian conflict. As such it is undeniably an escalation.

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Well, they sure have no money to buy entirely new systems.

Greece In Talks With Russia To Buy Missiles For S-300 Systems (Reuters)

Greece is negotiating with Russia for the purchase of missiles for its S-300 anti-missile systems and for their maintenance, Russia’s RIA news agency quoted Greek Defense Minister Panos Kammenos as saying on Wednesday. The report followed a visit by Greek Prime Minister Alexis Tsipras last week to Moscow, where he won pledges of Russian moral support and long-term cooperation but no fresh funds to help avert bankruptcy for his heavily indebted nation. NATO member Greece has been in possession of the Russian-made S-300 air defense systems since the late 1990s.

“We are limiting ourselves to replacement of missiles (for the systems),” RIA quoted Kammenos, who is in Moscow for a security conference, as saying. “There are negotiations between Russia and Greece on the maintenance of the systems … as well as for the purchase of new missiles for the S-300 systems,” he said. The Greek defense ministry in Athens later issued a statement quoting Kammenos as saying: “The existing defense cooperation programs will continue. There will be maintenance for the existing programs.”

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Paid for years ago.

Putin to Netanyahu: Iran S-300 Air Defense System is .. Defensive (Juan Cole)

Russian President Vladimir Putin spoke by phone with Israeli Prime Minister Binyamin Netanyahu Tuesday with regard to the Russian Federation’s decision to go ahead with the sale to Iran of S-300 anti-aircraft batteries. Iran bought the batteries several years ago, but delivery was delayed by Moscow because of US and international pressure. The US has led the imposition of severe economic sanctions on Iran, perhaps the most severe ever applied to any country in modern history, including having Iran kicked off the SWIFT bank exchange. In deference to US wishes, Russia did not ship the system.

Two things have now changed. First, Russia and the US are not getting along nearly as well in the wake of the Russian annexation (or reclaiming, from Moscow’s point of view) of Crimea from Ukraine and its support for ethnically Russian fighters in Ukraine’s east. In fact, the US has begun imposing sanctions on Russia. In turn, Russia no longer has great regard for US wishes. Second, the five permanent members of the UN Security Council plus Germany have concluded a framework agreement permitting Iran’s civilian nuclear enrichment program, which is aimed at imposing inspections and equipment restrictions that would make it very difficult if not impossible for Iran to break out and create a nuclear weapon.

Russia and China have been the least supportive of severe sanctions on Iran, and Russia appears to have decided that since the negotiations have reached a serious phase, it is time to go ahead with this deal, concluded some time ago. The announcement alarmed Israeli Prime Minister Binyamin Netanyahu, whose government has often hinted around that it might bomb Iran. The Putin government issued a communique that “gave a detailed explanation of the logic behind Russia’s decision…emphasizing the fact that the tactical and technical specifications of the S-300 system make it a purely defensive weapon; therefore, it would not pose any threat to the security of Israel or other countries in the Middle East.”

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“..safeguard Creation … Because if we destroy Creation, Creation will destroy us!”

Vatican Announces Major Summit On Climate Change (ThinkProgress)

Catholic officials announced on Tuesday plans for a landmark climate change-themed conference to be hosted at Vatican later this month, the latest in Pope Francis’ faith-rooted campaign to raise awareness about global warming. The summit, which is scheduled for April 28 and entitled “Protect the Earth, Dignify Humanity. The Moral Dimensions of Climate Change and Sustainable Development,” will draw together a combination of scientists, global faith leaders, and influential conservation advocates. UN Secretary General Ban Ki-moon is slotted to offer the opening address, and organizers say the goal of the conference is to “build a consensus that the values of sustainable development cohere with values of the leading religious traditions, with a special focus on the most vulnerable.”

“[The conference hopes to] help build a global movement across all religions for sustainable development and climate change throughout 2015 and beyond,” read a statement posted on several Vatican-run websites. According to a preliminary schedule of events for the convening, attendees hope to offer a joint statement highlighting the “intrinsic connection” between caring for the earth and caring for fellow human beings, “especially the poor, the excluded, victims of human trafficking and modern slavery, children, and future generations.” The gathering will undoubtedly build momentum for the pope’s forthcoming encyclical on the environment, an influential papal document expected to be released in June or July.

The Catholic Church has a long history of championing conservation and green initiatives, but Francis has made the climate change a fixture of his papacy: he directly addressed the issue during his inaugural mass in 2013, and told a crowd in Rome last May that mistreating the environment is a sin, insisting that believers “safeguard Creation … Because if we destroy Creation, Creation will destroy us! Never forget this!” The Vatican also held a five-day summit on sustainability in 2014, calling together microbiologists, economists, legal scholars, and other experts to discuss ways to address climate change.

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Apr 142015
 
 April 14, 2015  Posted by at 7:51 pm Finance Tagged with: , , , , , , , ,  3 Responses »


NPC Walker Hill Dairy, Washington, DC 1921

The Shocker Crushing The Economy Revealed (Zero Hedge)
China’s Economy: Hard Landing Or Welcome Rebalancing? (Guardian)
The Risks Behind China’s Silk Road Growth Gamble (CNBC)
Citi Analysts Call The ‘End Of The Iron Age’ (CNBC)
Shale Oil Boom Could End in May After Price Collapse (Bloomberg)
Scrap Fossil Fuel Subsidies, Bring In Carbon Tax – World Bank Chief (Guardian)
The New Militarism: Who’s The Real Enemy? (Ron Paul)
Optimising The Eurozone (Frances Coppola)
Greece Prepares For Debt Default If Talks With Creditors Fail (FT)
Why Europe Needs to Save Greece (Anders Borg)
Greece, The Euro’s Greatest “Success” (Constantin Xekalos)
Ackman Says Student Loans Are the Biggest Risk in the Credit Market (Bloomberg)
Chavez’s Ghost Haunts Spanish Budget Rebels Podemos in Polls (Bloomberg)
Anti-Euro Finnish Party Gets Ready to Rule as Discontent Brews (Bloomberg)
The Power of Lies (Paul Craig Roberts)
She’s Back! (Jim Kunstler)
Greenpeace’s Midlife Crisis (Bloomberg)
The Real Reason Californians Can’t Water Their Lawns (Bloomberg)
Italy Rescues Nearly 6,000 Migrants In A Single Weekend (Guardian)

“..why the consumer has literally gone into hibernation..”

The Shocker Crushing The Economy Revealed (Zero Hedge)

We are grateful to Alexander Giryavets at Dynamika Capital for pointing us to something which is far more troubling than even the Atlanta Fed’s collapse in Q1 GDP tracking: namely the latest Credit Managers Index for the month of March which “deteriorated significantly over the last two months and current readings stand at the recessionary levels not seen since 2008.” To be sure, we have previously shown the collapse in consumer debt as reported by the Fed, which as we noted, just suffered its worst month for revolving credit since December 2010 and explains “why the consumer has literally gone into hibernation – it has nothing to do with the weather, and everything to do with the unwillingness to “charge” purchases, which in turn is a clear glimpse into how the US consumer sees their financial and economic future.”

It turns out it may not have been just a matter of demand: apparently something very dramatic has been happening in February and especially in March. Instead of spoiling the punchline, we will leave it to the National Association of Credit Managers to explain what happened: From the latest NACM Credit Managers Index: We now know that the readings of last month were not a fluke or some temporary aberration that could be marked off as something related to the weather. There is quite obviously some serious financial stress manifesting in the data and this does not bode well for the growth of the economy going forward. These readings are as low as they have been since the recession started and to see everything start to get back on track would take a substantial reversal at this stage. The data from the CMI is not the only place where this distress is showing up, but thus far, it may be the most profound.

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“..house prices are declining at 6% a year, compared with double digit growth a year ago..”

China’s Economy: Hard Landing Or Welcome Rebalancing? (Guardian)

The worse-than-expected trade data from China on Monday was the latest evidence of the struggleBeijing faces in achieving a soft landing for the world’s second-largest economy. Before the Great Crash of 2008, China’s role as the world’s manufacturing powerhouse, shipping cut-price goods from shoes to smartphones out across the world, seemed like the economic equivalent of alchemy: turning the sweat and toil of hundreds of millions of workers into gold. But seven years later, with eurozone policymakers resorting to quantitative easing to kickstart demand, and US interest rates still at zero, being saddled with a growth model that relies on selling cheap products to the west no longer looks like such a winning strategy.

Global trade growth remains well below the levels that pre-crisis trends would have predicted. Beijing has made clear that after initially cushioning the slowdown with a massive fiscal stimulus, it is now aiming to engineer a shift to a more sustainable growth model, from a dependence on investment and exports towards consumption. On that basis, the sharp decline in exports is to be welcomed as a sign that the rebalancing is working. But some analysts believe it is the latest sign that something is badly amiss. Erik Britton, of City consultancy Fathom, says its analysis, based on rail freight, electricity production and bank lending, suggests growth is running at closer to 3% than the 7% or so suggested by official GDP data.

