Apr 052017
 
 April 5, 2017  Posted by at 8:43 am Finance Tagged with: , , , , , , , , , ,  


DPC Times Square seen from Broadway 1908

 

JPMorgan CEO Jamie Dimon Warns ‘Something Is Wrong’ With the US (BBG)
US Housing Boom Is Anything But as Ownership Loses Appeal (A. Gary Shilling)
Young Americans Are Killing Marriage (BBG)
The Comex Is The World’s Most Corrupted Market (IRD)
The Real Russiagate (Paul Craig Roberts – Michael Hudson)
Fed Leak Probe Dooms Lacker But Leaves Key Question: Who Leaked? (BBG)
I Tried To Ask Yellen About The Fed Leak (Da Costa)
Australia’s Household Debt Crisis Is Worse Than Ever (Abc.au)
Australian Economy At Risk As Debt Bomb Grows (Aus.)
Chinese Brokers Are Muscling in on Asia’s Junk Bond Underwriters
Zombie Nation: In Japan, Zero Public Companies Went Bust in 2016 (BBG)
The World’s Best Economist (PCR)
New Zealand Post To Deliver KFC (AFP)

 

 

Actually, a lot is wrong. Including Dimon talking his book and people thinking he’s doing something else, like trying to help anyone other than himself.

JPMorgan CEO Jamie Dimon Warns ‘Something Is Wrong’ With the US (BBG)

JPMorgan CEO Jamie Dimon has two big pronouncements as the Trump administration starts reshaping the government: “The United States of America is truly an exceptional country,” and “it is clear that something is wrong.” Dimon, leader of world’s most valuable bank and a counselor to the new president, used his 45-page annual letter to shareholders on Tuesday to list ways America is stronger than ever – before jumping into a much longer list of self-inflicted problems that he said was “upsetting” to write. Here’s the start: Since the turn of the century, the U.S. has dumped trillions of dollars into wars, piled huge debt onto students, forced legions of foreigners to leave after getting advanced degrees, driven millions of Americans out of the workplace with felonies for sometimes minor offenses and hobbled the housing market with hastily crafted layers of rules.

Dimon, who sits on Donald Trump’s business forum aimed at boosting job growth, is renowned for his optimism and has been voicing support this year for parts of the president’s business agenda. In February, Dimon predicted the U.S. would have a bright economic future if the new administration carries out plans to overhaul taxes, rein in rules and boost infrastructure investment. In an interview last month, he credited Trump with boosting consumer and business confidence in growth, and reawakening “animal spirits.” But on Tuesday, reasons for concern kept coming. Labor market participation is low, Dimon wrote. Inner-city schools are failing poor kids. High schools and vocational schools aren’t providing skills to get decent jobs. Infrastructure planning and spending is so anemic that the U.S. hasn’t built a major airport in more than 20 years.

Corporate taxes are so onerous it’s driving capital and brains overseas. Regulation is excessive. “It is understandable why so many are angry at the leaders of America’s institutions, including businesses, schools and governments,” Dimon, 61, summarized. “This can understandably lead to disenchantment with trade, globalization and even our free enterprise system, which for so many people seems not to have worked.”

Read more …

I like Shilling. But this reeks of nonsense. It’s not about appeal, it’s about getting poorer.

US Housing Boom Is Anything But as Ownership Loses Appeal (A. Gary Shilling)

By many measures, the U.S. housing market seems in very good shape. The National Association of Realtors in Washington said last week that contracts to buy existing homes jumped 5.5% in February, the biggest increase since July 2010. Fannie Mae’s National Housing Survey showed that Americans expect home prices to rise a robust 3.2% over the next year as its sentiment index reached a record high. So, are boom times ahead for housing? Not quite. To understand why, it helps to revisit recent history. The housing bubble of the early 2000s was driven by subprime mortgages and other loose-lending practices. The subsequent collapse left many potential new homeowners with inadequate credit scores, not enough money for a down payment and insufficient job security to buy a house.

They also saw, for the first time since the 1930s, that not only house prices fall nationwide, but nosedive by a third. Homeownership plunged and those who did form households moved into rental apartments instead of single-family houses. That drove rental vacancy rates down and starts of multi-family housing – about two-thirds of which are rentals – up to 396,000 units, more than the earlier norm of 300,000 starts at annual rates. But single-family housing starts – even with the rebound to an 872,000 annual rate from the bottom of about 400,000 – are still far below the pre-housing bubble average of more than 1 million. Despite the recovery in house prices, rents have risen at a much faster pace. As a share of median income, rents have jumped while mortgage costs have fallen. The latest data from the National Association of Realtors show its Housing Affordability Index was up 52% in the fourth quarter of 2016 from the early 2007 low.

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Yesterday we saw IMF head Lagarde saying the loss of productivity can be solved with education. But the younger have had a boatload more education than their parents.

Young Americans Are Killing Marriage (BBG)

There’s no shortage of theories as to how and why today’s young people differ from their parents. As marketing consultants never cease to point out, baby boomers and millennials appear to have starkly different attitudes about pretty much everything, from money and sports to breakfast and lunch. New research tries to ground those observations in solid data. The National Center for Family and Marriage Research at Bowling Green State University set out to compare 25- to 34-year-olds in 1980—baby boomers—with the same age group today. Researcher Lydia Anderson compared U.S. Census data from 1980 with the most recent American Community Survey data in 2015. The results reveal some stark differences in how young Americans are living today, compared with three or four decades ago.

In 1980, two-thirds of 25- to 34-year-olds were already married. One in eight had already been married and divorced. In 2015, just two in five millennials were married, and only 7% had been divorced. Baby boomers’ eagerness to get married meant they were far more likely than today’s young people to live on their own. Anderson looked at the share of each generation living independently, either as heads of their own household or in married couples. The chance that Americans in their late twenties and early thirties live with parents or grandparents has more than doubled. In 1980, just 9% of 25- to 34-year-olds were doing so. In 2015, 22% lived with parents or grandparents. Millennials are also less likely than boomers to be living with kids—and to be homeowners.

It’s easy to look at these figures and say millennials are lagging behind their boomer parents. However, even as young Americans delay marriage, kids, and homeownership, they’re ahead of their parents by one measure: education.

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Dazzling. “Historically, when the amount of paper exceeds the amount of underlying commodity that is available for delivery by more than 20-30%, the CFTC intervenes by investigating the possibility of market manipulation. But never with gold and silver.”

The Comex Is The World’s Most Corrupted Market (IRD)

If you were to poll the public about comparing the investment returns between gold, silver and stocks during the first quarter of 2017, it’s highly probable that the majority of the populace would respond that the S&P 500 outperformed the precious metals. That’s a result of the mainstream media’s unwillingness to report on the precious metals market other than to disparage it as an investment. In reality, among silver, gold, the Nasdaq 100 and the S&P 500, the S&P 500 had the lowest ROR in Q1. Silver led the pack at 14%, followed by tech-heavy Nasdaq 100 at 11.1%, gold at 8.6% and the S&P 500 at 4.8%. Put that in your pipe and smoke it, Cramer. Imagine the performance gold and silver would have turned in if the Comex was prevented from creating paper gold and silver in amounts that exceeded the quantity of gold and silver sitting in the Comex vaults.