“China is in a hard landing now,” he says. “They have faced a situation where their previous growth model is not working.” He points out that house prices are declining at 6% a year, compared with double digit growth a year ago — similar to the kind of reversal that plunged the US into the sub-prime mortgage crisis. Furthermore, banks are saddled with non-performing loans and industries are struggling to tackle overcapacity. He believes China will eventually have to accept a drastic depreciation in the renminbi, of perhaps 25%, in order to regain competitiveness and prevent a crash.

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“.. the proposed projects could end up “little more than a series of expensive boondoggles..”

The Risks Behind China’s Silk Road Growth Gamble (CNBC)

China is betting on a massive infrastructure and cross-border trade initiative to cushion the economy as it transitions to a period of slower, more sustainable growth, but experts warn the program could do more harm than good. Years in the making, the ‘One Belt, One Road’ (OBOR) initiative is composed of two primary projects: the “Silk Road Economic Belt” and “21st Century Maritime Silk Road,” a network of road, rail and port routes that will connect China to Central Asia, South Asia, the Middle East, and Europe. President Xi Jinping hopes the plan will spur more regionally balanced growth as annual GDP hovers at a 24-year low. However, OBOR is unlikely to resolve Beijing’s long-term growth problem as it doesn’t address domestic consumption, noted Bank of America in a recent report.

“OBOR tries to export China’s savings and import foreign demand, so it represents a continuation of China’s old growth model (which had brought China to its current predicament in the first place),” it said. “We suspect that many local governments may leverage off OBOR for a new round of infrastructure spending…This, while helpful in holding up short-term investment, will delay the long overdue rebalancing toward consumption in China,” it added. Some of the countries participating in the OBOR scheme have large current account deficits and unfavorable economic fundamentals, making them high-risk borrowers, BoFAML pointed out. This means Beijing is taking on greater default risk by providing them with capital and financing projects in those nations.

“For example, China swaps renminbi for country Z’s currency at the current exchange rate. If country Z uses the funds to buy Chinese rail equipment and China doesn’t immediately spend currency Z to purchase goods from country Z, China would be exposed to the risk of partial default if currency Z depreciates,” the bank said. The Center for Strategic and International Studies (CSIS) agrees. In a note this week, it stated that borrowers’ failure to pay back loans, or businesses’ inability to recoup their investments could place additional stress on the Chinese economy. Beijing’s past difficulties investing in infrastructure abroad, especially through bilateral arrangements, suggest that the proposed projects could end up “little more than a series of expensive boondoggles,” CSIS remarked.

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“The real challenge for this market is that it still has lots of supply coming..”

Citi Analysts Call The ‘End Of The Iron Age’ (CNBC)

Oversupply and a lack of demand growth has led some market analysts to speculate that iron ore prices will never recover to former levels, and warn of a divergence in different base metals going forward. The price of iron ore is now just over $47 a ton, according to The Steel Index (TSI), which measures a benchmark of 62-percent ore. This is its lowest level since the TSI started compiling spot market prices in 2008, according to Reuters. On Monday, analysts at Citi slashed their forecasts for the price of the metal and now expect iron ore to average $45 a ton in 2015 and $40 a ton in 2016. These are downgrades of 23% and 36.6%, respectively. “We believe the upside in the sector is now capped, however the downside is being protected by dividend yield. We think it is going to be a tough 1-2 years for the mining sector until we clear surplus capacity in the bulk commodity prices,” Heath Jansen, metals and mining analyst at Citi, said in a note Monday morning.

Another analyst, Colin Hamilton, head of global commodities research at Macquarie, explained that iron prices needed to fall in lower in the short term to clear an oversupply that isn’t prevalent in other commodity markets. “The real challenge for this market is that it still has lots of supply coming,” Hamilton, who has also downgraded is forecasts for iron ore prices, told CNBC. Caroline Bain, senior commodities economist at Capital Economics, highlighted in a note last week that iron ore output grew by 9% in 2014, while copper mine supply grew by just over 1%. She added that low-cost iron ore producers in Australia and Brazil were continuing to ramp up output despite the fall in prices, and said she believed this would boost iron ore supply again this year.

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“..If it’s fast, if it’s steep, there could be a big jump in the market.”

Shale Oil Boom Could End in May After Price Collapse (Bloomberg)

The shale oil boom that pushed U.S. crude production to the highest level in four decades is grinding to a halt. Output from the prolific tight-rock formations such as North Dakota’s Bakken shale will decline 57,000 barrels a day in May, the Energy Information Administration said Monday. It’s the first time the agency has forecast a drop in output since it began issuing a monthly drilling productivity report in 2013. Deutsche Bank, Goldman Sachs and IHS have projected that U.S. oil production growth will end, at least temporarily, with futures near a six-year low. The plunge in prices has already forced half the country’s drilling rigs offline and wiped out thousands of jobs. The retreat in America’s oil boom is necessary to correct a supply glut and rebalance global oil markets, according to Goldman.

“We’re going off an inevitable cliff” because of the shrinking rig counts, Carl Larry, head of oil and gas for Frost & Sullivan LP, said by phone from Houston on Monday. “The question is how fast is the decline going to go. If it’s fast, if it’s steep, there could be a big jump in the market.” West Texas Intermediate crude for May delivery climbed 27 cents Monday to settle at $51.91 a barrel on the New York Mercantile Exchange. Prices are down 50% from a year ago. The decline in domestic production will come just as U.S. refineries start processing more oil following seasonal maintenance, easing the biggest glut since 1930. The withdrawal from U.S. oil stockpiles is expected to bring relief to a market that’s seen prices drop by more than $50 a barrel since June.

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But the industry is going to say they already have it so hard..

Scrap Fossil Fuel Subsidies, Bring In Carbon Tax – World Bank Chief (Guardian)

Poor countries are feeling “the boot of climate change on their neck”, the president of the World Bank has said, as he called for a carbon tax and the immediate scrapping of subsidies for fossil fuels to hold back global warming. Jim Yong Kim said awareness of the impact of extreme weather events that have been linked to rising temperatures was more marked in developing nations than in rich western countries, and backed for the adoption of a five-point plan to deliver low-carbon growth. Speaking to the Guardian ahead of this week’s half-yearly meeting of the World Bank in Washington DC, Kim said he had been impressed by the energy of the divestment campaigns on university campuses in the US, aimed at persuading investors to remove their funds from fossil fuel companies.

“We have a whole new generation that is interested in climate change”, he said as he predicted that putting taxes on the use of carbon would trigger a wave of clean technology which would lift people out of poverty in the developing world while preventing the global temperature from rising by more than 2C above pre-industrial levels. Kim said it was crazy that governments increased the use of coal, oil and gas by providing subsidies for consumers. He said that in low and middle-income countries, the richest 20% received six times as much from fossil fuel subsidies as the poorest 20%. He added: “We need to get rid of fossil fuel subsidies now.”

Kim insisted that the recent fall in energy prices meant there had never been a better time to reduce the payments made by governments to help people with their fuel bills. Politicians around the globe currently spend around $1tn (£680bn) a year subsidising fossil fuels, but Kim said: “Fossil fuel subsidies send out a terrible signal: burn more carbon.”

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“.. the real enemy is the taxpayer..”

The New Militarism: Who’s The Real Enemy? (Ron Paul)

Militarism and military spending are on the rise everywhere as the new Cold War propaganda seems to be paying off. The new “threats” that are being hyped bring big profits to military contractors and the network of think tanks they pay to produce pro-war propaganda. Here are just a few examples: The German government announced last week that it would purchase 100 more “Leopard” tanks — a 45-percent increase in the country’s inventory. Germany had greatly reduced its inventory of tanks as the end of the Cold War meant the end of any threat of a Soviet ground invasion of Europe. The German government now claims these 100 new tanks, which may cost nearly half a billion dollars, are necessary to respond to the new Russian assertiveness in the region. Never mind that Russia has neither invaded nor threatened any country in the region, much less a NATO member country.

The US Cold War-era nuclear bunker under Cheyenne Mountain, Colorado, which was all but shut down in the 25 years since the fall of the Berlin Wall, is being brought back to life. The Pentagon has committed nearly a billion dollars to upgrading the facility to its previous Cold War-level of operations. U.S. defense contractor Raytheon will be the prime beneficiary of this contract. Raytheon is a major financial sponsor of think tanks like the Institute for the Study of War, which continuously churn out pro-war propaganda. I am sure these big contracts are a good return on that investment.

NATO, which I believe should have been shut down after the Cold War ended, is also getting its own massively expensive upgrade. The Alliance commissioned a new headquarters building in Brussels, Belgium, in 2010, which is supposed to be completed in 2016. The building looks like a hideous claw, and the final cost — if it is ever finished — will be well over one billion dollars. That is more than twice what was originally budgeted. What a boondoggle! Is it any surprise that NATO bureaucrats and generals continuously try to terrify us with tales of the new Russian threat? They need to justify their expansion plans!

So who is the real enemy? The Russians? No, the real enemy is the taxpayer. The real enemy is the middle class and the productive sectors of the economy. We are the victims of this new runaway military spending. Every dollar or euro spent on a contrived threat is a dollar or euro taken out of the real economy and wasted on military Keynesianism. It is a dollar stolen from a small business owner that will not be invested in innovation, spent on research to combat disease, or even donated to charities that help the needy.

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Europe will never be like the US.

Optimising The Eurozone (Frances Coppola)

[..] there is evidently far greater convergence of unemployment rates in the USA than there is in the Eurozone. So if neither is an OCA, why would this be? There are a number of reasons.

Firstly, the USA is a federation. Each state has its own government, but there is also a fully functional fiscal authority at federal level with tax and spending powers. Automatic fiscal stabilisers – unemployment benefit and income taxes – are harmonised across the federation (states have their own unemployment insurance programmes, but these must comply with federal guidelines). There are also federal-level programmes for other major government expenditures such as pensions, education, healthcare and defence. In contrast, the Eurozone has no federal fiscal authority with tax and spending powers. Automatic stabilisers operate at state, not federal, level and there is little attempt to harmonise them – indeed attempts to harmonise tax rates are met with fierce resistance from member states. Similarly, budgets for pensions, education, healthcare and defence are set by the individual states without reference to each other, although Brussels now supervises member state budgets to ensure compliance with fiscal rules.

Secondly, the USA is a transfer union. Richer states support poorer ones by means of federal fiscal transfers. States can borrow on their own account, and they can – and do – go bankrupt. But because of federal programmes and fiscal transfers, living standards tend to be maintained even in states that completely foul up their budgets. In contrast, the Eurozone has little in the way of fiscal transfers: there is development aid to poorer regions, and systematic help for farmers in the Common Agricultural policy, but that’s about all. The lack of federal programmes and fiscal transfers means that living standards can fall catastrophically when states make a mess of their finances (see Greece) or suffer local economic shocks (see Cyprus), while lack of fiscal harmonisation coupled with free movement of capital means that states are vulnerable to “sudden stops” even if they are fiscally responsible (see Spain).

Thirdly, the USA has a monetary authority with a dual mandate. The Fed is responsible for maintaining both price stability and full employment. Consequently, high unemployment can be fought with monetary stimulus as well as fiscal measures. In contrast, the ECB is only responsible for price stability. Provided that inflation is under control, the ECB has no reason to do anything at all about high unemployment. Consequently, the ECB has maintained far tighter monetary conditions than the USA over the last few years despite considerably higher unemployment. This has seriously hampered the efforts of member states, particularly in the distressed periphery, to reduce unemployment.

Finally, the USA – although not an OCA – has a common language and free movement of people both in theory and practice (though parts of the USA can be unfriendly to migrants, as anyone who has read Steinbeck will know). The ease with which people can migrate within the US to find work is a primary cause of the convergent unemployment rates.

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This was presented like some big news thing; it’s not.

Greece Prepares For Debt Default If Talks With Creditors Fail (FT)

Greece is preparing to take the dramatic step of declaring a debt default unless it can reach a deal with its international creditors by the end of April, according to people briefed on the radical leftist government’s thinking. The government, which is rapidly running out of funds to pay public sector salaries and state pensions, has decided to withhold €2.5 billion of payments due to the IMF in May and June if no agreement is struck, they said. A Greek default would represent an unprecedented shock to Europe’s 16-year-old monetary union only five years after Greece received the first of two EU-IMF bailouts that amounted to a combined €245 billion. The warning of an imminent default could be a negotiating tactic, reflecting the government’s aim of extracting the easiest possible conditions from Greece’s creditors, but it nevertheless underlined the reality of fast-emptying state coffers.

Default is a prospect for which other European governments, irritated at what they see as the unprofessional negotiating tactics and confrontational rhetoric of the Greek government, have also begun to make contingency plans. In the short term, a default would almost certainly lead to the suspension of emergency European Central Bank liquidity assistance for the Greek financial sector, the closure of Greek banks, capital controls and wider economic instability. Although it would not automatically force Greece to drop out of the eurozone, a default would make it much harder for Alexis Tsipras, prime minister, to keep his country in the 19-nation area, a goal that was part of the platform on which he and his leftist Syriza party won election in January.

Germany and Greece’s other eurozone partners say they are confident that the currency area is strong enough to ride out the consequences of a Greek default, but some officials acknowledge it would be a plunge into the unknown. Greece’s finance ministry on Monday reaffirmed the government’s commitment to striking a deal with its creditors, saying: “We are continuing uninterruptedly the search for a mutually beneficial solution, in accordance with our electoral mandate.” In this spirit, Greece resumed technical negotiations with its creditors in Athens and Brussels on Monday on the fiscal measures, budget targets and privatisations without which the lenders say they will not release funds needed to pay imminent debt instalments.

The government is trying to find cash to pay €2.4 billion in pensions and civil service salaries this month. It is due to repay €203m to the IMF on May 1 and €770 million on May 12. Another €1.6 billion is due in June. The funding crisis has arisen partly because €7.2 billion in bailout money due to have been disbursed to Greece last year has been held back, amid disagreements between Athens and its European and IMF creditors over politically sensitive structural economic reforms.

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“Whether or not the Greeks are deserving of assistance, it is in Europe’s interest to help them..”

Why Europe Needs to Save Greece (Anders Borg)

The fundamental problem underlying Greece’s economic crisis is a Greek problem: the country’s deep-rooted unwillingness to modernize. Greece was subject to a long period of domination by the Ottoman Empire. Its entrenched political and economic networks are deeply corrupt. A meritocratic bureaucracy has not emerged. Even as trust in government institutions has eroded, a culture of dependency has taken hold. The Greeks, it can be argued, have not earned the right to be saved. And yet a Greek exit from the euro is not the best option for either Greece or for the European Union. Whether or not the Greeks are deserving of assistance, it is in Europe’s interest to help them. The OECD, the EC, the IMF, and the World Bank have emphasized, in report after report, the fundamental inability of Greece’s economy to produce long-term sustainable growth.

The country’s education system is sub-par and underfunded. Its investments in research and development are inadequate. Its export sector is small. Productivity growth has been slow. Greece’s heavy regulatory burden, well described by the World Bank’s indicators on the ease of doing business, represents a significant entry barrier in many sectors, effectively closing off entire industries and occupations to competition. As a result, Greece’s economy struggles to reallocate resources, including workers, given the rigidity of the labor market. After Greece was allowed to enter the eurozone, interest-rate convergence, combined with inflated property prices, fueled an increase in household debt and caused the construction sector to overheat, placing the economy on an unsustainable path.

In the years before the beginning of the financial crisis, current-account deficits and bubbly asset prices pushed annual GDP growth up to 4.3%. Meanwhile, public spending rose to Swedish levels, while tax revenues remained Mediterranean. In the eight years that I served on the EU’s Economic and Financial Affairs Council, I worked alongside seven Greek ministers, every one of whom at some point admitted that the country’s deficit numbers had to be revised upward. Each time, the minister insisted that it would never happen again. But it did. Indeed, the pre-crisis deficit for 2008 was eventually revised to 9.9% of GDP – more than 5% higher than the figure originally presented to the Council. And yet, as bad as Greece’s economy and political culture may be, the consequences of the country’s exit from the euro are simply too dire to consider. In the end, such an outcome would be the result of a political decision, and the European values at stake in that decision trump any economic considerations.

(Anders Borg, a former Swedish finance minister, is Chair of the World Economic Forum’s Global Financial System Initiative.)

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“..when the Germans were there during the occupation in the Second World War, the people lived exactly like they are living now.”

Greece, The Euro’s Greatest “Success” (Constantin Xekalos)

Greece is a social disaster zone. 3 million people are without guaranteed healthcare, 600,000 children are living under the breadline and more than half of them are unable to meet their daily nutritional needs. 90% of families living in the poorer areas rely on food banks and feeding schemes for survival, and unemployment is approaching 30%, with youth unemployment approaching 60%. These are not just numbers, they are real people. In order to show their faces and tell their stories, writer and documentary film maker from Crete and now living in Florence, Constantin Xekalos, decided to make a documentary film entitled: “Greece, the Euro’s greatest success “. In today’s Passaparola he talks about this documentary film and about the suffering of the Greek people that he has encountered in his personal experience. Today it is all happening, but is Italy next?