As an example, as of Friday the Comex is reporting 949k ozs of gold in the registered accounts of the Comex vaults and 9 million ozs of total gold. Yet, the open interest in paper gold contracts as of Friday totaled 41.7 million ozs. This is 44x more paper gold than the amount of physical that has been designated – “registered” – as available for delivery. It’s 4.6x more than the total amount of gold sitting on Comex vaults. With silver the situation is even more extreme. The Comex is reporting 29.5 million ozs of silver as registered and 190.2 million total ozs. Yet, the open interest in paper silver is a staggering 1.08 billion ozs. 1.08 billion ozs of silver is more silver than the world mines in a year. The paper silver open interest is 5x greater than the total amount of silver held in Comex vaults; it’s an astonishing 37x more than the amount of silver that is available to be delivered.

This degree of imbalance between the open interest in CME futures contracts in relation to the amount of the underlying physical commodity represented by those contracts never occurs in any other CME commodity – ever. Historically, when the amount of paper exceeds the amount of underlying commodity that is available for delivery by more than 20-30%, the CFTC intervenes by investigating the possibility of market manipulation. But never with gold and silver. The Comex is perhaps the most corrupted securities market in history. It is emblematic of the fraud and corruption that has engulfed the entire U.S. financial and political system. The U.S. Government has now issued $20 trillion in Treasury debt for which it has no intention of every redeeming. It’s issued over $100 trillion in unfunded liabilities (entitlements, pensions, etc) for which default is not a matter of “if” but of “when.”

Read more …

“..We are now in a position to see the real story behind “Russiagate.” It’s not about Russia, except incidentally…”

The Real Russiagate (Paul Craig Roberts – Michael Hudson)

Wall Street Journal editorialist Kimberley A. Strassel poses the real question: Why hasn’t the Trump administration had the Secret Service arrest Comey, Brennan, Schiff, the DNC and Hillary for trying to overthrow the President of the United States? “Mr. Nunes has said he has seen proof that the Obama White House surveilled the incoming administration—on subjects that had nothing to do with Russia—and that it further unmasked (identified by name) transition officials. This goes far beyond a mere scandal. It’s a potential crime.” What we are watching is turning out to be traces of a plot against a government elected by the American people. Attempts by House national security committee Chairman Devin Nunes have been countered with demands by his potential victims to recuse himself so as to stop his exposé of how “Team Obama was spying broadly on the incoming administration.”

[..] We are now in a position to see the real story behind “Russiagate.” It’s not about Russia, except incidentally. The Obama regime abused the government’s surveillance powers and spied on Donald Trump and other Republicans in order to build a dossier for the DNC to leak to the press in an attempt to slander or compromise Trump and throw the election to Hillary. They’ve been caught, but we can now see that they took steps to protect themselves against this. They prepared a cover story. They pretend they were not spying on Trump, but on Russians – which only by fortuitous happenchance turned up incriminating smoke against Trump. This cover story was buttressed by the fake news story prepared by former MI6 freelancer Christopher Steele.

As Whitney reports, Steele “was hired as an opposition researcher last June to dig up derogatory information on Donald Trump.” Unvetted and unverified information paid for by so-called informants “somehow” found its way into U.S. intelligence agency reports. These reports were then leaked to Democrat-friendly media. This is where the crime lies. Obama regime and DNC were using these agencies for domestic political use, KGB style. The Obama/Clinton cover story is now falling to pieces. That explains the desperation in the attack by Adam Schiff, the ranking Democrat on the House Intelligence Committee, on Committee Chairman Devin Nunes to stop the exposure. Russiagate is not a Trump/Putin collusion but a domestic spy job carried out by Democrats. Law requires Trump to arrest those responsible and to put them on trial for treason and conspiracy to overthrow the government of the United States.

Read more …

They end the investigation without answering the question that started it?!

Fed Leak Probe Dooms Lacker But Leaves Key Question: Who Leaked? (BBG)

The Federal Reserve’s inspector general says it will be ending its investigation into the 2012 release of confidential information. Even after the scandal cut short the career of one top Fed official, the answer to the most important question remains a mystery. Who did the initial leaking? Richmond Fed President Jeffrey Lacker resigned abruptly Tuesday as he announced his role in the unauthorized disclosure of information to Medley Global Advisors about policy options that the central bank was considering in 2012. His explanation suggested he was confirming facts the Medley analyst already knew. It was a sudden career stop for a Fed president who was frequently in opposition to the Fed board consensus on interest-rate policy, and the news will likely revive questions in Congress about the value of the central bank’s discretion and transparency.

“The story is not over today,” said Andrew Levin, a professor at Dartmouth College who was previously a special adviser at the Fed board and helped then-Vice Chair Janet Yellen develop the Fed’s policy on external communication. “There are a number of distinct details that suggest that Lacker wasn’t the main source of information.” Aaron Klein, a fellow at the Brookings Institution and the former chief economist on the Senate Banking Committee, said the Lacker statement “is not a full and complete accounting of what happened.” “The Fed, internally and its inspector general, would be wise to fully explore every aspect of what happened here because today’s actions and statements by Lacker raise more questions than they answer,” he said.

[..] Lacker’s carefully worded statement, distributed by his attorney, said he “crossed the line to confirming information that should have remained confidential.” The investigation into Lacker has concluded and no charges will be brought against him, the attorney said. He also said the Medley analyst “introduced into the conversation an important non-public detail” about one of the policy options under consideration. Lacker says he didn’t decline to comment “and the interview continued.” His statement doesn’t suggest that he tipped the Medley analyst initially. Indeed, the Fed board’s own investigation said “a few Federal Reserve personnel” had contact with the Medley analyst.

Read more …

Lacker the only leaker? Doesn’t quite look that way.

I Tried To Ask Yellen About The Fed Leak (Da Costa)

I once asked Janet Yellen a rather straightforward question that would echo for much longer than I expected. It was March 2015, and the Federal Reserve was under pressure from Congress to reveal details about an internal investigation into how key details of its interest rate policy deliberations had made their way into a report by a private sector firm. I was a reporter at the Wall Street Journal, and I asked the following at a press conference:

Let’s make something clear: Like any journalist, I love a good leak. But this was not your typical leak of important information to a journalist who then reported it to the public. This was the sharing of private, market-sensitive details with a private party – Medley Global Advisors – which then shared that information with its clients. The leak, it should be noted, happened all the way back in 2012 but it was still being discussed in 2015 because – despite the Fed’s internal investigation – nobody seemed to have gotten to the bottom of what had happened. And back in 2012, any read on what the Federal Reserve might do to suppress interest rates as the US economy continued to crawl out of the Great Recession, could lead to huge profits for the traders who bet on such things. These days, traders are thinking about the next rate hike.

Back then, interest rates were already at zero and the real insight gleaned from Medley’s report was how aggressively the Fed would work to keep them there by using its balance sheet. My question to Yellen had to do with basic public trust in the Fed. Why should the American people believe the central bank is working in its best interests if policymakers chat privately with movers and shakers on Wall Street? This was an alarming trend I had been reporting on since 2010, when I co-authored a report for Reuters entitled “Cozying up to big investors at Club Fed.” In it, my colleagues and I detailed other instances of market-moving information inappropriately being shared with investors, a trend we first observed when Fed officials speaking to bankers and hedge fund managers at conferences would suddenly go silent when a reporter walked by.