“Good day to everyone, my name is Constantin Xekalos. I was born in Crete many years ago. I now live in Florence and I will explain why I created this documentary that is doing the rounds on the Web, namely “ Greece, the Euro’s greatest success ” taken from Monti’s statements while he was Prime Minister. My decision was sparked by an Albanian family that was in serious difficulty and was going to Crete in November to pick olives with two tiny children in tow and facing serious financial difficulties. When I saw that the official media was never saying what they should be saying, I said to myself: “do something with your friends in order to report the reality of what Europe is doing”. I shared this idea of mine with a number of friends and bit by bit we formed a group of 5 people, then a sixth person joined us and we got going.

The healthcare tragedy in Greece When we made this documentary it was said that 1/3 of the Greek population, (more than 3 million people,) were without any guaranteed healthcare. In the interim that number has grown. They have been abandoned. If you go to a hospital, obviously a public one, they will treat you and they will accept you if it is an emergency, but if you are admitted, you then have to pay. If you are unable to pay, they send the bill to the Receiver of Revenue’s office and they take it from there. If you have no money, they start with foreclosure, even your home , even if it is your only home!

This is crime against society that is totally unacceptable. In an advanced and so-called democratic Country that is part of the western world, things like this are totally inconceivable, absurd and unacceptable. I repeat, this is crime against society that we absolutely cannot accept! If you are ill, democracy guarantees the treatment you need, otherwise it should be called by some other name. When a child is not guaranteed the nutrition he/she needs, a mere helpless child, or elderly people that are no longer able to look after themselves, then that is no longer democracy. Some of the older Greeks were telling me that when the Germans were there during the occupation in the Second World War, the people lived exactly like they are living now.

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“..there’s no way students are going to pay it back..”

Ackman Says Student Loans Are the Biggest Risk in the Credit Market (Bloomberg)

Bill Ackman says the biggest risk in the credit market is student loans. “If you think about the trillion dollars of student loans we have outstanding, there’s no way students are going to pay it back,” Ackman, who runs $20 billion Pershing Square Capital Management, said today at 13D Monitor’s Active-Passive Investor Summit in New York. The balance of student loans outstanding in the U.S. – also including private loans without government guarantees – swelled to $1.3 trillion as of the second quarter 2014, based on data released by the Federal Reserve in October. The rising level has prompted investors and government officials to draw parallels to the subprime mortgage market before housing collapsed starting in 2006.

About $100 billion of federal student loans are in default, 9% of outstanding balances, according to a Treasury Borrowing Advisory Committee update on student lending trends released in November. Ackman, 48, said “young people are the kind of people that protest” and predicted that one administration or another will forgive student debt. The investor, who last year trounced other money managers with a 40% gain in his public fund, said at the conference he doesn’t like fixed income markets generally because of very low U.S. interest rates and that investors should be wary of aggressive lending terms.

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Not a main issue.

Chavez’s Ghost Haunts Spanish Budget Rebels Podemos in Polls (Bloomberg)

After a meteoric rise before this year’s Spanish election, anti-austerity party Podemos is finding the past might now be catching up with the future. Leader Pablo Iglesias and senior party officials have been embroiled in allegations for the past three months over their ties to the former Venezuelan government of Hugo Chavez. Podemos’s support slipped for a third month to 22% in a Metroscopia poll published on Sunday from a peak of 28% in January. The controversy is forcing Iglesias, who says he worked as an adviser to the Venezuelan government before entering Spanish politics, to decide where he takes the party now.

Embracing the radical label, like his ally in Greece, Prime Minister Alexis Tsipras, may limit Podemos’s broader appeal, while reshaping the policy program toward the mainstream risks alienating some of the activists who’ve powered the party’s rise. “If you want to support Venezuela, it’s very difficult to reach the center of the political spectrum,” said Jose Ignacio Torreblanca, head of the Madrid office of the European Council on Foreign Relations. “The bigger issue is how this will affect Podemos’s grassroots support and its political affinities on its journey toward the center.” Opponents of Podemos including former Prime Minister Jose Maria Aznar said the links with the socialist Chavez undermine Spanish democracy.

YouTube videos of Podemos leaders extolling the virtues of Chavismo have spread across Spain, just as the economy in Venezuela gets hit by falling oil prices and the inflation rate edges toward 70%. Iglesias, his deputy, Inigo Errejon, and Juan Carlos Monedero, the party’s head of policy, studied revolutionary movements in Latin America as part of their academic work and went on to advise governments there, in particular Venezuela. Between 2006 and 2007, Iglesias worked for Chavez’s office in Caracas and led classes on “ideology and constitutional law,” according to his resume. Monedero also worked with Chavez, who died in 2013. Podemos denied reports that the party had received financing from Venezuela in a March 2 statement.

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Europe’s going to wish Syriza were their biggest problem.

Anti-Euro Finnish Party Gets Ready to Rule as Discontent Brews (Bloomberg)

The anti-euro The Finns party, which eight years ago got just 4% of the vote, is now dressing itself up for Cabinet seats as Finnish voters are set to oust the government after four years of economic failure. The Finns, whose support is based on equal parts of anti-euro, anti-immigrant and anti-establishment sentiment, have captured voters on the back of the euro-area’s economic crisis and a home-grown collapse of key industries. In the 2011 election, during the height of the euro crisis, it shocked the traditional parties by winning 19% of the vote. “We can’t be ignored, because a strong majority government won’t be possible without us,” Timo Soini, the party leader, said in a phone interview April 9.

Europeans are seeing their political landscape shifting with the emergence of non-establishment parties from Greece in the south to Finland in the north. In the Hellenic nation, anti-austerity Syriza grabbed power in January elections and in Spain, where an election is due this year, its ally Podemos has topped polls. Almost a third of voters expect The Finns party to be part of government, according to a March 13 survey by the Foundation for Municipal Development.

The country is struggling to emerge from a three-year recession after key industries such as its papermakers have buckled amid slumping demand and Nokia Oyj lost in the smartphone war, cutting thousands of jobs. The government has raised taxes and lowered spending, adding to unpopularity, and on top of that have been bailout costs for Greece and Portugal, among others, which have eroded finances for Finland, still top-rated at Fitch Ratings and Moody’s Investors Service. “Our stance will be very tight, no matter what,” Soini said. “Nothing is forcing Finland to participate in these bailout policies. If we don’t want to take part, we can refuse.”

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Nice history lesson.

The Power of Lies (Paul Craig Roberts)

It is one of history’s ironies that the Lincoln Memorial is a sacred space for the Civil Rights Movement and the site of Martin Luther King’s “I Have a Dream” speech. Lincoln did not think blacks were the equals of whites. Lincoln’s plan was to send the blacks in America back to Africa, and if he had not been assassinated, returning blacks to Africa would likely have been his post-war policy. As Thomas DiLorenzo and a number of non-court historians have conclusively established, Lincoln did not invade the Confederacy in order to free the slaves. The Emancipation Proclamation did not occur until 1863 when opposition in the North to the war was rising despite Lincoln’s police state measures to silence opponents and newspapers. The Emancipation Proclamation was a war measure issued under Lincoln’s war powers. The proclamation provided for the emancipated slaves to be enrolled in the Union army replenishing its losses.

It was also hoped that the proclamation would spread slave revolts in the South while southern white men were away at war and draw soldiers away from the fronts in order to protect their women and children. The intent was to hasten the defeat of the South before political opposition to Lincoln in the North grew stronger. The Lincoln Memorial was built not because Lincoln “freed the slaves,” but because Lincoln saved the empire. As the Savior of the Empire, had Lincoln not been assassinated, he could have become emperor for life.cAs Professor Thomas DiLorenzo writes: “Lincoln spent his entire political career attempting to use the powers of the state for the benefit of the moneyed corporate elite (the ‘one-percenters’ of his day), first in Illinois, and then in the North in general, through protectionist tariffs, corporate welfare for road, canal, and railroad corporations, and a national bank controlled by politicians like himself to fund it all.”

Lincoln was a man of empire. As soon as the South was conquered, ravaged, and looted, his collection of war criminal generals, such as Sherman and Sheridan, set about exterminating the Plains Indians in one of the worst acts of genocide in human history. Even today Israeli Zionists point to Washington’s extermination of the Plains Indians as the model for Israel’s theft of Palestine. The War of Northern Aggression was about tariffs and northern economic imperialism. The North was protectionist. The South was free trade. The North wanted to finance its economic development by forcing the South to pay higher prices for manufactured goods. The North passed the Morrill Tariff which more than doubled the tariff rate to 32.6% and provided for a further hike to 47%. The tariff diverted the South’s profits on its agricultural exports to the coffers of Northern industrialists and manufacturers. The tariff was designed to redirect the South’s expenditures on manufactured goods from England to the higher cost goods produced in the North.

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Hillary and the Three Stooges.

She’s Back! (Jim Kunstler)

[..] what does the flight of Hillary say about party politics in this land? That a more corrupt and sclerotic dominion has hardly been glimpsed since the last Bourbons cavorted in the halls of Versailles? Hence, my view that America will witness a very peculiar spectacle leading up to and perhaps beyond the 2016 election: the disintegration of seeming normality against a background of mounting disorder and insurrection. Hillary will go on caw-cawing platitudes about togetherness, diversity, and recovery while the economy sinks to new extremes of unravelment, and the anger of a swindled people finally boils over.

Neither party shows even minimal competence for understanding the actual crises facing this land, and indeed the project of techno-industrial civilization itself. If the people don’t overthrow them, and grind their pretenses underfoot, then events surely will. In the trying months leading up to the presidential election of 2016, Americans will witness the death of their “energy independence” fantasy — actually a meme concocted by professional propagandists. The shale oil “miracle” will go up in a vapor of defaulting junk bonds. Violence will escalate through North Africa and the Middle East, threatening the world oil supply more generally. I would give a low-percentage chance of survival to King Salman of Saudi Arabia, and to the Saud part of Arabia more particularly as civil war among the rival clans breaks out there, with an overlay of Islamic State mischief seeding even greater chaos, and the very likely prospect of sabotage to the gigantic oil terminal at Ras Tanura on the Persian Gulf.

In comparison, the fiasco of Benghazi will look like a mere Three Stooges episode. If a third party were to arise in all this turmoil, it might not be savior brigade, either. In 1856 the Republicans welled up as the Whigs expired in sheer purposelessness and the Democrats romanced slavery. The nation had to endure the greatest convulsion in its lifetime to get to the other side of that. This time, I’m not at all sure we’ll get to the other side in one piece.

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Greenpeace’s crisis is its corporate culture.

Greenpeace’s Midlife Crisis (Bloomberg)

Greenpeace’s account of its mission to board and occupy an enormous oil-drilling rig in the middle of the Pacific evoked a familiar image of daring environmental activists confronting determined opposition from a corporate titan. The six people who used ropes and harnesses last week to scale the Royal Dutch Shell rig from inflatable rafts dodged “jets of water from high-powered hoses aimed at them by the rig’s crew.” There was only one problem: The encounter involved no hoses. In fact, as a later clarification from Greenpeace made clear, the activists met no resistance at all. It was a small but telling slip-up for Greenpeace, which has been mired in an internal debate over how far to go to capture the public’s attention at a time when its traditional stunts often seem familiar.

Many corporate targets are now savvy enough to avoid the confrontations that hand Greenpeace camera-ready scenes to generate publicity and support. “It’s no longer maybe the mind-blowing tactics that it was in the ’70s or ’80s to go out and take some pictures,” says Laura Kenyon, a Greenpeace campaigner who participated in the latest effort to shadow the Artic-bound Shell rig across the Pacific. “People now expect things from Greenpeace.” It seems scaling a moving oil rig in the middle of an ocean isn’t enough to guarantee attention. The activists managed to spend almost a week aboard Shell’s Polar Pioneer before departing over the weekend. In that time Kenyon’s colleagues set up camp, unfurled a “Save the Arctic” banner, and shot videos of themselves. Shell made no physical attempt to dislodge the Greenpeace team—some crew members could be seen waving to them.

Shell sought a restraining order to keep the activists away, and a federal judge in Alaska granted the measure on April 11. Procter & Gamble was similarly unruffled last year when a Greenpeace team, including one in a tiger suit, used zip lines to hang a banner between two of the company’s Cincinnati office towers in a bid to draw attention to the use of palm oil from rain forests in shampoos. A local police officer rapped on a window and calmly asked the activists when they would be done. Later, in a sign of just how far corporate targets can take nonconfrontational tactics, P&G even persuaded prosecutors to reduce the charges against the activists from felony vandalism and burglary to misdemeanor trespassing.

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Highly debatable. Why should they water lawns in the first place? Why have lawns? It’s not as if they’re living in (New) England.

The Real Reason Californians Can’t Water Their Lawns (Bloomberg)

In response to the ongoing drought, California Governor Jerry Brown has set limits on urban water use—ordering cuts of as much as 25%. Cities across the state will stop watering highway median strips and rip up grass in public places. Golf courses and cemeteries will turn on the sprinklers less frequently, and water rates might rise. In many ways, this is an odd response to a water problem that’s largely about agriculture. But in that, California is a microcosm of an increasing proportion of the world: underpriced water used mainly for agriculture driving shortages that have nasty side effects on urban areas. The difference between California and the world’s poorest regions is that the side effects aren’t browning fairways but diarrhea, dehydration, and tens of thousands of deaths. California has plenty of water for the people who live there—it’s the crops and gardens that are the problem.

Agriculture accounts for about 80% of the state’s water use. The state’s urban residents consume an average of 178 gallons of water per day, compared with 78 gallons in New York City, in large part because of how much they spray on the ground: Half of California’s urban consumption is for landscaping. The big problem with the 90% of California’s water used on soil is that it’s frequently provided below cost and according to an arcane distribution formula. Angelenos do pay more for their water than New Yorkers—at 150 gallons per person per day, a recent water pricing survey suggests they would pay $99 a month for a family of four, compared with $63 in New York. But they’d use less on the garden if water were priced to reflect long-term cost.

And thanks to a skewed system of water rights and underpricing, many of California’s farms are idling land while others are devoted to water-hungry crops like almonds, using wasteful systems. A little under one-half of California farms still use inefficient forms of flood irrigation. The struggle California faces is increasingly common around the world. By 2030, without greater water efficiency, as much as a third of the world’s population will live in areas where water needs will be as much as 50% above accessible, reliable supply. Fixing the problem isn’t that complex: A McKinsey study of water use in India, for example, suggests that about a third of the gap between 2030 water demand and current supply in that country could be met by measures that actually save money—steps like avoiding over-irrigation and introducing no-till farming. The most expensive of measures required would involve costs below one cent per hundred gallons of water. The impact on food costs would be marginal.

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And 1,300 more just yesterday.

Italy Rescues Nearly 6,000 Migrants In A Single Weekend (Guardian)

Italy’s coastguard and navy have rescued nearly 6,000 migrants since Friday, as warm weather and improving sea conditions prompted an even higher number of boats than usual to set off from north Africa. Rescue operations are still under way and at least nine migrants have died after their boat capsized about 80 miles off the coast of Libya, according to reports on Monday morning. About 144 people were saved in that operation. Concerns have already been raised about the logic and morality of Europe’s decision to cut back maritime rescue operations in the Mediterranean last autumn. The EU is expected to announce a review of its policies in early May. The new arrivals bring the total number of migrants who have entered Italy to more than 15,000 since the start of the year, according to the International Organisation for Migration (IOM), which tracks the figures closely.

It was the second weekend in a row in which huge numbers of migrants were rescued crossing the Sicilian channel. The majority of the operations this month have been performed by the Italian coastguard and navy and some commercial ships in international waters, rather than the European-backed Triton mission that patrols waters within 30 miles of the Italian coast. Triton replaced a far more ambitious programme conducted by Italy, the Mare Nostrum mission, at the end of last year. Mare Nostrum was a one-year programme that cost Italy about €9m a month, compared with Triton’s budget of €2.9m, and carried out search and rescue missions over a 27,000 square-mile area. Refugee advocate groups have pointed to this year’s migrant death toll of about 480, compared with 50 at the same time last year, as a sign of Triton’s inability to cope with the scale of the migration crisis.

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Feb 282015
 
 February 28, 2015  Posted by at 11:38 am Finance Tagged with: , , , , , , ,  4 Responses »


DPC Yard of tenement, Manhattan, New York City 1900

Greece Seeks Negotiations On ECB Bond Repayment (Reuters)
Fed Won’t Be Predictable After Lifting Rates, Fischer Says (MarketWatch)
“Monetary Policy Is Bankrupt” Dr. Lacy Hunt Warns (Tavares via Zero Hedge)
Greek PM Alexis Tsipras Rules Out Third Bailout (BBC)
A Fierce Battle Looms (Alexis Papachelas via Kathimerini)
The Tortured Relationship between Schäuble and Varoufakis (Spiegel)
Homeland Security Shutdown Looms After House Fails To Approve Funding (Guardian)
Congress Avoids Homeland Security Shutdown With Stopgap Measure
Q4 Obliterates The Case For QE And ZIRP (David Stockman)
Should the US Make Billions From Student Loans? (Bloomberg)
China Tells West To Consider Russia’s Security Concerns Over Ukraine (Reuters)
UAE Denies Deal To Sell Military Equipment To Ukraine (RT)
Spain Arrests Eight Nationals For Fighting With Rebels In Ukraine (Guardian)
Nemtsov Was No Threat To Russian Government – Kremlin (RT)

Yanis gets creative. 2 days ago it was a payment to the IMF, which he said the ECB could make with money they themselves say belongs to Athens anyway. This one is even smarter: “I see it as a mistake – but the ECB did this with the aim of keeping us in the markets in 2010. They failed.”