After the Yellen press conference, I took two weeks of paid leave for the birth of my daughter. When I returned, my editor at the paper told me I would no longer be attending Fed press conferences. No reason was given, and I left the job a few months later. Market bloggers speculated the Fed had “banned” me from the press conference. I have no reason to think that was the case because the central bank let me back in as soon as I changed news organizations. Fast-forward to April 4, 2017: Richmond Fed President Jeffrey Lacker resigns abruptly after admitting he was a source of the leak. As soon as I saw the news, the whole press conference incident flashed before my eyes. But Lacker’s admission that the Medley leak originated with him doesn’t entirely settle the matter. We know Yellen also met with Medley herself. Why? What did she say to them? Former Fed economist and Treasury official Seth Carpenter was also under scrutiny on the issue. What were the results of the Fed’s own investigation? And of Congress’?

Read more …

Meanwhile in the gutter….

Australia’s Household Debt Crisis Is Worse Than Ever (Abc.au)

Mr Russell told me there had been a big increase in debt-distressed Australians calling the [National Debt] helpline in recent months unable to pay their utilities bills. Naturally, he explained, rent and mortgage repayments take priority over the utilities bills because, in the order of survival priorities, you first need a roof over your head. Generally speaking, though, the National Debt helpline told me the rising cost of living is becoming crippling. Utilities bills, mortgage repayments and credit card debt, are all contributing to household financial stress. Last year over 150,000 calls were made to the National Debt Helpline. This year, monthly call volumes for the helpline are already 20% higher, compared to 2016. Based on current call volumes, the NDH predicts that there will be over 182,000 calls this year.

Martin North is the principal of financial research firm Digital Finance Analytics. He crunched the numbers and calculated that, in March, of the 3.1 million mortgaged households, around 22% were in “mild mortgage stress”. That’s up 1.5% on February, and is directly related to the even the smallest of interest rate increases by some of the big four banks. That means those households are managing to make their mortgage repayments, but only by cutting back on other expenditure, or putting more on credit cards, and generally hunkering down. Then there are those Australians under extreme levels of financial stress. Data from Digital Finance Analytics show 1% of households are in severe stress. That means they’re behind with their repayments, and are trying to dig their way out by refinancing, selling their property, or seeking help from services like the National Debt Helpline.

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Ha ha: “Our banks are resilient and they are soundly capitalised,” he said.”

Australian Economy At Risk As Debt Bomb Grows (Aus.)

The rampant debt-fuelled surge in the Sydney and Melbourne property markets will threaten the health of the national economy if it continues, Reserve Bank governor Philip Lowe has warned. However, Treasurer Scott Morrison has talked down drastic action on house prices after a “strong intervention” from Dr Lowe. The RBA is worried that housing debts are rising more than twice as fast as household incomes and that banks are lending to people who cannot afford to repay their debts. The concern has been that the longer the recent trends continued, the greater the risk to the future health of the Australian economy, Dr Lowe told a business dinner in Melbourne last night. “Stretched balance sheets make for more volatility when things turn down.” “For many people, the high debt levels and low wage growth are a sobering combination.”

The chairman of the government’s Financial System Inquiry, former Future Fund chairman David Murray, yesterday sounded a further alarm on the housing boom, saying a crisis on the scale of the 1890s great property collapse could not be ruled out. “What people should do is look at the 1890s, which was caused by a housing land boom,” he told The Australian. “To say it won’t happen and simply ignore it is wrong.” Half of the nation’s banks closed their doors following the 1890s crash. “Many people say a crisis has a low probability of occurrence, but the problem with that view is that whatever the probability, the severity can be very high if it occurs”, Mr Murray, who is also a former Commonwealth Bank chief executive, said. “It shouldn t be allowed to grow & it’s too big a risk to take.”

[..] House prices in Australia’s capital cities have risen 12.9% compared with this time last year, with a surge of 18.9% in Sydney and 15.9% in Melbourne, according to data released on Monday by property analytics firm CoreLogic. [..] Dr Lowe dismissed fears that the banks would be undermined by a housing downturn, saying the Council of Financial Regulators did not believe the boom was a threat to financial stability. “Our banks are resilient and they are soundly capitalised,” he said.

Read more …

In China, the shadow banks are taking over…

Chinese Brokers Are Muscling in on Asia’s Junk Bond Underwriters

China’s brokerages are out-muscling global investment banks to win more underwriting business in Asia’s junk bond market amid record offerings, as they increasingly help borrowers from the nation raise foreign currency debt. Haitong Securities topped the league table for high-yield notes denominated in dollars, euro and yen from companies in Asia excluding Japan in the first quarter, according to data compiled by Bloomberg. China Merchants Securities moved up four places to fifth. While HSBC rose three places to second, Standard Chartered and UBS slid to eighth and 11th from first and second in the first quarter of 2016. Junk bonds offer more lucrative fees than high-grade bonds, giving an extra boost to financial institutions that can expand in the business.

As Chinese firms have flocked to the offshore high-yield market, mainland banks and brokerage firms have grabbed market share away from international peers. Issuance of junk notes in dollars, euro and yen from Asia excluding Japan swelled to a record $14.6 billion in the first quarter, with nearly 70% from Chinese companies. “It’s increasingly competitive and Chinese banks are effectively buying market share with their balance sheet,” said Veronique Lafon-Vinais at the Hong Kong University of Science and Technology. Alexi Chan, global co-head of debt capital markets at HSBC, said that the significant rise in Asia high-yield bond sales reflected the “constructive market sentiment” and “positive outlook for China’s economy.”

Read more …

… and in Japan, the zombies take over.

Zombie Nation: In Japan, Zero Public Companies Went Bust in 2016 (BBG)

Corporate Japan achieved a rare feat in the fiscal year that ended last week. Not one of its almost 4,000 publicly-traded firms filed for bankruptcy protection. Yet that’s no reason to celebrate, according to analysts who see Japan’s easy credit conditions standing in the way of a much-needed, corporate restructuring to flush out failing companies and make room for new businesses. “It’s totally unhealthy,” says Martin Schulz, an economist at Fujitsu Research Institute in Tokyo. “Japan’s business cycle isn’t working. When no old companies go out of business, no new ones can come in because there isn’t room. The old companies will always compete on price, simply because they can.”

The last time not a single Japanese corporate titan went belly up was a four-year stretch 26 years ago, according to a report published this week by research firm Teikoku Databank. Back then, though, an overheated Japanese economy averaged 5.5% growth per year and then hit a wall when stock and real estate asset bubbles burst. This time, ultra-low interest rates and government loan guarantees left over from the global financial crisis are keeping companies afloat. Prime Minister Shinzo Abe touts fewer business failures as an economic success, but critics say too-easy credit is keeping “zombie” firms alive, worsening labor shortages, and excess competition is putting downward pressure on prices.

The Austrian economist Joseph Schumpeter in 1942 coined the term “creative destruction” to describe the messy way that capitalism reinvents itself. Japan may be stuck in a rut because it refuses to take the economic pain needed for a revival. Yet it’s hardly the only country keeping companies on life support. A January study by the OECD blamed zombies – defined as firms with persistent difficulties paying interest on debt – for slowing productivity, and thus causing sluggish growth, in the developed world. In South Korea, where the shipping industry has been hit by slumping global trade, state-run banks last month agreed to lend Daewoo Shipbuilding $2.6 billion and swap debt for equity to prevent a default. It was the second time in less than two years that the troubled shipbuilder was bailed out.

In China, roughly 10% of the country’s publicly-traded companies are “among the walking dead,” being kept alive by continuous support from government and banks, according to research by He Fan, an economist at Beijing’s Renmin University. Banks keep lending, often because they don’t want to own up to their bad debts. Meanwhile, the government fears the unemployment that would result if so many troubled firms were left to wither away.