Greece Seeks Negotiations On ECB Bond Repayment (Reuters)

Greece called into question on Saturday a major debt repayment it must make to the European Central Bank this summer, after acknowledging it faces problems in meeting its obligations to international creditors. Finance Minister Yanis Varoufakis said Athens should negotiate with the ECB on €6.7 billion in Greek government bonds held by the Frankfurt-based bank that mature in July and August. Varoufakis did not say what he hoped to achieve in any talks, but he accused the ECB of making a mistake in buying the bonds around the time Greece had to take an EU/IMF bailout in 2010. “Shouldn’t we negotiate this? We will fight it,” he said in an interview with Skai television. “If we had the money we would pay … They know we don’t have it.”

The government of leftist Prime Minister Alexis Tsipras promised to honor all its debt obligations when it struck a deal with the euro zone last week that extended Greece’s bailout program for four months. But Athens will get no more money until the EC, ECB and IMF have approved in detail its economic plans during the four-month period. With tax revenue falling far short of target last month and an economic recovery faltering, the state must repay an IMF loan of around €1.6 billion in March and find €800 million in interest payments in April. It then needs about €7.5 billion in July and August to repay the bonds held by the ECB and make other interest payments.

The ECB bought the bonds on the secondary market under its Securities Markets Programme (SMP) which aimed to reduce borrowing costs for troubled southern European governments during the euro zone debt crisis. However, Greece was frozen out of international debt markets, and more than four years later is still unable to fund itself commercially apart from limited issues of short-term treasury bills. Varoufakis, who has staged a media blitz in recent days to sell the euro zone deal to the Greek people, singled out former ECB President Jean-Claude Trichet for criticism. “One part of the negotiations will be on what will happen to these bonds which unfortunately and wrongly Mr Trichet bought,” he said.

“I see it as a mistake – but the ECB did this with the aim of keeping us in the markets in 2010. They failed.” Varoufakis argued that if the bonds had remained in investors’ hands, their value would have been cut by 90% under a restructuring of Greece’s privately held debt in 2012, reducing the burden on the state. The ECB bought the bonds at a deep discount and made large profits because their value rose as the euro zone debt crisis eased. Under Greece’s second bailout deal, these profits were due to be returned to Athens to help it repay debt. Athens received a partial payment in 2013 but eurozone countries are withholding a further €1.9 billion pending the review of Greece’s economic plans. Varoufakis wants this money sent directly to the IMF to meet the March payment.

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The Fed will stop being predictable, period. There’s no other way to raise rates and let Wall Street banks profit as much as possible.

Fed Won’t Be Predictable After Lifting Rates, Fischer Says (MarketWatch)

The era of the Federal Reserve giving forward guidance to financial markets about its next steps on monetary policy is coming to an end, a top U.S. central banker said Friday. Fed Vice Chair Stanley Fischer said the Fed would feel too constrained if it “pre-committed” to a steady path for interest rates and so the central bank would not “telegraph every action.” “I know of no plans of following a deterministic path to raise rates, I don’t believe it will happen,” Fischer said at a conference sponsored by the University of Chicago Booth School of Business. Instead, the Fed will take into account the behavior of the economy and “shocks we have to deal with.”

At the same time, he said the Fed “doesn’t want to take the markets by surprise on a regular basis” and would explain to investors a general sense of the Fed’s goals. In other comments, Fischer said the Federal Reserve’s bond buying programs, although completed, are is still currently depressing 10-year Treasury yields by about 110 basis points, a top U.S. central banker said Friday. Fischer said the estimate was based on a Fed staff study of the effect on the term premium on 10-year Treasury securities from the combination of all of the Fed’s asset purchase programs. With the Fed’s balance sheet near $4.5 trillion, the programs will continue to apply downward pressure on rates “for some time,” Fischer said. The effects will likely wane over the next few years as the balance sheet begins to normalize, Fischer said.

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All you need to know: “The velocity of money has fallen to a six-decade low in the US.”

“Monetary Policy Is Bankrupt” Dr. Lacy Hunt Warns (Tavares via Zero Hedge)

ET: Keynesian theory has pretty much dominated macroeconomic thinking over the last thirty years. Its “consume now, pay later” policies provide a short-term boost and fit well with politicians’ desire to prop up the economy on their watch. A large number of economists in government, private sector and academia, believe that adding more debt to a debt-inspired crisis is the only solution, and that at some point the economy will reach escape velocity and help pay down those debts. Do you subscribe to this view, especially at these very high debt levels in the economy?

LH: I think that monetary policy at this stage of the game is largely bankrupt. There is certainly nothing that they can do. Monetary policy works through price effects, quantity effects, the potential wealth effect and the currency depreciation effect. None of those mechanisms are operative. The price effects don’t work because the short-term interest rates are at the zero bounds, so that’s out of the picture. The US central bank, the ECB and the Bank of Japan have greatly expanded their balance sheets, but that’s not printing money. Money is an increase in deposits that are available to households and businesses. US monetary growth today is under 6% in the last 12 months, which is lower than when quantitative easing started. The Bank of Japan has doubled the monetary base in the last two years and yet M2 growth is 3% and a little bit more. The same is true in Europe.

Moreover, money alone does not determine economic activity. The velocity of money has fallen to a six-decade low in the US. It has been falling substantially in Europe, as in Japan. When you look at money growth and velocity it’s hard to see where nominal growth can be much better than 1% in Europe and Japan and no better than 2-2.5% in the US. Monetary policy does not benefit from quantitative effects when economies are extremely over indebted. The velocity of money falls and the banks are undercapitalized – banks don’t make loans based on excess reserves, but rather based on capital.

The currency depreciation option by excessive monetary liquidity does provide a transitory benefit. We saw this one when QE1 was started in the US, but that’s a transitory benefit: other countries eventually retaliate making everyone worse off. And the final option is the wealth effect but there is no empirical support for it. So there’s really nothing that monetary policy can do and the fact that inflation in the US is substantially lower than when all of these quantitative easing efforts started is an indication that such policies are a bankrupt effort.

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“Europe has now recognised that Greece has turned a new page..”

Greek PM Alexis Tsipras Rules Out Third Bailout (BBC)

Greece will not need a third international debt bailout when its current programme ends in four months, the country’s prime minister has said. Alexis Tsipras vowed his government would “start working hard” to change the country, which is saddled with a debt 175% of its GDP. Greece has already received two bailouts since 2010, totalling €240bn euros. Germany’s parliament ratified a four-month extension on Friday. While some MPs had expressed doubts about the deal and there was substantial public scepticism in the EU’s leading economic power, the vote passed easily. Parliaments in all 19 eurozone states must approve the extension for it to be granted, but Germany’s vote is seen as significant because of its key role as a creditor nation.

Reacting to the Bundestag vote, Mr Tsipras told the Euronews TV channel: “The German parliament gave Europe a vote of confidence today. “Europe has now recognised that Greece has turned a new page… We start working hard, in order to change Greece within a Europe that changes direction.” Greece remains frozen out of international debt markets, prompting speculation about a new bailout request. However, in a televised speech to his cabinet, Mr Tsipras said Greece’s bailout agreements were “over both in form and in essence”. “Some people are betting on a third bailout in July… but we will disappoint them,” he said.

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“And let’s not forget that it’s a lonely battle.”

A Fierce Battle Looms (Alexis Papachelas via Kathimerini)

There has been plenty of talk regarding cracking down on corruption and vested interests in this country. From Costas Karamanlis’s “pimps” we have arrived at Finance Minister Yanis Varoufakis’s e-mail. If you read it carefully, you realize that a large portion of the new program deals with this crucial issue. Besides, it’s common knowledge that the reason why the troika, and the IMF in particular, pulled the rug from underneath the government in the fall was because they felt that Antonis Samaras’s administration would not have dared to stand up to vested interests. SYRIZA’s rhetoric on this particular issue coincided to a large extent with the lenders’ conclusions.

Let’s assume that New Democracy and PASOK indeed failed to go up against “pimps” preying on certain crucial sectors of the economy, especially those tied to the state. But will the current administration succeed? Varoufakis appears rather obsessed with this matter and firmly believes that the country’s growth has been curbed because of these vested interests and corruption. This battle will be hard to win, however, even if the necessary political will is in place. To begin with, as strange as it may sound, a prime minister is particularly powerless in this case. In order to fight corruption you need institutions which are operating properly, as in other European countries, whether it’s the justice system or the ministries themselves.