Read more …

“..the owners of property along the subway line experience a rise in property values. They owe their increased wealth and their increased incomes from the rental values of their properties to the expenditure of taxpayer dollars. If these gains were taxed away, the subway line could have been financed without taxpayers’ money.”

The World’s Best Economist (PCR)

If you want to learn real economics instead of neoliberal junk economics, read Michael Hudson’s books. What you will learn is that neoliberal economics is an apology for the rentier class and the large banks that have succeeded in financializing the economy, shifting consumer spending power from the purchase of goods and services that drive the real economy to the payment of interest and fees to banks. His latest book is J is for Junk Economics. It is written in the form of a dictionary, but the definitions give you the precise meaning of economic terms, the history of economic concepts, and describe the transformation of economics from classical economics, where the emphasis was on taxing incomes that are not the product of the production of goods and services, to neoliberal economics, which rests on the taxation of labor and production.

This is an important difference that is not easy to understand. Classical economists defined “unearned income” as “economic rent.” This is not the rent that you pay for your apartment. Economic rent is an income stream that has no counterpart in cost incurred by the receipient of the income stream. For example, when a public authority, say the city of Alexandria, Virginia, decides to connect Alexandria with Washington, D.C., and with itself, with a subway paid for with public money, the owners of property along the subway line experience a rise in property values. They owe their increased wealth and their increased incomes from the rental values of their properties to the expenditure of taxpayer dollars. If these gains were taxed away, the subway line could have been financed without taxpayers’ money.

It is these gains in value produced by the subway, or by a taxpayer-financed road across property, or by having beachfront property instead of property off the beach, or by having property on the sunny side of the street in a business area that are “economic rents.” Monopoly profits due to a unique positioning are also economic rents. Hudson adds to these rents the interest that governments pay to bondholders when governments can avoid the issuance of bonds by printing money instead of bonds. When governments allow private banks to create the money with which to purchase the government’s bonds, the governments create liabilities for taxpayers than are easily avoidable if, instead, government created the money themselves to finance their projects. The buildup of public debt is entirely unnecessary.

No less money is created by the banks that buy government bonds than would be created if the government printed money instead of bonds. The inability of neoliberal economics to differentiate income streams that are economic rents with no cost of production from produced output makes the National Income and Product Accounts, the main source of data on economic activity in the US, extremely misleading. The economy can be said to be growing because public debt-financed investment projects raise the rents along subway lines. “Free market” economists today are different from the classical free market economists. Classical economists, such as Adam Smith, understood a free market to be one in which taxation freed the economy from untaxed economic rents. In neoliberal economics, Hudson explains, “free market” means freedom for rent extraction free of government taxation and regulation. This is a huge difference.

Read more …

I got nothing. We’re doomed.

New Zealand Post To Deliver KFC (AFP)

New Zealand Post has announced its couriers will home-deliver KFC fast food, in a trial that could provide a recipe for success as letter volumes continue to dwindle. Under a pilot scheme that started this week in the North Island town of Tauranga, KFC customers can order online and have their food delivered by NZ Post drivers. KFC operator Restaurant Brands NZ said that while it knew how to produce food, it had no experience in logistics, making the postal service a natural fit. “NZ Post has an extensive delivery distribution network around New Zealand, and KFC is available in most towns nationwide,” chief executive Ian Letele said.

“With the support of NZ Post, we hope to service the home delivery needs of many more KFC customers throughout New Zealand.” New Zealand Post has struggled in the digital age as email and texts have replaced traditional “snail mail”. The state-owned service slashed 2,000 jobs, or 20% of its workforce in 2013, and two years later moved to three-day-a-week deliveries, down from six. It said in its last financial statement that the fall in letter deliveries meant it was losing up to NZ$30 million ($21 million) a year in revenue. However, it said parcel volumes were up due to rising online orders and NZ Post was concentrating on capturing more e-commerce business.

Read more …

Apr 042017
 
 April 4, 2017  Posted by at 8:59 am Finance Tagged with: , , , , , , , , , ,  Comments Off on Debt Rattle April 4 2017


Esther Bubley Child living in alley near US Capitol 1943

 

Living Standard Will Fall Without Productivity Boost, Warns IMF (G.)
67% Of Low-Income Americans Worry A Lot About Hunger, Homelessness (ZH)
The Issue With China Isn’t Trade, It’s Excess Savings (Pettis)
Toronto Bidding Wars So Fierce That Homebuyers Skip Inspections
Can Housing Bubbles Be Stopped? (WSJ)
Cernovich Explains How He Learned About Susan Rice (ZH)
The Deep State Now Works For The ‘Good Guys’ (AlJ)
The Deep State Now Works For The ‘Good Guys’ (AlJ)
Putin Derangement Syndrome Arrives (Matt Taibbi)
Euro MPs ‘Unanimously’ Condemn Dijsselbloem’s No-Show (AFP)
Greek Pensions Hot Potato Puts Tsipras in Tight Spot on Bailout (BBG)
Austerity-Crushed Greek Households Keep Cutting Food Purchases (TNH)
Youth Unemployment Shows Euro-Area Recovery Not Working for All (BBG)
Erdogan Says Turks In Europe Should Defy ‘Grandchildren Of Nazism’ (R.)
Yes, Let’s Allow The Syrian People To Decide For Themselves (Ron Paul)
New Evidence Undermines EU Report Tying Refugee Rescue Group To Smugglers (IC)
The Vanishing Art Of Seizing The Day (Krznaric)

 

 

Interesting. I’m sure Lagarde has no idea why productivity fell. She has some textbook explanation, for sure, but her ‘solutions’ are bland: education and technology. But those were available all along as productivity was falling. Plus, technology costs jobs too. Then again, for the IMF there’s always ‘reforms’ of course: more globalization. But wait: that also costs jobs. Question then: if you lose enough jobs, will productivity rise?

Living Standard Will Fall Without Productivity Boost, Warns IMF (G.)

The head of the IMF has issued a stark warning that living standards will fall around the world unless governments take urgent action to increase productivity by investing in education, cutting red tape and incentivising research and development. Christine Lagarde used a speech in Washington to tell policymakers they could not simply wait for innovation to drive up productivity growth and help living standards recover from the legacy of the global financial crisis. She highlighted a poor global record on productivity growth in recent years and said IMF analysis suggested GDP in advanced economies would be about 5% higher today if the pre-crisis trend had continued for total factor productivity growth – a broad measure of what goes into production, such as research spending.

“That would be the equivalent of adding another Japan – and more – to the global economy,” the IMF managing director in a speech to the American Enterprise Institute. Legarde warned the world could not afford to leave productivity growth in the doldrums. “Another decade of weak productivity growth would seriously undermine the rise in global living standards. Slower growth could also jeopardise the financial and social stability of some countries by making it more difficult to reduce excessive inequality and sustain private debt and public obligations. “Leaning back and waiting for artificial intelligence or other technologies to trigger a productivity revival is simply not an option.”

[..] In the UK, productivity growth has been sluggish for years and is behind most other big economies, prompting the chancellor, Philip Hammond, to pledge more investment in infrastructure and other areas with a £23bn national productivity investment fund. Calling on all governments to do more, Lagarde sought to emphasise productivity as the most important source of higher income and rising living standards. “For example, the average American worker today works only about 17 weeks to live at the annual real income level of the average worker in 1915,” she said. That kind of progress had been seen in many countries, she added. “But this engine of prosperity has slowed down in recent years, with negative consequences for growth and incomes that look very hard to unwind.”

She also echoed concerns over how rapid changes in technology had cost jobs in some sectors, hitting lower skilled workers hardest. Governments must help such workers through targeted education programmes, Lagarde said. That in turn would help solve productivity problems and create more inclusive and sustainable growth.

Read more …

Bit of a vague survery, but who today is going to be surprised at the outcome?

67% Of Low-Income Americans Worry A Lot About Hunger, Homelessness (ZH)

Something unexpected happened on the road to Obama’s economic “recovery” – according to Gallup, over the past two years, a record two-thirds, or an average of 67% of lower-income U.S. adults, up from 51% from 2010-2011, have worried “a great deal” about the problem of hunger and homelessness in the country. They are not alone: concern has also increased among middle- and upper-income Americans, but they still worry far less than do lower-income Americans. Some details: since 2001, worry has been highest among those residing in lower-income households, likely because those with limited financial resources are more at risk of going hungry or becoming homeless. A consistent majority of lower-income adults worried about the problem before 2012, but that has only increased in the past five years. Concern among middle-income Americans in 2016-2017 falls just short of the majority level at 47%, while 37% of upper-income Americans are worried.

Rising concern among all income groups could be a result of the political and media attention devoted to U.S. income inequality in recent years. Americans may also worry more about hunger and homelessness when other issues are not dominating the national consciousness, such as the economy and budget deficit were in 2010-2011 and terrorism was in the years after 9/11. Overall, 47% of Americans now worry about hunger and homelessness “a great deal,” according to Gallup’s March 1-5 survey, tied with 2016 as the high in the trend. Previously, concern had been as low as 35% in 2004 and as high as 45% in 2001, the first year Gallup asked the question.

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In which paying off debt is counted towards savings. And not savings at household level.

The Issue With China Isn’t Trade, It’s Excess Savings (Pettis)

trade imbalances were mostly determined by direct differences in the cost of traded goods, while capital flowed from one country to another mainly to balance trade flows. Today, however, conditions have changed dramatically. Capital flows dwarf trade flows, and investment decisions by fund managers determine their direction and size. This has profound implications for trade. Large, persistent trade surpluses such as the one China runs with the U.S. are no longer the consequence of explicitly mercantilist measures. Instead, they’re driven by policies that distort domestic savings rates by subsidizing production at the expense of households. Take Germany, for example. After a decade of trade deficits and high unemployment, worried leaders in Berlin implemented labor reforms in 2003-05 whose main effect was to weaken wage growth.

As unemployment dropped and business profits surged, the reforms also shrunk the share of national income allocated to ordinary households, driving down the consumption share as well. German businesses, blessed with higher profits, responded unhelpfully. They paid down debt instead of investing the profits, increasing the share of national income devoted to savings. As the growing gap between German savings and investment soon became among the largest in history, so did the German trade surplus. German banks exported the excess savings into other European countries, no longer protected by the interest-rate and currency adjustments proscribed under the rules of the euro. By 2009, after insolvency prevented one European country after another from absorbing any more of the German tsunami of capital outflows, these shifted to countries outside Europe.

While the experiences of China and Japan may seem different on the surface, they were broadly similar in impact. China, for example, severely repressed interest rates in order to boost growth. This simultaneously reduced the household share of Chinese GDP to among the lowest ever recorded and raised Chinese savings to among the highest – so high that, even with the fastest-rising investment in the world, China still needed large trade surpluses to make up for weak domestic demand. What happens next is the most confusing part for economists who don’t understand how trade has changed. When new capital pours into advanced economies that have always had easy access to investment – such as the U.S. and southern Europe – it doesn’t boost investment further. Instead it automatically causes savings to contract.

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Not a bubble. Why of sound mind gets into this?

Toronto Bidding Wars So Fierce That Homebuyers Skip Inspections

In Toronto, some homebuyers are so desperate to win bidding wars that they’re rushing to make offers without even getting an inspection. The average price for a detached home in Canada’s largest metropolitan area jumped to C$1.21 million ($905,950) in February, up a third from a year earlier, amid a dearth of properties for sale. In the same period, Toronto-based home-inspection firm Carson Dunlop saw a 34% drop in volume. Murray Parish, president of the Ontario Association of Home Inspectors, said he’s seen a 30% decline at his firm, Parish Home Inspections. “The bottom line is we are in a shortage of supply,’’ said Tasis Giannoukakis, a Century 21 broker based in Toronto, adding that it’s not uncommon to see bids of as much as C$200,000 over the asking price.

“That pressure is what’s causing everybody to remove the conditions on an inspection.’’ Home-price increases in North America’s fourth-largest city and its suburbs have outpaced growth in places including Manhattan, Vancouver, Seattle and San Francisco, leading local officials to search for ways to control price gains and spurring concerns a correction may be coming. The frothy market, buoyed by low interest rates, is resulting in frenzied bidding wars, causing many shoppers to leave once-standard clauses such as a professional home inspection and financing contingencies out of their purchase offers. A move away from inspections isn’t unique to Toronto.

Vancouver, Canada’s hottest real estate market until Toronto took that mantle last year, saw a surge in unconditional purchase offers in the first half of 2016, said Adil Dinani, an agent with Royal LePage West Real Estate Services in the West Coast city. The same is true in hot U.S. markets. Mark Attarha, president of Bay Sotheby’s International Realty, which has seven offices in the in San Francisco Bay area, said he’s seeing a spate of offers without contingencies, along with a raft of “overbidding.” Attarha estimates that 75% of prospective buyers he works with are accepting a home-inspection report from the seller rather than ordering their own or including an inspection clause in their purchase offers.

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Let your house do the work for you: “Demand in Melbourne is driving up valuations of house land plots by $7,500 a week..”

Can Housing Bubbles Be Stopped? (WSJ)

From Australia to Canada, authorities are learning a hard lesson in their efforts to curb the foreign money flooding their property markets: deterrents quickly lose their punch. In recent years, regulators in several countries have raised taxes on residential real-estate purchases, required banks to demand bigger down payments and taxed empty homes—to little long-term avail. Now they are trying again. Australian regulators on Friday ordered banks to limit the flow of interest-only loans—a villain in the U.S. subprime mortgage crisis—to 30% of new loans from about 40% now and to restrict loans to people making small down payments. The country’s corporate regulator said on Monday it was investigating whether lenders and mortgage brokers are inappropriately promoting interest-only loans.

New South Wales state, home to Sydney, is considering a further property-tax rise for foreigners. The moves are an attempt to blunt a price rise that has resumed after the last crackdown starting in late 2014. House prices in Sydney and Melbourne, the nation’s two biggest cities, rose by about 19% and 16% in the year through Mar. 31, much of it in the last six months, according to an analysis by data company CoreLogic released on Monday. The median house price in Sydney hit $821,000 last year, according to Demographia, a U.S. think tank. It said the figure, equivalent to 12.2 times the average annual wage, made Sydney the world’s second most expensive city after Hong Kong on a house-price-to-income ratio. Demand in Melbourne is driving up valuations of house land plots by $7,500 a week, said Giles Bray, a local mortgage broker.

Developers are now building 300-square-foot apartments—roughly a third of the average new American unit—with 8-foot ceiling heights to pack in more units. In the past three years, foreigners have bought thousands of them sight unseen. “They are poorly built and lack light,” Mr. Bray said. The gains are testing the limits of government measures aimed at preventing housing bubbles from developing in cities around the world. The frothiness is driven by ultralow interest rates at central banks that spur investors to hunt for returns in tangible assets. Chinese investors also are a big driver of the phenomenon. The concern: foreign, speculative investors are making properties unaffordable for locals and adding economic risk because these buyers are more likely to flee in a downturn. In 2010 the Reserve Bank of Australia tightened policy to cool things off. But lately the central bank has been keeping rates at a record-low 1.5% to aid an economy that is still struggling to adjust at the end of a long mining boom.