And let’s not forget that it’s a lonely battle. Any PM wishing to fight vested interests – in other words to go after those bleeding the rest of society dry – will face a very tough front. Essentially, Alexis Tsipras is set to confront two very different groups. One the one hand are the romantics who had hoped for a rift with the eurozone as they believe that it’s legitimate for Greece to follow a non-European, Latin American growth model. They will fight Tsipras because he betrayed them.

Then there are also the cynics who hid behind the holy anti-bailout struggle out of fear they would be deprived of the kind of privileges and protection that allowed them to get unjustifiably rich without contributing anything to production. These people wanted the country to remain in the eurozone while they operated in a drachma-style environment – in other words without having to undergo any kind of checks – or to return to the drachma so that they could act as kings in a super-cheap banana republic. If Tsipras and Varoufakis mean what was written in the latter’s e-mail to the eurozone, the battle is bound to be ferocious. There is a lot of money involved and the profit margins are huge..

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“Varoufakis quickly realized that he was alone, that the other 18 finance ministers were against him. But he took it as validation for his approach.”

The Tortured Relationship between Schäuble and Varoufakis (Spiegel)

Varoufakis is the newest finance minister in the Euro Group; Schäuble has served the longest. Varoufakis is a professor of economics, a man always good for a clever turn of phrase and a beaming smile. Schäuble is better known for being caustic and irritable. He is a lawyer by training and prefers practice to theory; he is matter-of-fact and deeply skeptical of those who seek to grab the spotlight. And he doesn’t hold university professors in high regard. Since Schäuble has gotten to know his new colleague from Athens, his appreciation for economy professors has dropped even further. He is suspicious of those who believe in their own theories and who think that the world is predictable. For Wolfgang Schäuble, societal behavior cannot be easily explained, not even by social scientists. That is why, he believes, negotiated rules – and adherence to those rules – is the best policy.

For Yanis Varoufakis, the euro is a defective currency. For Schäuble, it is his legacy. The German minister is unconcerned with formalities. He doesn’t care if his Greek counterpart tucks in his shirt or not, nor would he be bothered if Varoufakis were to wrap it around his head like a turban. Former Swedish Finance Minister Anders Borg, after all, used to come to Euro Group meetings with his hair in a ponytail. But Borg possessed competence, authority and political gravitas, qualities that, from Schäuble’s perspective, the new Greek finance minister has not yet demonstrated. Schäuble was annoyed by Varoufakis’ insistence during his initial visit to Berlin that he could save not just his country, but the entire euro zone, from the clutches of austerity and install a new financial architecture. And he found the Greek finance minister’s presentation during his first Euro Group meeting, full of well-prepared and well-meaning proposals, to be confused and muddled.

Indeed, by the time Schäuble arrived in Brussels for last Friday’s meeting of euro-zone finance ministers, EU diplomats were finding it difficult to bring the two together in a single room. And tensions were high among others in the group as well. Jeroen Dijsselbloem, head of the Euro Group, had even planned to hold telephone conferences and individual meetings rather than bring everyone together. His concern was the consequence of vigorous disagreement during the previous meeting – a conflict which almost descended into blows. That, at least, is what the long-time Brussels correspondent Jean Quatremer reported, citing sources in the French delegation. Varoufakis, his report said, shouted “liar!” at Dijsselbloem over and over again until the meeting ended inconclusively. Varoufakis denies that version of events. He says the disagreement had to do with different versions of the compromise paper.

Varoufakis says he wasn’t aware that, according to Brussels custom, only the version on Dijsselbloem’s desk was official. The result was that last Friday’s Euro Group meeting was atomized, with small groups of two to four people meeting individually with Schäuble, with IMF head Christine Lagarde, with ECB head Mario Draghi and with Dijsselbloem. Varoufakis quickly realized that he was alone, that the other 18 finance ministers were against him. But he took it as validation for his approach. Late that night, he forwarded an article from Foreign Policy to his Twitter followers headlined “Greece Should Not Give In to Germany’s Bullying.” The piece speaks of the “dead hand of Merkelism” and argues that economic logic lies with the Greek finance minister.

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Kids in the sandbox.

Homeland Security Shutdown Looms After House Fails To Approve Funding (Guardian)

John Boehner’s first attempt to keep the Department of Homeland Security from running out of money at midnight failed in the House of Representatives after more than 50 Republicans baulked at his plan to fund it for just three more weeks. The House speaker had been hoping to prevent a shutdown by buying time to negotiate with conservatives in his caucus over their demands that the bill include a measure to prevent Barack Obama from deferring deportation of undocumented immigrants. But even this three-week stop gap was rejected by 52 Republican congressman who defied their party leadership and joined with Democrats to voted against the bill by 224 to 203 just after 5pm. The department runs out of funds at midnight.

Majority leader Kevin McCarthy concluded by saying: “Members are advised that additional votes are possible later this evening and may be this weekend.” Democrats resisted Boehner’s proposal in the hope of forcing House Republicans to follow their colleagues in the Senate and agree a one-year funding bill. But the impasse now sets up a dangerous game of chicken between the parties as each tries to see who will blink first before current funding for the department expires at midnight. Without funding, the department will be unable to pay tens of thousands of border guards, coast guards and other DHS staff, who will nevertheless have to turn up to work as they are deemed “essential workers”.

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Ooff… they just ordered more sand… nick of time…..

Congress Avoids Homeland Security Shutdown With Stopgap Measure

Congress averted a partial shutdown of the U.S. Department of Homeland Security with only two hours to spare by passing a stopgap funding bill that punts a fight over immigration into next week. The House of Representatives, with support from Democrats, voted 357-60 to send the measure to President Barack Obama for his signature. The Senate passed the measure by a voice vote. Hours earlier, the House failed to pass a three-week spending measure because 52 of Speaker John Boehner’s majority Republicans refused to support it. “It’s no way to govern the nation and the American people deserve better,” House Appropriations Chairman Hal Rogers said to boos from some lawmakers before the late-night vote. Nevertheless, the Kentucky Republican said, “It’s the 11th hour and we must act.”

Funding for Homeland Security operations was set to expire at midnight. Without new spending, thousands of employees would have been furloughed or required to work without pay. The House wants to use the Homeland Security funding bill to block Obama’s November orders that shielded about 5 million undocumented immigrants from deportation. The one-week extension ensures that the immigration issue will continue to dominate a congressional calendar that Republican leaders wanted to fill with debate over policy priorities including job creation, health care policy and curbing business regulations. Instead, Republicans are mired in an immigration debate that risks alienating Latino voters ahead of the 2016 presidential and congressional elections.

It’s a policy confrontation the party can’t win while Obama is in the White House. He has threatened to veto any reversal of his orders. The one-week bill, H.R. 33, carries the shutdown fight into next week when Israeli Prime Minister Benjamin Netanyahu will address Congress on security issues. The measure, which extends funding only through March 6, was backed by 183 Republicans and 174 Democrats. Voting no were 55 Republicans and five Democrats. Among the Republicans opposing the bill was Representative Mick Mulvaney of South Carolina, who accused Boehner of “unwillingness to challenge” Senate Minority Leader Harry Reid, a Nevada Democrat.

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“The 5X gain in the Fed’s balance sheet since 2009 has not been harmless——even though it has not stimulated the main street economy. What is has done, obviously, is reflate a massive financial bubble.”

Q4 Obliterates The Case For QE And ZIRP (David Stockman)

[..]..the case for the Fed’s massive money printing campaign has now been flat-out obliterated. As I documented in the Great Deformation, the short but deep recession of 2008-2009 represented a sharp liquidation of excess inventories and labor that had built up in the main street economy during the Greenspan-Bernanke housing and subprime credit bubble. But that one-time liquidation was over by June 2009; the economy was not sinking into a black hole. Moreover, by the time the US economy began to rebound in mid 2009, the real cause was the natural regenerative power of the capitalist market—not the massive money printing campaign that Bernanke had launched at the time of the Lehman failure in September 2008.

All of the massive liquidity – which took the Fed’s balance sheet from $900 billion to $2.5 trillion in less than a year – worked its magic in the canyons of Wall Street, not in the household and business sectors of the main street economy. The fact is, the only channel through which the Fed can impact the main street economy is through credit expansion. Yet business and household credit outstanding was still shrinking long after the recession ended. The 2% slog that began thereafter had nothing to do with the machinations of the Fed; its represented the return of a steady, modest increment of labor hours and productivity growth to the market economy. But here’s the thing. The 5X gain in the Fed’s balance sheet since 2009 has not been harmless——even though it has not stimulated the main street economy.