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The Susan Rice story has many quirks. A big one: what did Obama know? RandPaul wants her to testify under oath to that. It could go a long way towards proving Trump’s wiretap allegations. But also very odd: BBG and NYT sat on the story for -at least- days. And yes, Cernovich is a bit of an oddball. But he has proof, something that’s still sorely lacking for all of the Russia narrative. So much so that it doesn’t matter anymore if proof comes eventually: the US media have published millions of words of innuendo and accusations without any proof. That may work in the echo chamber, but it kills your credibility outside of it.

Cernovich Explains How He Learned About Susan Rice (ZH)

Ever since Mike Cernovich dropped the bombshell report over the weekend outing Obama’s National Security Advisor, Susan Rice, as the person behind the unmasking of the identity of various members of Trump’s team who were ‘incidentally’ surveilled during the 2016 campaign, a report which was subsequently confirmed by Eli Lake of Bloomberg earlier this morning, everyone has been wondering who within the Trump White House or the intelligence community supplied him with such a massive scoop. But, as it turns out, Cernovich didn’t need a ‘deep throat’ within the NSA or CIA for his blockbuster scoop, all he needed was some well-placed sources inside of a couple of America’s corrupt mainstream media outlets. As Cernovich explains below, his sources for the Susan Rice story were actually folks working at Bloomberg and the New York Times who revealed that both Eli Lake (Bloomberg) and Maggie Haberman (NYT) were sitting on the Susan Rice story in order to protect the Obama administration.

“Maggie Haberman had it. She will not run any articles that are critical of the Obama administration.” “Eli Lake had it. He didn’t want to run it and Bloomberg didn’t want to run it because it vindicates Trump’s claim that he had been spied upon. And Eli Lake is a ‘never Trumper.’ Bloomberg was a ‘never Trump’ publication.”

“I’m showing you the politics of ‘real journalism’. ‘Real journalism’ is that Bloomberg had it and the New York Times had it but they wouldn’t run it because they don’t want to run any stories that would make Obama look bad or that will vindicate Trump. They only want to run stories that make Trump look bad so that’s why they sat on it.”

“So where did I get the story? I didn’t get it from the intelligence community. Everybody’s trying to figure out where I got it from. I got it from somebody who works in one of those media companies. I have spies in every media organization. I got people in news rooms. I got it from a source within the news room who said ‘Cernovich, they’re sitting on this story, they’re not going to run it, so you can run it’.”

“If you’re at Bloomberg, I have people in there. If you’re at the New York Times, I have people in there. LA Times, Washington Post, you name it, I have my people in there. I got IT people in every major news room in this country. The IT people see every email so that’s how I knew it.”

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“Anyone, including experienced journalists, who raises questions or recommends caution is immediately dismissed as a Putin stooge or a Trump apologist by an army of progressives convinced, with obdurate certainty, of who is guilty and what is true.”

The Deep State Now Works For The ‘Good Guys’ (AlJ)

US progressives are clinging on to false heroes like the FBI and CIA in their existential battle to dethrone Trump. [..] In Comey’s case, his rather abrupt and miraculous transformation from devil to saint came after his March 20 testimony before a House Intelligence Committee where he finally, belatedly, confirmed that the FBI was indeed investigating the disturbing, cob-web-like connections between the Trump campaign team and Russia before, during and after the presidential election. Ah, now that the G-men are on the case, the indictments would surely follow, the familiar progressive chorus wrote. Trump’s days are numbered. Resignation and impeachment are in the offing. The cavalry is riding to America’s rescue. Comey’s role in torpedoing Clinton’s chances at becoming America’s first female president has fast receded into the rear-view mirror.

The political executioner has become a prince of probity and the rule of law. Defying history and credulity, joining Comey and the FBI in the progressives’ new-found white knight brigade are, incredibly, the CIA and the National Security Agency (NSA). Like the FBI, the spooks are also being widely celebrated as guardian angels in the existential battle to dethrone the treasonous King. The thinking – such as it is – goes something like this: the CIA and NSA must have the surreptitious “goods” on Trump and his gang of Russian mob and FSB consorting thugs that they will, in time, share with Americans and the world. The “goods” perhaps involves oodles of various types of intercepted and incriminating communications and possibly even a notorious Moscow hotel videotape, starring the deviant king himself.

And the hope is that, taken together, it will all eventually expose and doom him. Apparently, these days, the “deep state” is no longer working for the bad guys, but the good guys. It has, in effect, changed sides. Sure, the deep state may have denied Clinton her rightful and long overdue crown and has, for years, systematically spied on, collected and stored intimate details about the lives of countless people with little or no oversight, let alone a warrant. But progressives are too busy letting bygones be bygones to remember. The good guys have fixed their crosshairs on Trump and treacherous company and that’s all that matters.

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“One way we recognize a mass hysteria movement is that everyone who doesn’t believe is accused of being in on the plot..” Journalism should not ever be about ‘belief’, but about proven facts. But there are none. oh, and the syndrome doesn’t ‘arrive’, it’s been here for a long time.

Putin Derangement Syndrome Arrives (Matt Taibbi)

So Michael Flynn, who was Donald Trump’s national security adviser before he got busted talking out of school to Russia’s ambassador, has reportedly offered to testify in exchange for immunity. For seemingly the 100th time, social media is exploding. This is it! The big reveal! Perhaps it will come off just the way people are expecting. Perhaps Flynn will get a deal, walk into the House or the Senate surrounded by a phalanx of lawyers, and unspool the whole sordid conspiracy. He will explain that Donald Trump, compromised by ancient deals with Russian mobsters, and perhaps even blackmailed by an unspeakable KGB sex tape, made a secret deal. He’ll say Trump agreed to downplay the obvious benefits of an armed proxy war in Ukraine with nuclear-armed Russia in exchange for Vladimir Putin’s help in stealing the emails of Debbie Wasserman-Schultz and John Podesta.

I personally would be surprised if this turned out to be the narrative, mainly because we haven’t seen any real evidence of it. But episodes like the Flynn story have even the most careful reporters paralyzed. What if, tomorrow, it all turns out to be true? What if reality does turn out to be a massive connect-the-dots image of St. Basil’s Cathedral sitting atop the White House? (This was suddenly legitimate British conspiracist Louise Mensch’s construction in The New York Times last week.) What if all the Glenn Beck-style far-out charts with the circles and arrows somehow all make sense? This is one of the tricks that keeps every good conspiracy theory going. Nobody wants to be the one claiming the emperor has no clothes the day His Highness walks out naked. And this Russia thing has spun out of control into just such an exercise of conspiratorial mass hysteria.

Even I think there should be a legitimate independent investigation – one that, given Trump’s history, might uncover all sorts of things. But almost irrespective of what ends up being uncovered on the Trump side, the public prosecution of this affair has taken on a malevolent life of its own. One way we recognize a mass hysteria movement is that everyone who doesn’t believe is accused of being in on the plot. This has been going on virtually unrestrained in both political and media circles in recent weeks.

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Illustrating what a dud the European Parliament is. They want the man who’s negotiating with Greece to come explain what he does, and he simply refuses. Imagine that in Congress. A Dutch MP said Dijsselbloem is now effectively a ‘persona non grata’ in the European Parliament. And remember: the Eurogroup has no official status, so what can thay do?

Euro MPs ‘Unanimously’ Condemn Dijsselbloem’s No-Show (AFP)

European Parliament lawmakers on Monday “unanimously condemned” the refusal by Eurogroup chief Jeroen Dijsselbloem to appear at a hearing on Greece this week. Dijsselbloem, who is also the Dutch finance minister, has been facing calls to step down since he suggested in an interview in a German newspaper that southern European countries blew their money on “drinks and women”. In the wake of the controversy, the parliament had invited the head of the Eurogroup of eurozone finance ministers to discuss the stalled Greek bailout at this week’s plenary session in Strasbourg. Expectations were that MEP’s would use the opportunity to harshly criticise Dijsselbloem.

“Unanimous condemnation by the European Parliament against Jeroen Dijsselbloem for umpteenth refusal to answer questions on sacrifices made by our citizens,” European Parliament chief Antonio Tajani posted on Twitter. MEP Gianni Pittella, the head of the left-of-centre S&D group, said Dijsselbloem’s refusal to attend was “a further slight after his previous shameful remarks”. “He should resign,” Pittella added. In a letter on Thursday, Dijsselbloem said he was unable to attend the hearing because of a scheduling conflict.

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To repeat: Why are Greek pension costs relatively high? Because “The country hasn’t yet put in place a proper social welfare system”. And it can’t of course, because that would cost money it’s not allowed to spend by Brussels. Let’s see all benefits expenditures for all nations, and then talk again.

Greek Pensions Hot Potato Puts Tsipras in Tight Spot on Bailout (BBG)

Greece is set to miss yet another self-imposed deadline with no accord expected when the Eurogroup meets in Malta on Friday. While there has been “a lot of progress,” there will be no agreement on April 7, Jeroen Dijsselbloem, the group’s chief, said on March 31. “That’s too early.” Europe has become impatient with Greece as the region prepares for Brexit and the threat from emerging populist movements. The failure to reach an accord stems in part from the conflicting political interests of the two sides — Tsipras doesn’t want to face a scheduled general election in 2019 at the same time as pensioners take a cut of as much as 30% in their monthly payments. Creditors worry that if the plan is put in place after 2019, a new government that’s not a signatory of the accord might not implement it.

The IMF, backed by Greece’s euro-area creditors, is pushing Athens to save €1.8 billion, or 1% of GDP, from pension cuts. Greece spends more than 13.3% of its GDP on old-age pensions, the highest proportion in the EU, Eurostat figures show. Greece, which crossed what it once characterized as a red line and accepted the need for pension cuts, is asking creditors to give the country more time to see how measures agreed to last year work before embarking on anything new. The country hasn’t yet put in place a proper social welfare system , making pensions the de facto safety net for many families, supporting several generations. A survey in January showed that 49% of households relied on pensions as a primary source of income.

Further cuts in pensions has become a thorny issue to sell at home as pensioners use their ever-shrinking income to support jobless children at time when youth unemployment stands at more than 40%. Take Panagiotis Papapetrou, for example. The 65-year-old retiree and his wife, who collectively take home a pension of €1,480 a month, support two grown children. “Not only can we not afford any kind of entertainment, but we also have made cuts in our diet,” he said. “We eat less meat and we seek to buy cheap goods.”

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This economy cannot survive. It will keep on shrinking. There is no other possibility as long as there is a Troika. Economies run on consumer spending, and that keeps on falling in Greece. It needs stimulus, not austerity. Europe is creating a powder keg here.

Austerity-Crushed Greek Households Keep Cutting Food Purchases (TNH)

More than seven years into a brutal economic crisis worsened by austerity measures hitting workers, pensioners and the poor, Greek households are continuing to cut food purchases, even for essential items. Repeated salary and pension cuts have left millions unable to keep up, with a survey by the Marketing Laboratory of the Athens University of Economics and Business showing consumers spending almost €40 ($42.72) less a month at supermarkets this year compared to 2016. Average monthly household expenditure came to €274 against €310 a year earlier, with the 13% decline also reflected on supermarket turnover as the sector struggles to lure customers despite sales and 2-for-1 deals.

The study was aimed at average consumers who make up the bulk of supermarket customers drawing a bleak picture of their ability to buy what they want and as more turn away from brand names in favor of cheaper goods. Some 63.4% of Greeks said they buy fewer products and 45.8% buy only the absolute necessities with 54.4% turning to private-label chain products. Data from Nielsen researchers showed that in 2016, some 51% of brand products sold in supermarket were on special offer, up from 33.1% in 2009 and after super markets wouldn’t cut prices despite the crisis, until they were forced to do so by lagging sales. Sales fell another 4% in 2016, driving the cumulative downturn to 18% since 2009, as the crisis began and a year before the then-ruling PASOK Socialists asked for what turned into €326 billion in three bailouts.

The data compiled by Nielsen researchers showed that besides a sharp decline in demand and with more people turning as well to generic brands and looking for offers, that mergers and acquisitions had taken a big bite out of the sector. The phenomenon is likely to continue for several more years with analysts expecting a further drop of 2-3%. In 2016, the sales value of food retailing – including small grocery stores – amounted to about €10.78 billion, down 4.1% from 2015, pushing the sector back to 2005 levels and showing the devastating effect of the crisis and harsh austerity measures that brought big pay cuts, tax hikes, slashed pensions and worker firings. The number of small food retail stores has dropped from about 32,000 in 2005 to 27,000 in 2015 with major chains showing their sales values plummet at the same time with only the discount food chain Lidl showing increases.

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It shows Euro area is not working. Period.

Youth Unemployment Shows Euro-Area Recovery Not Working for All (BBG)

For all the continued momentum in the euro-area recovery, differing prospects for young people across the bloc show the wounds of the debt crisis remain very raw. The unemployment rate for those under age 25 was at 19.4% in February, according to data on Monday. While that’s an improvement compared with a year ago – and is the lowest since 2009 – it’s more than twice the total for the euro-area of 9.5%. In four southern European countries – Greece, Spain, Italy and Cyprus – at least three in 10 young people are still out of work. [..] the unevenness across geography and age groups show how complicated it is for the ECB to set monetary policy for 19 nations.

In Germany, the youth unemployment rate is just 6.6%. That’s lower than the overall rate in Spain has ever been since the euro’s introduction. In Greece, still struggling seven years after its first bailout, the figure in December was almost seven times greater than Germany’s, at 45.2%. Draghi has said that monetary policy can’t take the whole weight of the economic recovery, and repeatedly urged governments to implement reforms to reduce structural unemployment. That’s made harder by the rise of populist parties across Europe, with France and Germany all facing general elections in the coming months.

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Waiting for real craziness over the next 2 weeks.

Erdogan Says Turks In Europe Should Defy ‘Grandchildren Of Nazism’ (R.)

President Tayyip Erdogan on Monday called on Turkish voters in Europe to defy the “grandchildren of Nazism” and back a referendum this month on changing the constitution, comments likely to cause further ire in Europe. Erdogan has repeatedly lashed out at European countries, including Germany and the Netherlands, in campaigning for the referendum, accusing them of “Nazi-like” tactics for banning his ministers from speaking to rallies of Turkish voters abroad. Both the Germans and Dutch have been incensed by the comparisons to Nazism and German Chancellor Angela Merkel has said the references must stop. “With this determination, we will never allow three or four European fascists … from harming this country’s honor and pride,” Erdogan told a packed crowd of flag-waving supporters in the Black Sea city of Rize, where his family comes from.