What is has done, obviously, is reflate a massive financial bubble. The latter will splatter eventually, sending the main street economy into a new tailspin of short-term labor and inventory liquidation and another financial crisis for no reason whatsoever. Indeed, the monetary politburo is stuck in a dangerous time warp. Not recognizing that the credit channel of monetary transmission is broken and done, they keep money market rates pinned to the zero bound because they claim to detect no acceleration of consumer price inflation on the immediate horizon. So what! Do not these clueless Keynesian apparatchiks recognize that the money market rate and the yield curve are the most important prices in all of capitalism, and that their policy of massive and continuous financial repression generates blatantly false prices in the financial markets and therefore rampant speculation and asset price inflation?

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How America sees educating its children: “The federal aid program .. lends money to students at below-market interest rates, regardless of credit history, with no money down, to purchase an asset that can’t be repossessed in the event of default.”

Should the US Make Billions From Student Loans? (Bloomberg)

A group of Senate Democrats, led by Elizabeth Warren of Massachusetts, urged the government to offer relief to distressed borrowers this week, even if that dampens the profit it makes from collecting on people with outstanding loans. In a letter to Education Secretary Arne Duncan dated Wednesday, the six senators wrote, “It is not the job of the Department of Education to maximize profits for the government at the cost of squeezing students.” The letter noted that a recent Congressional Budget Office estimate indicates the federal government will bring in $110 billion from these loans in the next decade. Denise Horn, a spokeswoman for the Education Department, said in an e-mail that the department is reviewing the letter. “[We] look forward to responding,” she wrote.

The department should make it easier for people to use the few tools available for demanding a refund on their student debt, the senators wrote. Borrowers who believe that their college committed fraud or lied to them—about job prospects or graduation rates, for example—can file what’s known as a “defense to repayment” claim against the school, according to federal law. But Warren and other senators have railed against the department for not making it clear enough to students how they could make such a claim. More broadly, the senators noted in the letter, the government has not used its power to cancel federal debts outright when the money went to a school that has been accused of abusing students.

“Instead, the Department continues to gouge borrowers who struggle to meet their payments, subjecting them to debt collection, wage and benefit withholding,” the senators wrote. Some point out, however, that there are risks inherent in handing money to people who might just get a degree in basket weaving, without checking their credit score. Lenders typically expect to be compensated for such risks. The federal aid program, education expert Kevin Carey wrote in the New York Times this month, “lends money to students at below-market interest rates, regardless of credit history, with no money down, to purchase an asset that can’t be repossessed in the event of default.”

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Better pay attention!

China Tells West To Consider Russia’s Security Concerns Over Ukraine (Reuters)

Western powers should take into consideration Russia’s legitimate security concerns over Ukraine, a top Chinese diplomat has said in an unusually frank and open display of support for Moscow’s position in the crisis. Qu Xing, China’s ambassador to Belgium, was quoted by state news agency Xinhua late on Thursday as blaming competition between Russia and the West for the Ukraine crisis, urging Western powers to “abandon the zero-sum mentality” with Russia. He said the “nature and root cause” of the crisis was the “game” between Russia and Western powers, including the US and the EU. He said external intervention by different powers accelerated the crisis and warned that Moscow would feel it was being treated unfairly if the West did not change its approach.

“The West should abandon the zero-sum mentality, and take the real security concerns of Russia into consideration,” Qu was quoted as saying. His comments were an unusually public show of understanding from China for the Russian position. China and Russia see eye-to-eye on many international diplomatic issues but Beijing has generally not been so willing to back Russia over Ukraine. China has also been cautious not to be drawn into the struggle between Russia and the West over Ukraine’s future, not wanting to alienate a key ally. It has said it would like to continue to develop “friendly cooperation” with Ukraine, and respects the ex-Soviet state’s independence, sovereignty and territorial integrity.

Qu’s comments coincide with talks between the United States and its European allies over harsher sanctions against Moscow. On Monday, Russian Foreign Minister Sergei Lavrov accused Western powers of trying to dominate and impose their ideology on the rest of world. The United States and European delegations slammed Moscow for supporting rebels in eastern Ukraine. Qu said Washington’s involvement in Ukraine could “become a distraction in its foreign policy”. “The United States is unwilling to see its presence in any part of the world being weakened, but the fact is its resources are limited, and it will be to some extent hard work to sustain its influence in external affairs, ” Qu was quoted as saying.

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Forgive us for believing, even for a moment, one single thing that came out of Kiev. What were we thinking? They’re building an amazing record.

UAE Denies Deal To Sell Military Equipment To Ukraine (RT)

The United Arab Emirates is not selling military equipment to Ukraine, despite earlier statements by Kiev officials, the UAE Foreign Ministry said. “An agreement on cooperation in defense technologies the UAE and Ukraine signed recently does not stipulate any contracts for deliveries of weaponry to the Ukrainian side,” said Faraj Faris al-Mazrouei, adviser to UAE Foreign Minister Abdullah bin Zayed Al Nahyan. The deal was only one element in a future system of cooperation between the two countries in the field of defense technologies, RIA Novosti reported al-Mazrouei as saying, citing the Emarat Al-Yawm news portal.

The UAE and Ukraine signed a memorandum of understanding on military-technical cooperation during the IDEX-2015 defense exhibition in Abu Dhabi earlier this week. After the signing, an advisor to Ukrainian Interior Minister Arsen Avakov, Anton Gerashchenko, wrote on social networks that this cooperation would include “the supply of certain types of arms and military equipment to Ukraine” by the UAE. “The types and volumes of supplies, as you can imagine, are not for disclosure on Facebook,” Gerashchenko said. The advisor stressed that “unlike Europeans and Americans, the Arabs aren’t afraid of Putin’s threats of a third world war starting in case of arms and ammunition supplies to Ukraine.”

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Who fought Franco, and how many of them were arrested? How ’bout Hemingway?

Spain Arrests Eight Nationals For Fighting With Rebels In Ukraine (Guardian)

Police have arrested eight Spanish men who returned from fighting alongside pro-Russia forces in eastern Ukraine, in what they said was the first operation of its kind in Europe. Officers detained the suspects in six regions across Spain after they returned from predominantly Russian-speaking eastern Ukraine, the interior ministry said in a statement. They had gone to Ukraine last year where they joined pro-Russia groups fighting for independence in the Luhansk and Donetsk regions, the statement added. The Spaniards belonged to the far left and were inspired by the International Brigades, the multinational volunteer forces that fought against Francisco Franco’s uprising during the Spanish civil war in the 1930s.

They are suspected of being accomplices in killings allegedly carried out by pro-Russia groups, and of possessing arms. “Their activities can be considered offences that compromise Spain’s peace or independence, as Spaniards who, while taking part in an armed conflict, violate the neutrality Spain must keep in relation to the international community,” the statement said. The interior ministry said it was the first operation in Europe directed against foreign fighters in Ukraine. Pro-Russia forces in eastern Ukraine are battling those of the Ukrainian government, which is backed by the west.

Over 30,000 foreign fighters are taking part in the conflict, according to the Ukrainian armed forces. A large number come from Russia and former Soviet states, but many have come from Israel, Serbia, Spain, Italy and Brazil. “These arrests sadden me,” a leader of Ukraine’s pro-Russian separatist rebels, in Donetsk, Denis Pouchiline, told AFP. “I think we are going to demand explanations from Spain over this incident. There are many volunteers in our ranks, the greatest number come from Russia, but there are representatives from Spain, Italy, France … it is the first time that they have these types of problems.”

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The western press will play it for all they can, as will the political field. But Putin had no reason to kill the guy, and wouldn’t have done it this way if he had.

Nemtsov Was No Threat To Russian Government – Kremlin (RT)

Boris Nemtsov did not pose a threat to the Russian government, according to presidential press secretary Dmitry Peskov. The murder of the Russian opposition figure has been called a “provocation” by a number of politicians and public figures. Boris Nemtsov was killed Friday evening in the center of Moscow. A veteran of Russian politics, he was an influential figure in the 1990s and held the post of deputy prime minister under former President Boris Yeltsin. Though he had been more involved in business than politics since 2003, he was a critic of the Russian government.

“With all due respect to the memory of Boris Nemtsov, in political terms he did not pose any threat to the current Russian leadership or Vladimir Putin. If we compare popularity levels, Putin’s and the government’s ratings and so on, in general Boris Nemtsov was just a little bit more than an average citizen,” Peskov said on Saturday. Russian President Vladimir Putin has condemned the assassination and expressed his condolences to the family, Peskov added. “Putin has stressed that this brutal murder has all [the] signs of a contract murder and is extremely provocative.”

Irina Khakamada, an opposition figure who was Nemtsov’s ally in the SPS party (Union of Right Forces), called the murder a “provocation” aimed at destabilizing Russia. “It is definitely not beneficial to Putin and it is aimed at destabilizing everything to tatters,” she said.

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