“I call on my brothers and sisters voting in Europe…give the appropriate answer to those imposing this fascist oppression and the grandchildren of Nazism.” Erdogan is counting on the support of expatriates in Europe, including the 1.4 million Turks eligible to vote in Germany, to pass constitutional changes that would give him sweeping presidential powers. But ties with Europe have deteriorated in the run-up to the campaign. Erdogan last month said Turkey would reevaluate its relationship with the bloc, and may even hold a second referendum on whether to continue accession talks. On Monday, he said he could take the issue of whether Turkey should restore the death penalty to referendum if necessary. “The European Union will not like this. But I don’t care what Hans, George or Helga say, I care what Hasan, Ahmet, Mehmet, Ayse and Fatma say. I care what God says… If necessary, we will take this issue to another referendum as well,” he told the rally.

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“Congress can rein him in with very little effort by saying no money can be spent to deploy US troops to areas where they may encounter hostilities unless a state of war is declared.”

Yes, Let’s Allow The Syrian People To Decide For Themselves (Ron Paul)

Is common sense beginning to creep into US policy in the Middle East? Last week Secretary of State Rex Tillerson said that the longer-term status of Syrian President Assad would be “decided by the Syrian people.” The media reported this as a radical shift in US foreign policy, but isn’t this just stating what should be obvious? What gives any country the right to determine who rules someone else? Washington is currently paralyzed by evidence-free rumors that the Russians somehow influenced our elections, but no one blinks an eye when Washington declares that one or another foreign leader “must go.” It’s only too bad that President Obama hadn’t followed this back in 2011 instead of declaring that Assad had to go and then arming rebel groups who ended up being allies with al-Qaeda.

Imagine how many thousands of lives and billions of dollars would have been saved by following this policy in the first place. Imagine the millions of refugees who could still be in their homes, running their businesses, living their lives. Will the Trump Administration actually follow through on Tillerson’s Syria policy statement? It is too early to tell. The President has illegally sent hundreds of US troops to fight on the ground in Syria. Current US positions in eastern Syria suggest that Washington may be looking to carve out parts of oil-rich areas of the country for some kind of future federation. The White House followed up on Tillerson’s comments by stating that getting rid of Assad was no longer a top priority for the US. This also sounds good. But does this mean that once the current top priority, destroying ISIS, is completed, Washington may return to its active measures to unseat the Syrian president?

Neocons in Washington still insist that the rise of ISIS in Syria was due to President Assad, but in fact ISIS did not appear in Syria until the US began trying to overthrow Assad. They haven’t given up on their desire to overthrow the Syrian government and they do have influence in this Administration. If the Trump Administration is serious about letting the people of Syria decide their fate he needs to take concrete steps. Rather than sending in more troops to fight an ISIS already on its last legs, he must bring US troops home and prohibit the CIA from further destabilizing the country.

It would also be nice if Congress would wake up from its long slumber and start following the Constitution. The President (and his predecessors) have taken this country to war repeatedly without proper Constitutionally-required authority to do so. The president has reportedly decided not to even bother announcing where next he plans to send the troops. Congress can rein him in with very little effort by saying no money can be spent to deploy US troops to areas where they may encounter hostilities unless a state of war is declared.

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Frontex plays a very ugly role here. We saw that coming from miles away.

New Evidence Undermines EU Report Tying Refugee Rescue Group To Smugglers (IC)

Last month, an Italian prosecutor opened an investigation into whether nonprofits working to rescue refugees in the Mediterranean had connections to smuggling operations. “We want to know who is behind all these humanitarian groups that have proliferated in the last few years,” the prosecutor said, and “where all the money they have is coming from.” The implication of the investigation is inflammatory: Why would humanitarian groups want to have anything to do with human traffickers or smugglers? But the idea that nonprofits are directly involved in smuggling people into Europe has swept through conservative media in recent months, fueled by a news report that the EU’s border agency, Frontex, had “accused charities operating in the Mediterranean of colluding with people smugglers.”

The report, which appeared in the Financial Times in December, didn’t name any particular charities, and it quickly started to show holes; within a week, the paper issued a correction and Frontex distanced itself from the accusations. Despite the walk-back, the story stuck, and the Italian prosecutor cited Frontex’s concerns about “collusion with smugglers” in announcing his investigation. The Intercept has obtained a full copy of the Frontex report on which the Financial Times story was based. The report, along with video evidence and interviews with rescue workers who witnessed the incident described in it, further undermines the allegations of collusion. In the report, Frontex does say that people were smuggled to Europe via an NGO ship. But the report provides little evidence for the allegation, and what it does contain is contradicted by the rescue crew.

The confusion shows the fraught conditions of rescue work in the Mediterranean – where smugglers and opportunists do take advantage of refugees and their rescuers, but where the situation is not always so cut and dry. In dire rescues, if a nonprofit accepts help from nearby Libyan boats, they may have no idea who they are working with. “It’s not us that force the people on the boats and cause them to be out there. But once they are out there, we all have to apply maritime law,” said Ruben Neugebauer, who works with the group Sea-Watch. “If there is a boat in distress, we are obliged to help, but also a potential smuggler is also obliged to help.”

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Watching TV. Still far more important than other media. “..television takes up a full 50% of our leisure time..” and “if you live to 75, you will have spent around nine years of your life watching television.”

The Vanishing Art Of Seizing The Day (Krznaric)

Carpe diem – seize the day – is one of the oldest philosophical mottos in Western history. First uttered by the Roman poet Horace over 2,000 years ago, it retains an extraordinary resonance in popular culture. Ask someone to spell out their philosophy of life and there’s a good chance they will say something like “seize the day” or “live as if there’s no tomorrow” – even if they appear to be trapped by routine or paralysed by procrastination. It’s a message found in Hollywood films like Dead Poets Society, in one of the most successful brand campaigns of the last century (“Just Do It”), and in the social media hashtag #yolo (“you only live once”). Almost every language has an equivalent expression for the original Latin phrase. Carpe diem has been a call to arms for everyone from the Jewish sage Hillel the Elder, who in the first century bce asked, “If not now, when?”, to the Rastafarian sage Bob Marley, who sang out: “Wake up and live!”

However, in the course of writing my new book on the vanishing art of seizing the day, I discovered that carpe diem has been hijacked – in part, by the most popular leisure pursuit in the Western world. I loved television as a kid, fitting in an hour before school each day (Thunderbirds, Superheroes) and at least an hour-and-a-half before dinner (5.30: Wheel of Fortune, 6.00: The Goodies, 6.30: Dr Who). What I didn’t realise as a teenager, as I sat on my beanbag in suburban Sydney making the agonising decision whether to break tradition and watch Gilligan’s Island instead of The Goodies, was that I was absorbed in a ritual that ranks as one of the most momentous cultural transformations ever experienced by humankind. Within less than 50 years of the first ever television demonstration in

Selfridges London department store in 1925, around 99 per cent of Western households had a set. Today the typical European or American watches an average of around three hours per day, whether it’s on flat-screen TVs, computers, phones or other devices. This is apart from time spent engaged in digital pursuits such as internet surfing, social media, texting or video games. So television takes up a full 50% of our leisure time, and more time than we spend doing any other single activity apart from work or sleep. Perhaps the best way to grasp how much TV has colonised our lives is to tape the following statistic to your remote control: assuming your viewing habits are somewhere near average, if you live to 75, you will have spent around nine years of your life watching television.

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